Greenfield drilling service price

IBISWorld forecasts greenfield drilling service prices to climb by 3.3% in 2025-26, to $438.47 per metre. Consistent workforce shortages in the mining sector under tight labour market conditions have continued to apply upwards pressure on labour costs for drilling companies and mining firms alike. Despite an easing in commodity prices like nickel and coking coal, exploration activity is expected to remain elevated and to boost demand for greenfield drilling services over the year. These factors are set to keep greenfield drilling service prices high over the year.

Greenfield exploration expenditure has hiked over the past five years. The number of greenfield metres drilled peaked in 2020-21 at 4.1 million. However, rising drilling and capital costs have constrained greenfield exploration activity, reducing the number of greenfield metres drilled in more recent years, with the total metres drilled falling to 2.8 million in 2024-25. Funding for greenfield exploration is influenced by investor sentiment, the ability to fund exploration drilling programs and the outlook for commodity prices and demand. Access to capital has become more difficult over the past few years as rising interest rates and inflationary pressures have dulled investor sentiment.

Greenfield exploration expenditure has fallen across all states, except for the Northern Territory, Western Australia and Tasmania. Western Australia topped the greenfield drilling expenditure and accounted for 53.5% of total greenfield exploration expenditure in 2024-25 (latest available data). Expenditure on exploration for copper, uranium and iron ore has grown strongly over the past five years. Exploration for gold represents the largest share expenditure, accounting for just under 35% of total exploration spend.

Operating costs for drilling companies have risen over the past five years, causing greenfield drilling service prices to rise. The Russia-Ukraine conflict caused global energy prices to swell as European buyers have become more active in global markets and sought to diversify supply sources. Tight labour market conditions have also placed upwards pressure on drilling costs. Overall, IBISWorld forecasts greenfield drilling service prices to climb at a compound annual rate of 10.8% over the five years through 2025-26.