Exploration and supply-demand
trends and forecasts

Ronnie Cecil, Principal Analyst
Paul Manalo, Research Analyst
Eillen Grace Dela Cruz, Senior Specialist
Metals & Mining Research
S&P Global Commodity Insights
Nov. 29, 2023

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Comprehensive end-to-end intelligence on the mining sector
10,000+15

35,000+public and private mining
companies, including
3,700+ publicly listed

news articles publishedin the past 12 months

commodity cost curves
across precious metals,
base metals and bulks

mining properties and6,000+ operating mines

3,000+

30+

70,000+2,300+

drillholes documented
in 2022 from 1,820
active projects

capital offerings
completed by mining
companies in 2022

98,000+companies surveyed orcollated in 2023 for their
exploration budgets

years of exploration budget
data, the most extensive
dataset in the industry

Benchmark Exploration Data / Commodity Price Forecasts / M&A and Finance / Reported Production and Financials
Mining Industry Database | Mining News and Research

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2

Agenda1 Global exploration trends: targets, geography, stage of development
2 Industry Monitor: financing, drilling, Pipeline Activity Index
3 Supply-demand price forecasts

Speakers

Ronnie Cecil
Principal Analyst
S&P Global Commodity Insights

Paul Manalo
Research Analyst
S&P Global Commodity Insights

Eillen Grace Dela Cruz
Senior Specialist
S&P Global Commodity Insights

Ruilin Wang
Senior Analyst
S&P Global Commodity Insights

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4World exploration trends, 1997–2023

Number of companies with budgets

Aggregate nonferrous exploration budget(US$B)

Macroeconomic and geopolitical headwinds weigh down on exploration activity in 2023

Data as of Oct. 24, 2023.
Source: S&P Global Market Intelligence.

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5Exploration budget by commodity target
Gold budget falls to 3-year low; copper, nickel, and lithium increase for third straight year

budget

2023
2022
2010

Data as of Oct. 24, 2023.
Base metals = copper, nickel, zinc-lead; Battery metals = lithium, cobalt; REE = rare earth elements; Others = diamonds, molybdenum, potash, graphite, vanadium etc.
Source: S&P Global Market Intelligence.
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Not for distribution to the public. Copyright © 2023 by S&P Global Commodity Insights. All rights reserved

6Exploration budget by commodity target
Gold weighs down total; base and battery metals cushion the dip↑↑↑
Data as of Oct. 24, 2023.
.
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7Exploration budget by geography
Australia, Canada drag global exploration

Budget change YOY ($M)

Latin America remains favored region for exploration

changeData as of Oct. 9, 2023.
Source: S&P Global Market Intelligence.
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8Exploration budget by company type
Majors' budget highest in a decade; other types fall YOY

Juniors' share dips for the first time in 5 years

Major

Intermediate

JuniorGovernment/Other

100
1.2%

90

Exploration budget ($M)

Share of global budget (%)

-4.5%

-8.0%

Intermediate

70
60
50
40
30
20
10

-15.5%
Major

80

Junior0

Government/Other

Data as of Oct. 9, 2023.
Source: S&P Global Market Intelligence.
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9Exploration budget by stage of development
Share of early-stage falls drops to record-low

Grassroots

Late-stageLate-stage exploration bucks the trend

Minesite

100
90
3.8%

Share of global budget (%)

80

-3.7%

70
60
50

-9.8%

40
30
20
10
0
Grassroots

Late-stage

Minesite

Data as of Oct. 24, 2023.
Source: S&P Global Market Intelligence.
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10

29

Cu
CopperCopper exploration budget ($M)

Exploration in focus: copper

63.546

Budget ($M)

Data as of Oct. 9, 2023.
Source: S&P Global Market Intelligence.
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11

3

Li
Lithium

Lithium exploration budget ($M)

Exploration in focus: lithium

6.94

Budget ($M)

Data as of Oct. 9, 2023.
Source: S&P Global Market Intelligence.
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12

28

Ni
NickelNickel exploration budget ($M)

Exploration in focus: nickel

58.693

Budget ($M)

Data as of Oct. 24, 2023.
Source: S&P Global Market Intelligence.
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Not for distribution to the public. Copyright © 2023 by S&P Global Commodity Insights. All rights reserved

13Market health view on exploration sector, 2019–23
Pipeline Activity Index falls to lowest since late-2020
Aggregate market capitalization

Exploration Price Index (EPI)

Pipeline Activity Index (PAI)

200

3,000

2,500

160

Indexes (May 2008 =100)

140

2,000

120
100

1,500

80
1,000

60
40

500

Aggregate market capitalization ($B)

180

20
0

0
2019

2020

2021

2022

2023

Data as of Oct. 11, 2023.
Source: S&P Global Market Intelligence.

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14

Junior and intermediate financings, 2018–23

Amount raised ($M)

Tighter capital markets pull down fundraisings of juniors and intermediates↑
Data as of Oct. 9, 2023.
Source: S&P Global Market Intelligence.

