Critical minerals versus major minerals: a comparative study of exploration budgets

Disruptions in the minerals supply chain play a central role in defining the future stock of minerals; therefore, an in-depth analysis of the outcomes and variables affecting exploration is required. In comparative terms, the exploration of critical minerals and major minerals presents geological and technical differences; thus, exploration budgets for critical minerals should be expected to depart from those observed in other minerals. In this context, the main goal of this paper is to contrast how exploration budgets differ between critical and major minerals when considering a set of key variables. We take a multivariate statistical analysis approach based on firm-level budget exploration data to show four key findings: exploration budgets allocated for critical minerals remain consistently lower than major minerals even when controlling for other factors. Moreover, they present a higher sensitivity to fluctuations in commodity prices. Besides, the investment made by larger companies in critical minerals significantly lags behind those made by junior companies. Additionally, the focus of exploration activity for critical minerals predominantly lies in the earlier stages of the exploration process. We expect these initial results to be used as a step forward to facilitate the discussion about exploration policies and, consequently, the reliability of the supply chain.