Fathom Geophysics Newsletter 25

Newsletter banner image

Industry conditions: It's business as usual (knock on wood)

THE Australian mining industry maintained slightly-above-average activity levels in the September 2018 quarter, in tandem with the broader economy.

Our latest analysis of Australian Bureau of Statistics (ABS) data incorporates figures publicly available as at 16 January 2019.* We included 37 ABS economic time series in our analysis. [1]

Even though the industry's overall activity level remains above the study period's average (see red line in Figure 1), it represents a fallback from the activity-level estimate contained in our analysis of June 2018 quarter data issued by the ABS (see our earlier write-up in Newsletter 24, Story 1).

As well, the industry's activity peak of late 2016 to early 2017 is now looking stronger than it did during our previous-quarter data analysis.

In recent months, those in or observing the industry have been reportedly somewhat hesitant about calling the sector's latest activity levels a boom, according to news outlets. [2] [3] [4] And, as usual, all eyes have been glued to the Chinese economy, Australia's largest mineral export destination. [5] [6]

Figure 1Figure 1: Activity level of the Australian minerals exploration and mining industry (red solid line) compared to Australian income from gross domestic product (grey solid line). Data were sourced from the Australian Bureau of Statistics and were the latest available as at 16 January 2019. Results are plotted on a financial quarterly basis (x-axis) and are shown in terms of the number of standard deviations above or below average (y-axis) for the time period analyzed (from the June 2005 quarter up to and including the September 2018 quarter). Dashed lines denote a relatively greater amount of uncertainty, which arises inherently near series end-points upon calculation of 7-term Henderson moving averages. To view a larger version, click on either the image or this text link.

A trajectory plot of the industry's activity level versus Australian income from GDP (Figure 2) provides another way of looking at the tightrope being traversed by the mining industry since emerging in the latter half of 2016 from it four-and-a-half years of wandering in commercial purgatory.

Between the September 2016 and September 2018 quarters, the industry has been orbiting within a relatively tightly confined area, and has been avoiding massive swoons outside of one standard deviation from the origin.

Figure 2Figure 2: Trajectory plot of the Australian minerals exploration and mining industry's activity level (y-axis) relative to Australian income from gross domestic product (x-axis) for the time period analyzed (from the June 2005 quarter up to and including the September 2018 quarter). The scale on both axes are constructed in terms of the number of standard deviations above or below average. Dotted gray squares show the +/-0.5 standard deviation iso-line (inner square) and the +/-1.0 standard deviation iso-line (outer square). Note that a relatively greater amount of uncertainty arises inherently near series end-points upon calculation of 7-term Henderson moving averages. Note also that the trajectory line has been smoothed for ease of viewing. Data were sourced from the Australian Bureau of Statistics and were the latest available as at 16 January 2019. To view a larger version, click on either the image or this text link.

Industry turbulence rises back up to around its average

An indicator of how long the industry might feasibly sustain it's current activity level is the degree of unusualness or turbulence worked up within the industry at any given time. The measure of unusualness we use in our analysis is called the Mahalanobis distance (see dotted line with asterisk datapoint markers in Figure 3).

The degree of unusualness of the industry's situation has risen to back around its study-period average, given the revisions and new information contained in the latest-available ABS data. It may be signaling that the industry's above-average overall activity level — as slight as it is — is relatively unsustainable.

When the economic data's Mahalanobis distance is large (i.e., has a value that's very much above average on one of our graphs here), it means the situation is about as unusual as (say) having every student in a classroom ace a properly written, properly administered, nationally normed academic test. Equally, large measures of Mahalanobis distance would occur if (say) every student scored zero on one of these tests. Or if every student scored the exact same grade on the test. All these scenarios would be very strange occurrences. If, somehow, for an extended period of time every student were to ace every test, then under such 'new-normal' circumstances you'd get a large Mahalanobis distance if all of a sudden we obtained a nice bell-curve spread of results among students taking their next test. A small Mahalanobis distance (i.e., a value that's very much below average on one of our graphs here) occurs when the statistically-typical scenario is happening.

Figure 3Figure 3: Activity level of the Australian minerals exploration and mining industry (red solid line) compared to the degree of unusualness or turbulence of the industry's situation as defined by the data's Mahalanobis distance (gray dotted line). Data were sourced from the Australian Bureau of Statistics and were the latest available as at 16 January 2019. Results are plotted on a financial quarterly basis (x-axis) and are shown in terms of the number of standard deviations above or below average (y-axis) for the time period analyzed (from the June 2005 quarter up to and including the September 2018 quarter). Dashed lines denote a relatively greater amount of uncertainty, which arises inherently near series end-points upon calculation of 7-term Henderson moving averages. To view a larger version, click on either the image or this text link.

