Australia metals exploration spend tipped to bounce back this year

• Oz expected to see very strong exploration budget growth, even as global metals exploration spend drops despite demand.
• Major concerns that underinvestment could lead to future supply constraints.
• World grassroots exploration has fallen to 21%; record low.

Australia is expected to see very strong mining exploration budget growth through this calendar year, after activity increased significantly in the second half of CY25, according to a report shared by S&P Global recently.

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The S&P Global World Exploration Trends 2026 report has found that Australia has retained the second-largest budget among countries, even though it decreased six percent to US$1.86 billion in CY25.

Australia’s CY25 outlay was hit by budget reductions from junior listed companies, which cut their spending by 20%, or US$201 million.

While some of the decline may be attributed to limited access to capital, Australia may have also been somewhat underrepresented in the CY25 budgets due to program timing, with many running from July CY24 to June CY25.

Western Australia accounted for the largest share of Australia’s budget, but its US$146 million reduction offset increases seen in Queensland and Victoria.

Late-stage exploration and grassroots declined significantly, while the minesite budget increased.

S&P reported that the CY25 allocation highlighted the continued strategic pivot toward development stages, sustaining production and optimising existing assets.

Gold and copper exploration budgets increased 19% and 2%, respectively. Conversely, lithium exploration experienced a notable 57% decrease.

Meanwhile, global exploration budgets declined for a third consecutive year, slowing down to US$12.40 billion, even as demand for gold, copper, lithium, and critical minerals continued to grow quickly.

Precious metal gold was the one bright light and largely led exploration spending, with budgets up 11% to US$6.15B, driven by record prices.

However, according to the report, spending on the precious metal was increasingly focused on existing mines. Glaringly, spending on grassroots exploration dived to a record low of 21%, which S&P said highlighted a shrinking pipeline of new discoveries. “With an average of 16 years from discovery to production, today’s underinvestment could become tomorrow’s supply constraint,” S&P noted.

“With underwhelming global GDP and consumption growth, companies dependent on the marketplace continued to have difficulty accessing cash for pure exploration… although the market showed considerable interest in funding mines.

“Alongside a persistent oversupply of some commodities – notably lithium, nickel and zinc – these issues led global exploration budgets to decline for a third consecutive year, falling 1% to US$12.40 billion.”

In CY25, fundraising by juniors and intermediates more than doubled compared to the same period in CY24, with funds raised in the second half of the year twice as high as in the first half, reflecting growing bullishness.

Most metals, led by gold, silver, copper, and rare earths, saw a rebound in financing. Even lithium and nickel posted higher funds raised, despite recent price pressures.

While the downward trend has reversed after years of decline, fundraisings for copper, lithium, and nickel levels remained below those of CY21, with only gold and silver showing significant improvement compared to that year.

“It should also be noted that a large amount of the funds raised is going to the development of mines, in particular gold mines,” the report noted.

S&P said geopolitics remains a major and growing uncertainty heading into CY26.

Looking ahead, copper, silver and gold are expected to buoy global exploration budgets, supported by elevated prices forecast to persist in the medium term.

“Budget expenditure for nickel and lithium may plateau or recover slightly as prices begin to recover and market surpluses start to slim down,” S&P noted.

“At least, some commodities, [like] nickel and zinc, have only limited capacity to decrease. However, battery metal material selection is evolving rapidly, which could determine whether those metals recover or decline further.”

Overall, S&P expects exploration activity to pick up in CY26, with precious metal budgets increasing globally throughout the remainder of the year.

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