Western governments have grasped that the supply chains behind their fighter jets, data centres and power grids run through minerals they don’t control. In June, G7 leaders meeting in Evian hailed 195 critical-minerals projects announced since January, backed by €64 billion in investment and offtake commitments.
The urgency is warranted. But nearly all this mobilization is aimed at the end of the mining pipeline: faster permits, financing for shovel-ready projects, new refineries. Only a tiny share reaches greenfield exploration, the search for deposits no one has found yet. That is where every mine begins, and it is where the West is underinvesting most.
A Rounding Error
Global spending on grassroots exploration fell 8% last year, to US$2.57 billion, according to S&P Global Market Intelligence. That is the entire world’s annual budget for finding new deposits. A sum equal to just 5% of the G7’s announced commitments, about €3.2 billion, would more than match it.
The greenfield share of exploration budgets is shrinking, too. It fell to 21% in 2025, the lowest S&P has recorded. Between 1997 and 2004, it commanded nearly half. Meanwhile, spending at existing mine sites is reaching record levels. The industry is drilling where it already knows there is metal.
The most telling evidence comes from gold. Prices hit records last year and gold exploration budgets rose 11%. Yet grassroots work fell to a record-low share of gold spending. If record gold prices can’t pull money into greenfield exploration, price floors alone won’t do it for nickel or lithium. In battery metals the retreat is outright: budgets for lithium, nickel and cobalt fell a combined 43%.
Why the Market Falls Short
This isn’t simply a failure of nerve by investors. It is a structural gap with three causes.
First, the timeline outruns private capital. S&P estimates the average mine takes about 16 years to move from discovery to production, and PwC puts the time to permit and build a mine in Canada at about 20 years. Few investors will wait that long when other options pay back sooner.
Second, the explorer doesn’t capture most of the value it creates. A discovery and the drilling data behind it can open an entire district, and later entrants benefit from ground the first company proved up. None of that shows up on the explorer’s balance sheet.
Third, the security value of a domestic deposit isn’t priced at all. China refines more + 90% of the world’s rare earths and the vast majority of battery-grade graphite. Indonesian nickel has flooded the market, and Congo’s export quotas now set the price of cobalt. A Canadian junior searching for nickel isn’t just competing with other juniors. It is competing with a state-shaped price that ignores what an allied supply source is worth to Western governments.
The burden uniquely falls on junior explorers, which do most greenfield and early stage exploration work. Mark Bristow, the former Barrick chief executive, liked to say that exploration is to mining what research and development is to pharmaceuticals. Juniors are that R&D arm, and they have no revenue. They issue shares to pay for drilling and to hold their claims, and one weak result can close the door on the next financing.
Those doors are closing. Junior exploration budgets fell 13% last year. In an Ontario Prospectors Association survey this year, 75% of members reported significant difficulty raising capital and 81% reported rising costs, a formula that doesn’t align with the policy objectives of the nation.
Discovery is getting harder at the same time. MinEx Consulting estimates the world now makes 70 to 90 significant discoveries a year, down more than half from 202 in 2009. This, also at an average cost of roughly US$200 million each. That trend can’t support the mineral security goals Western governments have set for themselves.
The Supply Cliff
Fast-tracking known projects is worth doing, but it only draws down the existing inventory faster. The International Energy Agency projects supply gaps for copper and lithium through 2035. A greenfield discovery made today is a mine in the late 2030s at best. Clear the back end without refilling the front, and the West builds a supply cliff behind its new mines. “There’s just not enough copper deposits being found or developed,” Doug Kirwin, one of the first geologists on Mongolia’s Oyu Tolgoi deposit, told Bloomberg.
The good news is that governments already know how to fix this, because some have tried.
Canada’s flow-through share regime has drawn risk capital into exploration for decades by letting companies pass their exploration deductions to investors. Australia’s Junior Minerals Exploration Incentive let small greenfield explorers pass tax credits to shareholders, until it lapsed in 2025. Quebec created SIDEX with the Fonds de solidarité FTQ to take equity stakes in small explorers working new territory.
Similarily, Australia has committed A$566 million over a decade to map the continent for critical minerals; a 2023 Deloitte Access Economics study estimated that publicly funded geoscience data contributed A$76 billion to the Australian economy in a single year.
None of these has been enough on its own to reverse the decline. They need to be scaled up and made central to any national or subnational mineral strategy.
Co-investment in discovery. Public finance institutions and sovereign funds should build discovery funds that invest alongside juniors at the earliest stage. Pooled across hundreds of programs, greenfield risk is far more manageable than it is for any single company.
Make the incentives permanent. Investors need to know the support will last. Canada’s flow-through regime and Mineral Exploration Tax Credit should be made permanent, tilted toward grassroots work and critical minerals.
Fund public geoscience. Regional mapping and geophysical surveys point explorers to new districts and lower the cost of every program that follows.
Extend the price signal. Price floors and offtake commitments now being designed for late-stage projects should be long-term and transparent enough that explorers can count on a market for what they find.
Reduce Bureaucracy Speed up exploration permits, so the drill can turn in the same season the money is raised.
Explorers don’t need persuading to take geological risk. They need partners willing to share it. A few billion dollars a year at the front of the pipeline would protect the tens of billions now being committed at the back. Without it, every fast-tracked mine will draw down a reserve base no one is replacing. The time for action has never been more pressing.
Mr. Virtue is interim CEO of the Ontario Prospectors Association, which represents prospectors, geologists, junior explorers and service providers across Ontario.
