According to data collected by the Australian Bureau of Statistics from July 1987 to December 2007, explorers are spending substantially more money and getting fewer bang for their buck in the current resources boom.
Organised by the Australian Institute of Geoscientists (AIG) the Drilling for Geology conference was held in Brisbane this week.
The conference saw geological and drilling experts brief the industry on topics including drilling techniques, monitoring measurements, drilling innovations and drilling patterns.
A mining consultant and the chairman of the AIG Queensland branch, Berry gave delegates an insight into 20 years of drilling data collected by the ABS for the minerals industry.
He compared data from the resources boom in the 1990s with the current boom which he said showed a cyclical nature of exploration and drilling expenditure.
Metres drilled in the ’90s boom period peaked in 1997 with an annualised rate of nearly 15 million metres drilled.
Despite boom times again Berry pointed out that current drilling rates in the industry had yet to reach drilling rates seen in the ’90s.
Last year around 10 million metres was drilled, less than the 1997 peak, however costs have increased.
“During the mid-1990s boom exploration expenditure peaked at nearly $A350 million per quarter equating to $1.4 billion per annum,” Berry said.
“Despite the fact that during the current boom period the quarterly drilling metreage has not approached the rates of the mid 1990s, exploration expenditure has increased substantially, rising to $625 million in the December 2007 quarter and equating to $2.5 billion per annum.”
Berry said the total exploration cost per metre for drilling on new areas and production leases and existing deposits had risen sharply from mid-2005 to the present day.
During the two bust periods in recent resource history in the early 1990s and 2000s, drilling bottomed out to an average of about 1.5 million metres a quarter or 5.5-6.5 million metres a year.
The slowdown in the early 2000s saw the average cost per metre fall to the same level as in the 1990s.
Berry said at the end of 2007 total exploration costs per metre for drilling in existing deposits had reached $238/m whereas the costs for new deposits overtook the costs for existing deposits.
When Berry looked at drilling expenditure by commodities across the 20 years, the statistics found the primary driver for the 1990s boom was gold, which peaked at $226 million in June 1997.
The current boom has included expenditure on a broader range of commodities focusing on base metals, with iron ore and coal showing significant growth.
At the end of the 2007 base metals exploration made up 33% of total expenditure, with gold at 23%, iron ore at 16%, uranium at 11% and coal making up 10%.