A trajectory plot of the industry's activity level versus the degree of unusualness of its situation (Figure 4) puts the September 2018 quarter at a location that's quite central in the ever-changing pathway the industry has traveled along since the start of the study period.

Figure 4Figure 4: Trajectory plot of the Australian minerals exploration and mining industry's activity level (y-axis) relative to the unusualness or turbulence of the industry's situation, as defined by the Mahalanobis distance (x-axis) for the time period analyzed (from the June 2005 quarter up to and including the September 2018 quarter). The scale on both axes are constructed in terms of the number of standard deviations above or below average. Dotted gray squares show the +/-0.5 standard deviation iso-line (inner square) and the +/-1.0 standard deviation iso-line (outer square). Note that a relatively greater amount of uncertainty arises inherently near series end-points upon calculation of 7-term Henderson moving averages. Note also that the trajectory line has been smoothed for ease of viewing. Data were sourced from the Australian Bureau of Statistics and were the latest available as at 16 January 2019. To view a larger version, click on either the image or this text link.

Some ups and some downs

We're seeing a mixture of soothing and potentially worrying developments in the various mining industry-related subindexes we generate as part of our industry conditions analysis.

On the bright side, expenditures (see blue line in Figure 5) haven't ballooned out of control, and production and income (see gold line in Figure 5) have remained relatively buoyant. Both of these subindexes are situated around the study-period average.

And while inventories of mineral commodities (see green line in Figure 5) are no longer well below average, at least they haven't shot up above their study-period average.

Exports (see purple line in Figure 5) seem to be on the upswing after a quite bumpy ride over the past couple of years. Oddly, though, sales (see salmon line in Figure 5) seem to be behaving in opposition to exports by taking a drastic downward turn. If it's a real phenomenon, we may see inventories pile up in the not-too-distant future, all else being equal. It's worth bearing in mind, though, that the last few data points in each of the graphs are the least bedded down and have the greatest likelihood of being revised in future data releases.

The various movements in subindices seem to suggest a mining industry that is operating in a mixed-signals economic environment.

Figure 5Figure 5: Mineral commodity demand-side and supply-side subindices: Production and Income, Expenditure, Exports, Sales, Inventories. Also shown is the unusualness or turbulence of the industry's situation, as defined by the Mahalanobis distance. Data were sourced from the Australian Bureau of Statistics and were the latest available as at 16 January 2019. Results are plotted on a financial quarterly basis (x-axis) and are shown in terms of the number of standard deviations above or below average (y-axis) for the time period analyzed (from the June 2005 quarter up to and including the September 2018 quarter). Dashed lines denote a relatively greater amount of uncertainty, which arises inherently near series end-points upon calculation of 7-term Henderson moving averages. To view a larger version, click on either the image or this text link.

Drilling still on the up and up

Australian mineral exploration drilling activity across new and existing deposits in the September 2018 quarter, both in expenditure terms and in meters-drilled terms, reached a level not seen since the middle of 2011 (Figure 6).

It's anticipated that as the years go by and the search for the easiest, most shallow deposits yields fewer and fewer decent finds, drilling activity will increasingly go toward exploration for deeper-seated ore deposits. [7]

Average export prices (see dotted green line in Figure 6) for the September 2018 quarter aren't bad, being slightly above the study-period average.

However, a closer look at the different categories of export prices being averaged (not shown among our figures here) reveals that export prices for the category of 'Metal Ores And Minerals' squeaked in at a hair's breadth above the study-period average. Meantime, export prices for what the ABS categorizes as 'Other Minerals' were riding around one whole standard deviation above their study-period average.

Figure 6Figure 6: Average export price (green dotted line), which is the average of (1) the export price index by balance of payments classification of exports for metal ores and minerals, and (2) the export price index by balance of payments classification of exports for metals excluding non-monetary gold. Also shown is non-petroleum mineral exploration activity in terms of exploration meters drilled (dashed brown line, obtained by averaging the meters drilled at new deposits and the meters drilled at existing deposits), and exploration expenditures (solid brown line, obtained by averaging expenditures at new deposits and expenditures at existing deposits). The activity level of the Australian minerals exploration and mining industry (gray solid line) is included for comparison purposes. Data were sourced from the Australian Bureau of Statistics and were the latest available as at 16 January 2019. Results are plotted on a financial quarterly basis (x-axis) and are shown in terms of the number of standard deviations above or below average (y-axis) for the time period analyzed (from the June 2005 quarter up to and including the September 2018 quarter). Note that a relatively greater amount of uncertainty arises inherently near series end-points upon calculation of 7-term Henderson moving averages. To view a larger version, click on either the image or this text link.

