Record exploration: Are ASX 200 shares gearing up for the next mining boom?

Investors looking for S&P/ASX 200 Index (ASX: XJO) shares in the mining sector have plenty to choose from.

The Aussie market is unique in the prevalence of miners and big banks you’ll find among the ASX 200 shares – the biggest 200 listed companies in Australia.

Like Newcrest Mining Ltd (ASX: NCM), which is predominantly focused on gold.

Or BHP Group Ltd (ASX: BHP), which earns the bulk of its revenues from iron ore.

Or Oz Minerals Limited (ASX: OZL), with its strong focus on copper production and exploration.

The list of ASX 200 shares involved in mining goes on. And alongside the junior miners, the entire sector appears to be setting the stage for the next mining boom.

What’s next for ASX 200 mining shares?

The last big Aussie mining boom hit its crescendo in 2010, with companies spending big on exploration and bringing in fresh funds via capital raisings.

Now Australia’s resource companies look to be setting the stage for the next mining boom.

Warren Pearce, CEO of the Association of Mining and Exploration Companies, said (quoted by ABC News), “We’re going through a period that’s been as good as we’ve seen probably in 20 or 30 years. We’re at the sort of numbers that were at the height of the last mining boom back in 2010, 2012.”

Research agency Austex analysed the cashflow reports from 733 Australian resource companies, which included many explorers outside of ASX 200 shares.

Austex found that total exploration spending reached $974 million in the last quarter of 2021. That’s a new record and up almost 100% year-on-year.

The miners also raised a record $3.2 billion of capital in Q4, a 70% year-on-year increase.

And rising labour costs and pandemic-driven border closures haven’t slowed the rapid expansion in exploration activities.

According to Pearce (quoted by ABC News):

The last two years in the mineral exploration industry and the mining industry, they’ve been exceptionally positive in terms of the economic outputs, the production outputs, and indeed the profits and dividends to shareholders.

In terms of capital raising, we really haven’t seen much like this before … so we’ve done incredibly well.

And Western Australia’s reopening should add even more fuel to the fire.

“Once we’re able to see more people, more skilled workers come into the state to support both the mining industry and the exploration industry, you’ll see a further acceleration of that growth,” Pearce said.

How have these 3 ASX miners been tracking?

The 3 ASX 200 shares named above have put in divergent performances so far this year.

Oz Minerals trails the pack, down 10.3% year-to-date. That compares to a 2.8% loss posted by Newcrest and a 14% gain for BHP shares.

Over that same period, all the ASX 200 shares taken together are down 5.0%.

The post Record exploration: Are ASX 200 shares gearing up for the next mining boom? appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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