A deglobalised world has presented new challenges and opportunities for explorers
As we were putting this project to bed, US President Donald Trump was settling into his chair in the Oval Office, upending global relationships that most would have already described as disrupted.
This was largely being affected through tariffs on neighbouring Mexico and Canada, but also heavy levies on goods from China.
Until then, the ongoing issue of supply-chain security – a combination of retreating globalisation and disruptions created by COVID and the Ukraine war – had been defined cleanly into east and west.
The world’s largest economies – the US and China – had been busy friend-shoring their raw material partners. The Inflation Reduction Act was born. China attempted to redouble its overseas upstream investments, albeit while battling its own struggling economy and criticism over its Belt-and-Road ‘debt-trap diplomacy’.
Meanwhile, the European Union commissioned more reports. The rest of the world scrambled to align themselves with the new order.
It is this phenomenon that resulted in so-called ‘critical minerals’ lists growing to the point it was easier to define what was not on those lists, rather than what was on them. As it stands, the industry remains without a clear definition of what constitutes a critical mineral in the context of a rapidly changing technological and energy landscape, and therefore lacks guidance on where additional exploration efforts should be focused.
But now, the most natural partners for the US have been targeted by Trump’s America-first policy, fragmenting supply chains further.
Assuming supply chains fragment further and many other countries take a more protectionist outlook, this is likely to add a new layer of complexity on an exploration landscape that has long-been multifaceted. It requires explorers as an industry sub-sector to revisit how they prioritise efforts and the tools needed for success.
In a world where some resource focussed economies provide raw materials for a diverse range of downstream sectors globally (think Australia, Chile, or the DRC) are increasingly aligned to politically defined supply chain partners, the need to secure additional and/or alternate supply is paramount.
It poses a question for the exploration community: Is more aggressive exploration in more jurisdictions needed to provide supply options resilient to political shifts?
This presents opportunities and challenges. Some of these were already in play, some of them are new.
Frontier or friendly
As discovery rates have declined over the past 20 years, a debate has raged between difficult geologies and difficult jurisdictions. That is, are exploration efforts better spent in safe-haven jurisdictions where exploration has picked out the easy finds and so discovery is harder; or in politically challenging jurisdictions where the geology offers more easy wins, but social and political circumstances mean it is harder to commercialise exploration success.
The expanded demand on metals from the energy transition and, to a lesser extent, AI, combined with the need to diversify supply chains suggests the industry needs to do both. At a time when the sector is struggling to make the discoveries needed to feed previous demand scenarios, this challenge appears immense.
On the upside, support for exploration is growing, creating opportunity. This support is both political and technological.
Politically, governments are finding money to fund natural resources where this has typically been left to the private sector. This is particularly true in western supply routes.
The Inflation Reduction Act in the US was the shining example of indirect capital for natural resources, but it has been followed by critical minerals initiatives in developed and developing economies the world over.
Though long-needed refurbishments to permitting structures have been slow to catch up, pressure to shepherd best-in-class projects into production grows as awareness of coming metals deficits increases and supply chain uncertainties.
State investment along eastern supply chains drivers was already well established but China’s investment in Indonesia’s nickel sector at the expense of the global nickel space is an example of shifting dynamics.
Frontier regions are looking to position themselves without fixed alliances, focused purely on delivering metals into fractured supply chains and, where they have the means, their own downstream sectors.
A grand example is Saudi Arabia granting access to the rich Arabian-Nubian shield through a reformed mineral development framework. A more modest example is El Salvador’s decision late last year to overturn a 2017 mining ban.
As this Future of Exploration project has explored in detail, technology presents not only opportunity in greenfield terrains but renewed hope for discovery in well-trodden exploration strongholds.
More advanced geophysical techniques are presenting more and better data with faster turnarounds. Those data are being managed more efficiently and applied to discrete problems with more advanced tools such as AI for solutions to real challenges. Finding deposits under cover, and faster than ever thought possible appears doable given the rate of technical advance.
The depths of Australia, Canada, the US, Chile and Scandinavia represent their own frontiers.
The world needs these efforts to be more successful in more jurisdictions. This will only be possible if we successfully integrate at ground level ESG learnings with technological advances, alongside traditional exploration nous.
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This thought leadership piece is in partnership with the Mining Journal's Future of Exploration.