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Not for distribution to the public. Copyright © 2023 by S&P Global Commodity Insights. All rights reserved

15Drilling overview, 2021–23

Number of reported drillholes

Number of distinct projets drilled/
Exploration Price Index

Year-to-date drilling lower year over year from gold activity slowdown↑

Data as of Oct. 17, 2023.
Source: S&P Global Market Intelligence.

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Not for distribution to the public. Copyright © 2023 by S&P Global Commodity Insights. All rights reserved

16Aggregate nonferrous exploration budget ($B)

World exploration 2024 outlook

Data as of Oct. 9, 2023.
Source: S&P Global Market Intelligence.

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Not for distribution to the public. Copyright © 2023 by S&P Global Commodity Insights. All rights reserved17Supply-demand price forecasts

S&P Global Commodity Insights

18

Industrial metals prices pressured by weaking global economy,strong US dollar. Gold surges on Middle East conflict.
Bearish macroeconomic outlook weighs on
industrial metals prices
240

Iron ore

CopperNickelGeopolitical tensions boost gold prices as US dollar
stays strong

Zinc

130
Price, exchange rate indexes(Jan. 4, 2022 = 100)

Price index (Jan. 4, 2022 = 100)

220
200
180
160
140
120
100

Gold price

Trade-weighted index of US$

Copper price

120
110
100
90
80

80
70
60
40
01/22

04/22

07/22

10/22

01/23

04/23

07/23

10/23

60
01/22

04/22

07/22

10/22

01/23

04/23

07/23

10/23

As of Nov. 3, 2023.
Gold price is Refinitiv spot contributor XAU. Trade-weighted US dollar index (DXY) is Refinitiv spot contributor.
Sources: S&P Global Platts; London Metal Exchange.

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Copyright © 2023 S&P Global Market Intelligence Inc. All rights reserved.

19

China economy flashes mixed signals; manufacturing activity ofmajor economies falters
China manufacturing recovery wanes, as PMI's fallin October

S&P Global Ratings forecasts global GDP growth toslow to 2.8% in 2024
Previous 2023

China (NBS)

China (Caixin)

EurozoneJapan

US (ISM)

Revised 2023

6
5.2

60

4.8

5
Change YOY (%)

55
Index

Revised 2024

50

4.4

4
2.9

3
2

1.8
1.3

1

01/22

04/22

07/22

10/22

01/23

04/23

07/23

10/23

2.8

2.3
1.8

45

40

3.1

0.6 0.6

1.2

0.9

1.0

0
US

Eurozone

China

Japan

World

As of Nov. 3, 2023.
GDP = gross domestic product; PMI = purchasing manager’s index; NBS = National Bureau of Statistics of China; ISM = Institute for Supply Management ; YOY = year over year.
Sources: S&P Global Market Intelligence; S&P Global Ratings; S&P Global; Institute for Supply Management; National Bureau of Statistics (China).

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20

Near-term surpluses in the copper market give way
to long-term deficits
LME 3M copper price forecast softens to $8,421/t
in 2024
LME 3M
10,000

300

9,700
9,400

100
9,100
0
8,800
-100
8,500

-200

8,200

-300
-400

7,900
2021

2022

2023f

2024f

2025f

2026f

2027f

OperatingCommitted

2014

2018

Probable

Possible

Demand30

Price ($/t)

Balance (000 t)

200

63.546

Concentrate market to be in 2.2-MMt deficit in 2032

Copper in concentrate (MMt)

Refined balance
400

29

Cu
Copper

25

20

15

10

5

0
2012

2016

2020

2022

2024f

2026f 2028f 2030f 2032f

As of Oct. 18, 2023.
MMt = million metric tons; f = forecast.
Sources: S&P Global Market Intelligence; London Metal Exchange.

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21

PEV sales set for another record year, though below
expectation. Greenfield projects boost Li supply in 2023.

China sales

Europe Top-4 sales

US salesEurope Top-4 penetration rate

China penetration rate

US penetration rate

27

Co
Cobalt

6.94

58.93

Rising lithium supply from Africa, Argentina andNorth America; supply growth slowing from 2024
Australia

Chile

China

Argentina

North America

AfricaBrazilOther

YOY change

1,000

50
800

40

600

30

400

20

200

10

0

0
04/21

08/21

12/21

04/22

08/22

12/22

04/23

As of Oct. 16, 2023.
PEV = plug-in electric vehicle; MOM = month over month; YOY = year over year; YTD = year to date.
Europe Top-4 comprises Germany, France, UK and Norway.
* Europe includes sales from the EU, UK and Norway.
Source: Automotive industry associations.

