Australia remains one of the world’s key centres for battery metals exploration despite a global downturn in spending, according to new analysis from S&P Global Market Intelligence.
Global exploration budgets for lithium, nickel and cobalt fell 43 per cent year-on-year in 2025 to $US958 million, marking the first major contraction since spending passed the $US1 billion threshold in 2022. The decline reflects weaker commodity prices, oversupply and tighter financing conditions, but the impact has varied significantly across jurisdictions.
Canada emerged as the leading global hub for battery metals exploration, underpinned by advanced-stage projects and strong policy incentives. However, Australia retained its position as a top-tier jurisdiction for lithium and nickel, even as it faced substantial budget reductions and industry consolidation.
In Australia, junior explorers significantly cut back spending across lithium programs, while major transactions reshaped the sector.
The acquisitions of Arcadium Lithium by Rio Tinto and Azure Minerals by Sociedad Química y Minera de Chile SA and Hancock Prospecting removed key independent players from exploration budgets. At the same time, stronger allocations from major miners including Rio Tinto and IGO Ltd. helped cushion the overall decline.
Nickel exploration also softened, with companies such as IGO and Chalice Mining. redirecting focus toward other commodities, while BHP wound down domestic nickel operations.
Despite these headwinds, Australia’s policy framework continues to provide greater structural support. The Critical Minerals Strategy 2023–2030, the updated Australian Critical Minerals Prospectus and a strengthened US–Australia critical minerals partnership are helping maintain long-term investment appeal through streamlined approvals and potential financing pathways.
While near-term exploration activity has contracted, Australia’s established project base, major miner backing and strategic policy alignment suggest the country remains well positioned to benefit when global battery metals demand recovers.