MINING INDABA •
EXPLORATION, ESSENTIAL BUT CONSTRAINED
As the mining sector looks ahead to 2026, the global exploration landscape is expected to remain subdued, characterised by tight budgets, high geopolitical risk, and persistent market pressures, writes Dr Nicolaas C Steenkamp. While demand for certain critical minerals continues to expand, the structural challenges facing the industry, from policy uncertainty to environmental, social, and governance( ESG) constraints are expected to keep exploration activity at historically low levels.
Africa: Exploration still in decline Across Africa, exploration spending is set to remain low, with very few significant new projects anticipated. South Africa, historically a mining powerhouse, continues to lose ground due to regulatory complexity, power shortages, and a lack of investor confidence. The absence of meaningful greenfield exploration projects underscores a long-term concern: a gradual depletion of reserves without sufficient replacement.
In Western Africa, a wave of nationalisation measures and outright expropriations has further dampened investor appetite. Several countries in the region, facing fiscal challenges and rising political instability, have moved aggressively to exert greater state control over their mining sectors. While these policies are designed to increase local benefit from resource extraction, they have created a chilling effect for international explorers. The cost of political risk insurance has surged, and in some cases, international firms are simply walking away.
Global market pressures and exploration budgets Exploration budgets, traditionally among the first line items cut during downturns, will continue to face intense pressure in 2026. Despite a long-term narrative of mineral scarcity, especially in battery metals such as lithium, cobalt, and nickel, many commodity prices remain soft. Elevated stockpile levels in China, built up during earlier supply chain fears, have kept markets oversupplied and dampened investor enthusiasm.
Copper, often seen as a bellwether for global industrial activity, is emblematic of this dynamic. While long-term electrification and grid expansion are expected to underpin demand growth, shortterm surpluses and muted industrial activity have capped prices. Juniors and mid-tier explorers are finding it increasingly difficult to raise funds, as investors prefer to back established producers with near-term cash flows rather than riskier exploration ventures.
This budget squeeze has created a“ last in, first out” dynamic: exploration is the first casualty in downturns and the last to recover when markets stabilise. Unless commodity markets stage a robust rebound, 2026 is unlikely to see a significant resurgence in exploration activity globally.
Policy and geopolitical uncertainty One of the defining features of the current exploration climate is the level of uncertainty facing the sector. Policy instability, particularly in resource-rich emerging markets, makes longterm investment decisions exceptionally difficult. In Africa, Latin America and parts of Asia, shifting tax regimes, unpredictable royalty structures, and sudden changes in permitting rules are undermining project economics.
Geopolitical volatility adds an additional layer of complexity. The war in Ukraine, tensions in the South China Sea, and resource nationalism in Africa and South America are forcing mining companies to rethink where they allocate scarce exploration capital. Investors are demanding higher risk premiums, and this makes marginal projects financially unviable.
For many companies, the response has been to consolidate exploration spending into a few geographies with stable regulatory environments, such as Canada and Australia, while scaling back elsewhere. This trend risks widening the gap between regions that benefit from steady exploration investment and those that fall further behind.
ESG and regulatory bottlenecks Even where geological potential is high and political risk manageable, ESG requirements and regulatory hurdles are delaying exploration and development projects. Permitting timelines in many jurisdictions have stretched considerably, often taking years before drilling can begin. Environmental assessments, community consultations, and land-use negotiations – while essential for sustainable development – are contributing to significant project delays.
The mining industry faces increasing scrutiny from investors, NGOs, and consumers who demand transparency and accountability across the supply chain. Failure to adhere to stringent ESG standards can result in reputational damage, financing challenges – and in some cases – project cancellation. For explorers, this creates a paradox: the world needs more metals for the energy transition, yet the pathways to discovering and developing them are increasingly constrained.
ESG requirements and regulatory hurdles are delaying exploration and development projects. www. africanmining. co. za African Mining Publication African Mining African Mining • January 2026 • 33