Platts reported that the Fraser Institute's 2008-2009 annual mining survey shows a gloomy outlook for global mining industry, with at least 30% of exploration companies expected to shut down.

Mr Fred McMahon, coordinator of the survey and the Institute's director of trade & globalization studies, said that survey responses indicate this year that the mining sector expects dramatically decreased investment plans along with a large number of companies either reducing activity or going out of business all together.

The survey found that more than 4 out of 5 mining executives believe that at least 30% of exploration companies will be forced out of business in the current economic downturn. Of that total, 2 out of 5 respondents believe 30% of the world's exploration companies will be forced out of business, with another 2 out of 5 stating that 50% or more of exploration companies will be forced out of business.

More than 90% of respondents believe the exploration and development activities of exploration companies will be curtailed, with 57% saying the activity will decline a great deal, the institute said. Nearly 85% of respondents say that the activities of production companies will be curtailed, though only 31% believe that the activity of production companies will decline a great deal.

Mr McMahon said that "With large numbers of exploration companies expected to go out of business and a vast majority of companies planning to curtail exploration and development investment in 2009, the world may face a shortage of raw materials and skyrocketing commodity prices as the world economy moves past the recession and into renewed growth."

(Sourced from www.platts.com)