S&P Global Market, a market intelligence and analysis corporation, forecast late last year that the 2021 global non-ferrous metals exploration budget will increase by 20% and would bring it to US$10 billion, surpassing even the 2019 level when US$9.28 billion was recorded.

S&P global had estimated a 10% year-on-year drop to US$8.32 billion in 2020 compared to a year earlier in the global exploration budget.

Even if the COVID-19 pandemic virtually dampened optimism in the global exploration sector, which began to appear in the second half of 20219, fortunately, the mining industry recovered quickly from the initial impact.

Therefore, the rebound is explained by a recovery in drilling activity since June, by the sustained rebound in metal prices, particularly copper and gold (the two most important targets for exploration), and financings returned to pre-pandemic levels.

On site, mining was declared an essential industry in most countries, so closures were relatively brief. All of these factors contributed to the decrease in the 2020 exploration budget being much less pronounced than anticipated at the end of 1Q 2020 (-29%).

COVID-19-related travel restrictions made it difficult to plan large-scale greenfield projects, resulting in overall budget reductions of 11% at major mining companies and 8% at junior companies.

That said, S&P believes that major mining companies have done most of the exploration over the past 10 years, and that scenario will continue, as junior activity will depend on market support.

According to S&P, exploration budgets for gold increased by 1% (US$ 51 million), while those for copper and zinc were the most affected with falls of 24% (US$ 561 million) and 21% (US$ 116 million), respectively.