Australian mineral exploration lowest in 7 years

Australian mineral exploration has dropped to its lowest level since 2007, the Australian Bureau of Statistics (ABS) revealed on Tuesday.

Exploration expenditure dropped to 183.5 million Australian dollars (140.08 million U.S. dollars) in the March quarter, 10 percent down on the same period in 2014 and three times lower than the high achieved in 2012.

Independent resources analyst Peter Strachan told the Australian Broadcasting Corporation that the lack of exploration being conducted would contribute to the eventual recovery of the value of commodities.

"With the lack of money being spent on developing new projects, it's almost certain that by late 2016 or early 2017 there will be shortage of supply of these commodities," Strachen said.

Chamber of Minerals and Energy spokesman Bruce Campbell-Fraser said that as mines move from the construction to production phase, the priority should be placed on attracting the next wave exploration investment.

"There's been a good effort (by state and federal government policy) to try and attract the right sort of environment through incentives to get people to spend money," Campbell-Fraser said.

The ABS data release comes amid continued speculation of Chinese investor interest in mid-tier Australian iron ore miners.

Minter Ellison West Australian managing partner Adam Handley told Fairfax Media that Chinese groups had shown capacity to acquire major interests in distressed assets in the past, particularly after the global financial crisis, and were again beginning to show interest in the iron ore sector on Tuesday.

"I think there is an opportunistic element to the current activity we are seeing with prices so low and companies which have taken a significant hit to their market caps," Handley said. Endi