"We really see the industry continuing to do well this year," Mark Ferguson, from S&P's Global Market Intelligence team, told attendees as he detailed the firm's latest annual world mineral exploration review and outlook report.

"Conditions are pretty strong. The producers have come out of a long period of trying to preserve margins and the juniors have responded and are able to start to capitalize on [better equity market sentiment]," he said. "That really translates to budgets rising. We expect budgets to be up by more than 20% or so this year."

Spending on the search for nonferrous metals will expand further in 2018 after turning a corner in 2017, the agency's market intelligence unit said in the report, released to coincide with the global mining conference.

The renewed optimism follows a 15% rise in global spending on the search for nonferrous metals in 2017, according to S&P's research, which was the first annual increase after four straight years of lower global exploration spending. Spending grew to around US$8.4 billion in 2017 from $7.3 billion in 2016, S&P said.

In terms of spending, "we've certainly come well off the lows of 2015 and the beginning of 2016", S&P's Ferguson said.

But while one S&P measure of the health of the mining sector shows marked improvement, Ferguson warned that risks to longer-term supply remained.

"We need to find new deposits, we need to be looking for the longer term supply of deposits, you know, 15 or 20 years out," he said. "Those deposits that are going to feed that supply chain 15 to 20 years out."

In its report, S&P said the mining industry had focused its exploration efforts at or near existing mines, with a long-term swing away from "grassroots exploration" made worse by scarce funding for juniors and more spendthrift producers.

The report also noted much recent growth in funding for exploration was coming from rising interest in the search for deposits of lithium and cobalt, both key ingredients in the batteries for electric cars.

Encouraged by the boost in demand for rechargeable batteries that has helped push metal prices higher, some juniors shifted their exploration focus in 2017 by dramatically increasing their spending on the search for cobalt and lithium.

Some 136 companies with budgets of around $157 million were scouring the world for lithium last year, more than doubled the 2016 total, S&P said. Meanwhile cobalt-focused exploration jumped at an even faster pace, with 52 companies allocating US$36 million in 2017, more than four times the 2016 budget.

But while the mining industry widely says it values exploration, its bigger players do not show that commitment by funding it substantially and steadily, the report warned. Between 2012 and 2016 producers with revenues in excess of $1 billion slashed exploration spending faster than their revenues declined, cutting the group's ratio of exploration spend to revenue to a 12-year low of 1.8% in 2016, from 3.2% in 2012.