Annual Review 1992 – Exploration 1992

Worldwide minerals exploration slipped in 1992 from 1991 levels. Although industrial production figures showed the US economy emerging from recession in early 1992, it was not until February 1993 that the lagging indicator of unemployment dropped to 7%. Most other industrialized countries are still in recession. Preliminary data for 1992 showed industrial production dropping in Japan (5%), Germany (1.4%), the United Kingdom (0.5%) and France (1.4%). The slowdown in industrial production led to reduced mineral demand. This resulted in lean cash flows from mining operations, which squeezed exploration funding. Although mineral prices were steady during most of 1992, some mineral commodity prices began falling in late 1992 and early this year. Exploration 1991-1992 According to Metals Economics Group (MEG), planned 1992 exploration expenditures were down by about 5%. Geographically, the leading exploration target was the United States with 21 % of the expenditures, followed by Australia (19%), Canada (18%), Latin America (15%), South Africa (9%) and the western Pacific (7.5%). The remaining 10% was split between Europe and Africa. There were absolute increases in exploration expenditures in the United States and Latin America. Latin America showed the largest increase. The change in the Mexican mining law allowing foreign ownership of mines should result in the inflow of direct foreign investment in Mexico's mining industry.