08/23

Lithium raw material supply(000 t LCE)

60

2,400

45

2,100

40

1,800

35
30

1,500

25

1,200

20

900

15

600

10

300

5

0

YOY change in global supply (%)

70

1,200

Penetration rate (%)

Passenger PEV sales (000 units)

PEV sales across top markets up 3.8% MOM in
September, though yet to surpass Dec. 2022 peak3

Li
Lithium

0
2021

2022

2023

2024

2025

2026

2027

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22

Li-Co prices rangebound on surpluses until mid-decade,but high enough to incentivize supply development.

Balance

60,0002930
20

50,00015

13

40,00012

1030,0000

20,000-10

10,000

-11

-10

-20

0
2021

2022

2023

2024

2025

2026

2027

Cobalt balance (000 t)

70,00040

58.93

European cobalt metal price20

Lithium price ($/t)

50
Lithium balance(000 t LCE)

Balance

80,00054

6.94

Cobalt market is well-supplied up to 2025

Lithium carbonate CIF North Asia price

60

27

Co
Cobalt

35
10

10

8

30

0.4

0

-10

12

25

20

-8
-12

-20

Cobalt price ($/lb)

Solid pipeline sustains lithium market surplus to 2026

3

Li
Lithium

15
-25

-30
2021

2022

2023

2024

2025

2026

10

2027

As of Oct. 16, 2023.
LCE = lithium carbonate equivalent.
Sources: S&P Global Market Intelligence; S&P Global Commodity Insights.

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23

28

Global primary nickel production to increase over forecasthorizon as Indonesian output expands
Indonesia to dominate future global primary nickel
outputChina

Indonesia

CanadaJapan

RussiaAustralia

Ni
Nickel58.693Global primary nickel market surplus to expand in
2024

ROW

Primary nickel balanceLME 3M nickel price

80
70
60
50
40
30
20

300

30,000200

25,000100

20,0000

15,000-100

10,000

-200

5,000

LME 3M price ($/t)

90

Primary balance (000 t Ni)

Share of global primary nickel production (%)

100

10
-300

0
2017

0
2017

2019

2021

2023f

2025f

2019

2021

2023f

2025f

2027f

2027f

As of Oct. 27, 2023.
LME 3M = London Metal Exchange three-month; $/t = dollars per metric ton; f = forecast.
Sources: S&P Global Market Intelligence; London Metal Exchange.

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2023 S&P Global Market Intelligence Inc. All rights reserved.

24

Slowing economy pushes zinc market into surplus, despiteongoing supply constraints
Global refined zinc production growth to be driven
by Asia
China
India
Oceania
RoW

30

Zn
Zinc
65.38

Zinc price to soften to $2,689/t in 2023

Americas
EuropeAsia Ex. China and India

Refined zinc production (MMt)

16

12

8

4

0
2022

2023

2024

2025

2026

2027

Data as of Oct. 3, 2023.
MMt = million metric tons; 3M = three-month; $/t = dollars per metric ton.
Sources: S&P Global Market Intelligence; London Metal Exchange.

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25

China iron ore import resurgence supports prices in 2023
China iron ore imports rise 59.0 MMt YOY in
January-October 2023
Iron ore imports

Iron ore price forecast to average $116.88/dmt
in 2023 on China import resurgence
Global seaborne trade balance

Change YOY

62% Fe iron ore price
30

180

10
80

5

60

0
-5

40

Global balance (MMt)

15

100

160

20

140

10

120
100

0

80

-10

60

-10
20

-15

0

-20
01/22

04/22

07/22

10/22

01/23

04/23

07/23

10/23

Price ($/dmt CFR)

20

Change YOY (%)

China imports (MMt)

120

40

-20

20

-30

0
2015

2017

2019

2021

2023f

2025f

2027f

As of Nov. 7, 2023.
dmt = dry metric ton; MMt = million metric tons; YOY = year over year; f = forecast.
Sources: S&P Global Market Intelligence; S&P Global Platts; S&P Global MI Global Trade Analytics Suite.

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26

Gold rebounds, testing the $2,000/oz mark as impacts of dollar,
real yield strength are overshadowed by Israel-Hamas conflictGold prices dive to $1,818/oz early October, as
Treasury yields rally on strong US jobs data
Gold priceGold prices upgraded in Q4 amid rising geopoliticaltensions

US 10-year real yields
LBMA gold price

2,100

2.4

2,050

2,050
1,950

2,000
1,950

1.8
1.6

1,900

1.4
1,850

1.2

Yield (%)

2

Gold price ($/oz)

2.2Gold price ($/oz)

SPGMI gold price forecast

2.6

1,850
1,750
1,650
1,550
1,450
1,350
1,250
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1 Q2Q3Q4Q1Q2Q3Q4

1,800
01/23

1
04/23

07/23

10/23

2019

2020

2021

2022

2023
'24 '25 '26 '27

As of Oct. 26, 2023.
TWI = trade-weighted index.
Sources: S&P Global Market Intelligence; London Bullion Market Association; US Treasury Department; Refinitiv.

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27

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28