One-Third of Exploration Companies May Fail
“Survey responses indicate this year that the mining sector expects dramatically decreased investment and exploration along with a large number of companies either reducing activity or going out of business all together,” said Fred McMahon, coordinator of the survey and the institute’s director of trade and globalization studies.
The survey found that more than four out of five mining executives believe that at least 30% of exploration companies will be forced out of business in the current economic downturn. Of that total, two out of five respondents believe 30% of the world’s exploration companies will be forced out of business, with another two out of five stating that 50% or more of exploration companies will be forced out of business.
More than 90% of respondents believe the exploration and development activities of exploration companies will be curtailed, with 57% saying the activity will decline “a great deal.” Nearly 85% of respondents say that the activities of production companies will be curtailed, though only 31% believe that the activity of production companies will decline significantly.
The survey, according to the institute, represents the opinions of 658 mining executives and managers worldwide on the policy and mineral endowment of 71 jurisdictions on all continents except Antarctica. Companies participating in the survey reported exploration spending of $3.4 billion in 2008 and of $3.02 billion in 2007. The complete survey is available at www.fraseramerica.org.