Payroll may start climbing

Measures of the Australian mining industry's profitability have remained at around their study-period averages, since backing off from their stunning export-price-supported peak of late 2016 (see red lines in Figure 7). The measures we follow are the ABS time series data for mining's corporate profits before income tax (labeled CPBIT-M on graphs), mining's company gross operating profits (labeled CGOP-M), and mining's ratio of business gross operating profits to sales (labeled RAT-BGOP/S-M).

The expenditure subindex (see blue line in Figure 7) and mining's wages and salaries (see black line in Figure 7) seem to have remained contained in the September 2018 quarter.

Figure 7Figure 7: Profitability measures for the mining industry (red lines), namely corporate profits before income tax (solid red line labeled CPBIT-M), company gross operating profits (dashed red line labeled CGOP-M), and the ratio of business gross operating profits to sales (dotted red line labeled RAT-BGOP/S-M). Also shown for comparison purposes are the expenditure subindex (blue line), the inventories subindex (green line), and wages and salaries for mining (black line). Data were sourced from the Australian Bureau of Statistics and were the latest available as at 16 January 2019. Results are plotted on a financial quarterly basis (x-axis) and are shown in terms of the number of standard deviations above or below average (y-axis) for the time period analyzed (from the June 2005 quarter up to and including the September 2018 quarter). Note that a relatively greater amount of uncertainty arises inherently near series end-points upon calculation of 7-term Henderson moving averages. To view a larger version, click on either the image or this text link.

However, mining's wages and salaries, a variable that's incorporated into our expenditure subindex, may start breaking out in the near future.

One sign is that reporters covering the mining industry have also noted the growing difficulties employers were facing in finding suitable candidates to fill vacant work positions. [3] [8]

Another sign comes in a remark in the minutes of the Reserve Bank of Australia's board from a December meeting over monetary policy. The paragraph, while anodyne in its language, likely caused the nation's employers to sit up and take notice from a wage-paying perspective [4]:

"[A]verage earnings had increased at roughly the same rate as consumer prices over the previous five years or so, leaving real average earnings relatively unchanged despite moderate productivity growth. This had followed an extended period during the resources boom when real average earnings had consistently risen faster than productivity. As a result, the gap between real average earnings and productivity that had opened up during the resources boom [have by now] been largely closed."

A look at some labour-related statistics available on the RBA's website reveals the veracity of the statement, especially when viewed over the long haul, starting from 1990 (Figure 8).

Figure 8Figure 8: Quarterly reported figures for year-ended percentage change in Australian (1) non-farm labor costs, (2) non-farm average earnings per hour, and (3) non-farm labor productivity per hour. Data were sourced by the Reserve Bank of Australia from the Australian Bureau of Statistics and were the latest available figures on the RBA's website as at 18 January 2019. The data is shown as it was supplied; no z-scores and no moving averages were calculated. To view a larger version, click on either the image or this text link.

Precariously perched economy

Even so, the question of whether and how quickly the mining industry's wages bill will tick up depends on how bustling the remainder of Australia's economic parts look in the year ahead.

Our reckoning is that the industry should prepare itself for all possible eventualities on this front.

If everything pans out well enough for the various parts of the national economy in the next 12 months, miners and explorers may find themselves paying quite a premium to attract workers.

But the International Monetary Fund has just cut its global growth forecasts. [9]

And the Australian economy could find itself in a prolonged stagnation, with workers in less of a position to negotiate their remuneration [14], should (1) the trade-related disagreements between China and the United States calcify, exacerbating the slowing of China's economy [10] [11] [12], and (2) should the domestic housing market experience a sizeable softening nationwide as anticipated [13].

No doubt about it: collectively, Australia's workers and their households have been financially stretched lately, with little room left to stretch further, a situation that has been brought up here and there in the media during the past year. [15] [16]

The major pain points for the workforce include (1) flaccid wage growth, (2) the resulting drag-down effect on household disposable income, (3) the inevitable costs involved in leading a modern life and keeping up with the Jonses, and, (3) once those costs are met, the lack of much leftover cash to save in a piggy bank.

