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Higher metal prices to push exploration budgets up in 2022, says S&P Global

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S&P Global Market Intelligence’s pipeline activity index points to mineral exploration budgets increasing by 5% to 10% in 2022, metals and mining analyst William Mason told a recent online conference.

The increase is not as significant as in previous years, as a projected moderate softening of most metal prices from current levels weigh on the outlook.

Exploration budgets generally move with metal prices, often with a one-year lag.

“From 2023 to 2025, we expect budgets to pull back slightly as the Covid-19 pandemic economic recovery subsides and global economic growth returns to a more moderate pace,” Mason said during S&P’s recent State of the Market: Mining Q2-21 webinar.

The pipeline activity index levelled off in the second quarter as gains in significant drill results and positive project milestones were offset by a decrease in substantial financings, with the number of initial resource announcements unchanged.

According to Mason, exploration budgets generally move with metal prices, often with a one-year lag.

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