Australian mining boom sees explorers spend close to $1 billion in Q4

Resources companies in Australia spent a record AUS$964 million on exploration in the fourth quarter of 2021, according to latest research which is encouraging analysts to liken the current conditions to those seen during the mining boom of 2010.

Total capital raising also broke a record in the quarter, increasing more than 70% to $3.17 billion compared to 2020. The figures come from analysis of cashflow reports of 733 resource companies by independent research agency Austex.

Warren Pearce, chief executive of the Association of Mining and Exploration Companies (AMEC), said people had a fear of using the word ‘boom’. But he said it was a fitting description of the current environment, with the industry experiencing a sustained period of substantial growth.

“We’re going through a period that’s been as good as we’ve seen probably in 20 or 30 years,” Pearce said. “We’re at the sort of numbers that were at the height of the last mining boom back in 2010-12.”

Despite global supply chain issues brought about by the pandemic, Pearce said that both the exploration and production sectors have done exceptionally well in the circumstances. “In terms of capital raising, we really haven’t seen much like this before,” he added.

Australia’s resources industry has significantly diversified since the last iron ore-driven boom. The country aims to build a world-leading green hydrogen sector, while resources firms are moving to develop copper, lithium, nickel and rare earth deposits, amongst other minerals.