01 May Mining exploration budgets to suffer amid coronavirus crisis: S&P report
The COVID-19 (coronavirus) crisis is expected to push global exploration budgets 29% lower in 2020, according to the findings of a report conducted by S&P Global Market Intelligence.
As several mining jurisdictions remain in full or partial economic lockdowns for the near future, the junior exploration sector will be the hardest hit, with allocations forecast to decrease by 42% this year.
S&P also expects to see budgets of producing companies fall by 23% as they face up to lower metals prices and country-wide closures in areas in which they operate. As a result, the analytical company anticipates that global exploration budgets will fall to US$6.9 billion this year.
“We currently see more downside potential for exploration budgets than upside. The continuing pandemic and the uncertainty around the timing at which it will begin to subside or come under control via a vaccine are both contributing to downside risk,” the report read.
S&P expects copper exploration budgets to take the biggest hit in 2020, decreasing around 40% and more than erasing the gains the metal made in 2019, while explorers listed on the Canadian and Australian markets will see a total of $1 billion wiped from their budgets.
However, the report suggested that exploration budgets could ‘rebound modestly’ in 2021, assuming that global economic conditions improve in the second half of 2020.