Wage growth has been languishing at its lowest levels not only since our study period's start (mid-2005), but also from the time these statistics began being collected (see purple and olive lines in Figure 9).

Figure 9Figure 9: Quarterly reported figures for year-ended percentage change in Australian (1) private sector wage growth, and (2) public sector wage growth. Data were sourced by the Reserve Bank of Australia from the Australian Bureau of Statistics and were the latest available figures on the RBA's website as at 18 January 2019. The data is shown as it was supplied; no z-scores and no moving averages were calculated. To view a larger version, click on either the image or this text link.

Households have been relatively restrained in their spending. Historically-staid levels of growth in household consumption of between 2 and 3 percent have been in play since mid-2015 (see orange line in Figure 10a). While they're not cutting spending to the bone, households certainly haven't been living large.

Most worryingly, since about mid-2015 their moderate levels of growth in spending have been exceeding their lousy levels of growth in disposable income (see turquoise line in Figure 10a), households have had less and less to save (Figure 10b). In everyday parlance, households in the aggregate have been spending more than they've been earning.

Figure 10aFigure 10a: Quarterly reported figures for year-ended percentage change in Australian (1) real household consumption growth, and (2) real household disposable income. Data were sourced by the Reserve Bank of Australia from the Australian Bureau of Statistics and were the latest available figures on the RBA's website as at 18 January 2019. The data is shown as it was supplied; no z-scores and no moving averages were calculated. To view a larger version, click on either the image or this text link.

Figure 10bFigure 10b: Quarterly reported figures for year-ended percentage change in Australian household saving ratio (as a percentage of household net disposable income). Data were sourced by the Reserve Bank of Australia from the Australian Bureau of Statistics and were the latest available figures on the RBA's website as at 18 January 2019. The data is shown as it was supplied; no z-scores and no moving averages were calculated. To view a larger version, click on either the image or this text link.

With disposable income growth in the 1-2 percent range, households would have to tighten their consumption belts to recession-like levels (i.e., in the vicinity of zero percent growth, or even to negative territory) to flush out a spare quid or two to earmark for savings. That wouldn't be good news for the broader Australian economy, seeing as how household consumption typically makes up around 55-58 percent of nominal GDP. (Investment in private dwellings accounts for just 6 percent.)

So right now, it seems there's "little fat left to trim", as one Australian reporter put it. [15]

If growth in workers' earnings don't soon see a boost that at least keeps pace with current household consumption growth levels (as middle-of-the-range as they are), and households continue on their path to ever-dwindling savings ratios, they will eventually reach the zero savings-ratio threshold.

If negative savings ratios were reached, it would imply that households as an aggregate group have reached the stage where they're not only no longer adding to their savings stash, but also they're pulling funds out of savings. This happened in the mid-2000s, but back then people were feeling collectively flush with wealth largely due to booming real estate values. This time around, a downturning housing market could leave over-spending, "dis-saving" households without any wealth backstop — and as exposed as a shag on a rock.

If workers' earnings don't increase, though, how much can households realistically reduce their spending?

Households don't seem to be frivolously splashing their money around on purchases of retail goods. In fact, retail growth figures are looking decidedly anemic when viewed over the long run (Figure 11).

Figure 11Figure 11: Monthly reported figures for year-ended percentage change in Australian year-ended retail sales. Data were sourced by the Reserve Bank of Australia from the Australian Bureau of Statistics and were the latest available figures on the RBA's website as at 18 January 2019. The data is shown as it was supplied; no z-scores and no moving averages were calculated. To view a larger version, click on either the image or this text link.

The ABS includes within the category of "retail" the retailing of supermarket food, liquor, household goods, gardening supplies, electronics, clothing, footwear, personal accessories, department stores, cafe/restaurant/carry-out meals, catering services, and a category called "other" (such things as newspapers, books, sports equipment, camping equipment, toys, games, pharmaceuticals, cosmetics, toiletries, stationery, antiques, flowers).

As one economic commentator remarked last year, recent levels of economic growth and household-income growth (especially when expressed as per-capita figures) are more in line with what you'd expect during a recession, whether or not Australia is technically experiencing one. [17]

Households seems to be retreating into their shells (Figure 12). The latest figures representing the collective balance sheets of Australian households show growth rates in the value of financial deposits, the value of household dwellings, and the value of household net worth to be down around the levels plumbed during the 1991 recession. And growth in households' total liabilities (aka household indebtedness) has essentially never recovered since the Great Financial Crisis of 2008 and 2009.

