Australia's expense for iron ore exploration reached A$216 million ($134.9 million) in the third quarter of 2024, rising 9.7% year on year and hitting the highest level in a decade, according to data from the country's Department of Industry, Science and Resources.

This increase in exploration spending is driven by iron ore prices, which surpassed $200/t in early 2021, a historical high, and sustained demand for the commodity.

Despite global bearish sentiment tied to China's sluggish economy, western Australia continues to focus on iron ore, noted Dean de Largy, director of Australia Critical Minerals. The company operates several ore mining projects in the Pilbara region, known for its rich iron ore deposits.

Explorers in Australia remain optimistic about finding high-grade iron ore reserves, with the expectation that companies producing high-grade ore will always find a market, regardless of global conditions, the director said. Additionally, some of the largest companies are also committing to producing medium-grade ore for the long term.

The need for high-grade ore to produce Direct Reduced Iron (DRI) and green iron has further spurred exploration activity.

However, global decarbonization trends and the Guinea-based Simandou project, expected to begin production in 2026, may lead to a surplus in seaborne iron ore trade. These factors, coupled with China's weak economy and risks in real estate sector will lower the average price of iron ore to $95/t, according to Tamara Thorne, senior analyst at Commodity Insights.