Global Grassroots Exploration Slumps by 8% in 2024, Now at Record-Low 22% of Budgets
Global mining companies have slashed spending on grassroots exploration to a historic low. The share of global budgets allocated to early-stage exploration, primarily for nonferrous metals, dropped by 8% in 2024, bringing the total to just 22%, or $2.79 billion, Mining Zimbabwe reports.
By Rudairo Mapuranga
According to S&P Global’s latest report, the sharp decline signals a major strategic shift as companies increasingly prioritize expanding known deposits over pursuing new discoveries.
In contrast, the late 1990s to early 2000s were characterized by a robust focus on uncovering new mineral resources. Between 1997 and 2004, nearly 50% of exploration budgets were allocated to grassroots initiatives. However, over the last two decades, exploration firms have steadily reduced their early-stage spending, choosing instead to allocate more funds to late-stage and mine site exploration.
Cesar Pastrana, data analyst at S&P and the report’s lead author, highlighted the negative impact of this trend on the pace of new discoveries.
“The number of new finds, particularly for key metals like copper and gold, has been declining consistently. The amount of contained metal within these discoveries has also dropped significantly over the years,” Pastrana said.
This slowdown in early-stage exploration has raised concerns about the future availability of critical resources. Copper and gold, essential for industries ranging from electronics to energy, are particularly affected by the reduced exploration focus.
Factors Behind the Shift
Several factors have contributed to this shift in priorities. Following a sharp decline in metal prices after 2012, mining companies adopted a more cautious, risk-averse approach to their investments. The reduced focus on grassroots exploration reflects a broader industry trend of limiting financial risk by extending known mineral deposits rather than pursuing high-risk, high-reward new discoveries.
“This reallocation of budgets allows companies to boost their resources from existing projects, but it limits the potential for uncovering new large-scale deposits. We are seeing more reserves come from older mines, which isn’t a sustainable strategy in the long term,” Pastrana said.
According to the S&P report, late-stage exploration experienced the largest budget cuts in 2024, with spending dropping to $4.71 billion. This represents a marked decline from recent years, breaking a three-year trend of increasing investment in late-stage projects. Late-stage exploration now accounts for 38% of the global budget, the second-largest category after mine site exploration.
Meanwhile, mine site exploration—the least risky of the three stages—saw modest growth, rising by 2% in 2024. This stage, which focuses on extending existing operations, has emerged as the most attractive option for many companies operating in a tight capital environment, particularly those focused on gold and copper projects.
Regional Trends
A significant portion of the decline in grassroots exploration spending has been driven by Australia, a leading global mining hub. According to S&P, the country’s allocation toward grassroots gold and copper projects fell sharply by 32% and 25%, respectively, in 2024. Rio Tinto, Australia’s largest grassroots explorer, slashed its spending in the region by 57%, signalling a major pivot in strategy.
Australia’s cutbacks were mirrored in Latin America, where countries like Ecuador, Mexico, and Chile each reduced their grassroots exploration budgets by over $20 million.
The Future of Exploration
S&P Global’s report highlights the risks of this trend for the long-term sustainability of mineral resources. Pastrana emphasized that while focusing on known deposits can temporarily boost reserves, it ultimately limits the industry’s ability to discover new resources, raising concerns about the supply of critical minerals in the future.
“The industry’s cautious approach, shaped by volatile metal prices and constrained financing, is causing companies to play it safe,” Pastrana said. “This could jeopardize the long-term availability of key metals, making it harder to meet future demand.”
As the global mining landscape continues to evolve, the challenge will be balancing financial risk with the need for new discoveries. For companies and investors, navigating this dynamic environment will be critical to ensuring resource sustainability in the years to come.