Figure 12Figure 12: Quarterly reported figures for year-ended percentage change in the value of Australian (1) household deposits, (2) household dwellings, (3) household total liabilities (indebtedness), and (4) household net worth. Data were sourced by the Reserve Bank of Australia from the Australian Bureau of Statistics and were the latest available figures on the RBA's website as at 18 January 2019. The data is shown as it was supplied; no z-scores and no moving averages were calculated. To view a larger version, click on either the image or this text link.

* We came up with our data analysis because we wanted a formalized, agnostic and at least semi-realistic snapshot of the state of the industry, instead of relying on statistics like Diggers and Dealers attendance figures, idle drill-rig counts, Gina Rinehart's current net worth, or the price of coffee in Perth, Australia. It's our hope that our industry activity index, our industry turbulence index, and our group of demand-side and supply-side subindices spark useful debate and discussion. Please note that the results of our analysis and our discussion of them should not be regarded in any way as advice (e.g., investment advice, financial planning advice, career advice, and so on). If you choose to act upon the information contained in the above material, then be it upon your own head.

** Keep in mind that the various ABS time series we rely on are subject to upward or downward revisions with each new data release (which is inherent in doing economic surveys). Revisions tend to be only quite minor, and tend to affect only the most recent quarters. But if enough small revisions occur, and if they tend to occur together in one direction (e.g., mostly upward, or mostly downward), then that can significantly reset industry trends seen in the final analysis. It means, for instance, that once all of the next quarter's datasets are made completely available, we may end up seeing a re-jigging of the trends we're currently examining and pondering about in this write-up.

References and Notes

[1] Note: The 37 ABS economic time series included in our analysis were:

  • Company Profits Before Income Tax: Mining
  • Company Gross Operating Profits: Mining
  • Ratio of Business Gross Operating Profits / Sales: Mining
  • Income From Sales of Goods and Services: Total: Mining
  • Income From Sales of Goods and Services: Total: Professional, Scientific and Technical Services
  • Income From Sales of Goods and Services: Total: Construction
  • Engineering Construction: Value of Work Done: By the Private Sector For the Private Sector: Oil, Gas, Coal and Other Minerals
  • Export Price Index: Metal Ores And Minerals
  • Export Price Index: Other Minerals
  • Export Price Index: Metals (Excluding Non-Monetary Gold)
  • Mineral Exploration (Other Than For Petroleum): Expenditure: New Deposits
  • Mineral Exploration (Other Than For Petroleum): Expenditure: Existing Deposits
  • Mineral Exploration (Other Than For Petroleum): Metres Drilled: New Deposits
  • Mineral Exploration (Other Than For Petroleum): Metres Drilled: Existing Deposits
  • Gross Value Added By Industry: Mining: Iron Ore Mining
  • Gross Value Added By Industry: Mining: Other Mining
  • Gross Value Added By Industry: Mining: Exploration And Mining Support Services
  • Period Average Exchange Rates, Units of Foreign Currency per Australian Dollar: Trade-Weighted Index
  • Period Average Exchange Rates, Units of Foreign Currency per Australian Dollar: United States Dollar
  • Private New Capital Expenditure and Expected Expenditure, Australia: Actual Expenditure: Total: Mining
  • Wages and Salaries: Mining
  • Merchandise Exports: Iron Ore and Concentrates
  • Merchandise Exports: Gold, Non-monetary (Excl. Gold Ores and Concentrates)
  • Merchandise Exports: Copper Ores and Concentrates, Copper Mattes and Cement Copper
  • Merchandise Exports: Copper
  • Merchandise Exports: Silver, Platinum and Other Metals of the Platinum Group
  • Merchandise Exports: Aluminium Ores and Concentrates (Incl. Alumina)
  • Merchandise Exports: Aluminium
  • Merchandise Exports: Nickel Ores and Concentrates, Nickel Mattes, Nickel Oxide Sinters and Other Intermediate Products
  • Merchandise Exports: Nickel
  • Merchandise Exports: Ores and Concentrates of Base Metals (Excl. of Iron, Copper, Nickel, Aluminium, Uranium and Thorium) Not Elsewhere Specified
  • Merchandise Exports: Lead
  • Merchandise Exports: Zinc
  • Merchandise Exports: Sum of AHECC Chapter 26 Codes Confidentialised with Broad Commodity Details Restriction
  • Merchandise Exports: Crude Minerals (Excl. Coal, Petroleum, Precious Stones, Stone, Sand, Gravel, Sulphur, Unroasted Iron Pyrites and Natural Abrasives) Not Elsewhere Specified
  • DERIVED METRIC: Merchandise Exports: TOTAL
  • Inventories: Mining

Note that some of the above time series include data provided to the ABS from entities working in the oil and gas sector, as well as the coal-mining sector. Hence our analysis contains influences from these sectors and their prevailing current market conditions.

