Annual Review 1993 – Exploration 1993

During 1993, contraction of indus¬trial economies in Germany (-2%), France (-1 %), Japan (-0.1 %), Eastern Europe (-2%) and the former Soviet Union (-13%) dimmed prospects of a robust economic recovery for North America. Some European countries that suffer from high unemployment and large government deficits have non-com¬petitive cost structures that will require long-term economic reforms to solve. Restructuring in the United States also continued in 1993. The sluggish pace of the US economic recovery, in¬troduction of federal tax increases and the persistence of high levels of unemployment did little to inspire consumer confidence. By the end of the year, however, sales of consumer durable and capital equipment began to grow. Depressed demand for minerals by industrial economies in recession was partially offset by continuing rational¬ization or abandonment of non-competi¬tive productive capacity in Eastern Eu¬rope and the former Soviet Union. Al¬though aluminum, lead, titanium sponge and zinc prices fell, increases in copper and steel consumption helped steady their prices along with prices of some alloys. Cash flow to the mining industry - the primary source of exploration funds - was therefore constrained. For many companies, exploration expendi¬tures were reallocated geographically and in terms of commodities sought.