The global economic slowdown has cast a pall over the mining industry with the vast majority of mining executives saying they expect a severe pull back in exploration activity and at least 30 percent of exploration companies going out of business, according to the Survey of Mining Companies 2008/2009, released by independent research organization the Fraser Institute.

"Survey responses indicate this year that the mining sector expects dramatically decreased investment and exploration along with a large number of companies either reducing activity or going out of business all together," said Fred McMahon, coordinator of the survey and the Institute's Director of Trade and Globalization Studies.

The survey found that more than four out of five mining executives believe that at least 30 percent of exploration companies will be forced out of business in the current economic downturn. Of that total, two out of five respondents believe 30 percent of the world's exploration companies will be forced out of business, with another two out of five stating that 50 percent or more of exploration companies will be forced out of business.

More than 90 percent of respondents believe the exploration and development activities of exploration companies will be curtailed, with 57 percent saying the activity will decline "a great deal." Nearly 85 percent of respondents say that the activities of production companies will be curtailed, though only 31 percent believe that the activity of production companies will decline a great deal. This comes after years of soaring exploration and development activities, as demand for commodities and their prices rose. Almost 70 percent of survey respondents indicated that they had increased exploration and development activity over the past five years.

"All this is bad news for an economy looking forward to recovery. With large numbers of exploration companies expected to go out of business and a vast majority of companies planning to curtail exploration and development investment in 2009, the world may face a shortage of raw materials and skyrocketing commodity prices as the world economy moves past the recession and into renewed growth," McMahon said.