We used the ABS chained consumer price index to deflate the above time series data, where applicable.

We didn't include in our calculations any ABS data about national GDP. However, we do display Australian GDP in our graphs as a reference for discussion purposes.

The technique we used to analyze the data is called Multichannel Singular Spectrum Analysis (MSSA), which is equivalent to Extended Empirical Orthogonal Functions (EEOF) analysis. See, for example, the following seminal publication and further literature citing it: D.S. Broomhead and G.P. King (1986) "Extracting qualitative dynamics from experimental data", Physica 20D, 217-236.

[2] K. Diss (29 Nov 2018) "Rio Tinto's $3.5 billion Koodaideri iron ore mine is a welcome investment in WA, but it ain't no boom", ABC News.

[3] E. Borrello (2 Oct 2018) "Mining downturn makes way for 'mini-boom' as WA businesses warn against population cap", ABC News.

[4] H. McNeill (23 Oct 2018) " 'Ageing mines' to spark resurgence in WA's engineering industry: Deloitte", WAtoday.

[5] Reserve Bank of Australia (4 Dec 2018) "Minutes of the Monetary Policy Meeting of the Reserve Bank Board".

[6] Reserve Bank of Australia (January 2019) "The Australian Economy and Financial Markets: Chart Pack", 30 pages.

[7] J. Lucas (3 Mar 2018) "Australia's major gold miners digging deeper underground in hunt for major discoveries", ABC News.

[8] E. Parke (14 Nov 2018) "WA miners are searching for workers, but this time without 'mercenary-type salaries' ", ABC News.

[9] S. Amaro (21 Jan 2019) "IMF says the global economic expansion is losing momentum as it cuts growth forecasts", CNBC.

[10] T. Wibawa (4 Jan 2019) "China-US in 'fully fledged Cold War' that's set to continue in 2019, analysts warn", ABC News.

[11] P. Inman and L. Kuo (5 Jan 2019) "As China feels US tariffs bite, a chill spreads around the world", The Guardian.

[12] S. Letts (20 Jan 2019) "China opens the debt taps again as economic growth slows to multi-decade lows", ABC News.

[13] S. Oliver (12 Dec 2018) "The Australian economy in 2019: House prices, growth and interest rates", AMP Capital.

[14] D. Chau (15 Jan 2019) "Australia's fortunes are linked to China's economy — for better or worse", ABC News.

[15] S. Letts (8 Sep 2018) "Households are now spending more than they are earning — and that's not sustainable", ABC News.

[16] D. Scutt (8 May 2018) "Why Australian retail sales are so weak", Business Insider.

[17] G. Jericho (7 Mar 2018) "Australia isn't in a recession — but we might as well be", The Guardian.

[18] T. Boyd (19 Dec 2018) "Reserve Bank of Australia expected to downgrade its growth forecasts in 2019", Australian Financial Review.

About Fathom Geophysics

In early 2008, Amanda Buckingham and Daniel Core teamed up to start Fathom Geophysics. With their complementary skills and experience, Buckingham and Core bring with them fresh ideas, a solid background in geophysics theory and programming, and a thorough understanding of the limitations of data and the practicalities of mineral exploration.

Fathom Geophysics provides geophysical and geoscience data processing and targeting services to the minerals and petroleum exploration industries, from the regional scale through to the near-mine deposit scale. Among the data types we work on are: potential field data (gravity and magnetics), electrical data (induced polarization and electromagnetics), topographic data, seismic data, geochemical data, precipitation and lake-level time-lapse environmental data, and remotely-sensed (satellite) data such as Landsat and ASTER.

We offer automated data processing, automated exploration targeting, and the ability to tailor-make data processing applications. Our automated processing is augmented by expert geoscience knowledge drawn from in-house staff and from details relayed to us by the project client. We also offer standard geophysical data filtering, manual geological interpretations, and a range of other exploration campaign-related services, such as arranging surveys and looking after survey-data quality control.