Exploration report: Drill rig operators kept economy turning in 2023

Mineral exploration expenditure for Australian deposits fell 3.1% in the past quarter, however exploration spending was a record high in 2023 reaching $1.093 billion. 

The Australian Bureau of Statistics (ABS) released its latest Mineral and Petroleum Exploration December 2023 quarterly report, which reveals mineral exploration spending increased by 0.9% year-on-year despite a drop in the December quarter. 

Yesterday (5 March 2024), the ABS also reported Australia has had a strong trade performance as the country’s current account balance increased by $10.5 billion to an $11.8 billion surplus for Q3 2023.

This bolstered balance and surplus indicates exports exceed imports and that investment has again been flowing out of Australia. A large reason for this is of course the resources sector.

ABS head of International Statistics Grace Kim says: “The current account surplus reflected a higher trade surplus, driven by mining commodity exports.”

diamonds in the rough

Minerals including mineral sands, uranium, and diamonds recorded the ‘largest’ increase up to 2.9% to $216.1 million, while iron ore recorded the ‘largest’ fall of 13.2% to $170.6 million.

The ABS reports coal was another mineral that saw exploration spending rise for the December 2023 quarter, to $90.9 million compared to $86.6 million in the September 2023 quarter. 

Kim says that the prices of goods exports increased for the first time in 2023, up 3.5%, which was led by coal and metal ores prices. 

“Despite the rise, the price of exported goods was 8.6% lower compared to this time last year.”

Although the demand for commodities such as nickel, cobalt, and copper is growing, as these are considered a key input for batteries and renewable energy, the commodities exploration expenditure has fallen. 

For the December quarter, ABS reports base metals spending such as copper, silver, lead, zinc, nickel and cobalt fell to $284.5 million in comparison to $295.5 million in September 2023. 

This news comes following the Minerals Council of Australia’s Chief Executive Officer (CEO) Tania Constable discussing Australia’s lithium and nickel operations being threatened as an opportunity to become a powerhouse is not being seized. 

“In contrast to bulk commodities like iron ore and coal, mines for battery and magnet minerals and metals are smaller operations, have different cost profiles and require access to common infrastructure.

It is crucial that work ramps up on the delivery of multi-used infrastructure facilities, to help unlock deposits that lack even the most basic infrastructure.”

Deposit mineral exploration expenditure dropped across the board to $1.124 billion in contrast to the September 2023 quarter which recorded $1.159.9 billion, the ABS reports. 

For existing deposits, the exploration expenditure fell 2.5% to $770.3 million, while new deposits fell 4.4% to $353.8 million. 

Fueling growth

As there is now an evident shift in the mineral exploration expenditure, there is also a shift in the petroleum exploration spending. The petroleum industry is necessary in the current world in maintaining industrialisation, fueling, and transportation. 

Yet, the petroleum exploration expenditure in Australia has fallen, as the ABS reported exploration spending for petroleum fell significantly by 19.8%. 

According to ABS, petroleum exploration spending for December 2023 recorded $258.1 million, while it is trending at $285.4 million. The total expenditure for seasonally adjusted fell 19.8% in comparison to the September 2023 quarter, while the trend actually had risen 2.5%. 

During the September 2023 quarter, petroleum exploration expenditure peaked at $322 million, which is the highest recorded since December 2019 at $362.9 million. 

“The challenge now is identifying the necessary changes to seize this monumental opportunity and ensure Western Australia, and indeed the entire nation, remains at the forefront of the global mining industry in the transition to a net zero future

The fall of petroleum exploration spending comes as no surprise, as the Western Australian government’s Department of Energy, Mines, Industry Regulation and Safety reported that the petroleum exploration expenditure was valued at $352 million in 2022-2023, which is the lowest financial year spend in the last 25 years. 

IBIS World reports that petroleum explorers offer onshore and offshore drilling and exploration services, while oil and gas producers use these services to initiate a portfolio of future/upcoming projects.

Onshore exploration and drilling is land based, while offshore occurs where basins of oil and natural gas are discovered under the ocean floor. Onshore spending has fallen 1.7% to $174.3 million, compared to the September 2023 quarter which recorded $177.4 million. 

However, the onshore expenditure trend rose 4.4% to $176.9 million, which is the highest trend since December 2021. 

Meanwhile, offshore expenditure fell 42.1% seasonally to $83.8 million, in contrast to $144.7 million during the September 2023 quarter. The trend fall of offshore expenditure only fell 0.6% to $108.3 million. 

While Petroleum exploration spending fell, mineral exploration spending rose by a total of 0.9%. 

Although there are some highs, there are a lot of lows within the mining sector’s exploration expenditure for December 2023. 

Tania Constable says: “The urgency is palpable; we do not have decades, perhaps not even years, to correct our course. 

The challenge now is identifying the necessary changes to seize this monumental opportunity and ensure Western Australia, and indeed the entire nation, remains at the forefront of the global mining industry in the transition to a net zero future.”

Write to Aaliyah Rogan at Mining.com.au   

Images: Firefinch & Aurora Energy
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Written By Aaliyah Rogan
Relocated from the East Coast in New Zealand to Queensland Australia, Aaliyah is a fervent journalist who has a passion for storytelling. When Aaliyah isn’t writing stories, she is either spending time with friends and family or down at the beach.