Australian Resource & Investment October 2021 by Prime Creative Media

VOLUME 15 NUMBER 3 | 2021

Australian Resources & Investment DYNAMIC COPPER ENVIRONMENT

LITHIUM LAYS ITS FOUNDATION

URANIUM PREPARES TO REBOUND

Gold’s prospects in

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THE FUTURE

COKING COAL OPPORTUNITY

AUSTRALIAN RESOURCES & INVESTMENT

COMMENT

Shareholders soak up dividend delight BEN CREAGH Ben.Creagh@primecreative.com.au

Reporting season has been a story of record dividends for many companies. But can they maintain these payouts?

hat a good year for investors to hold stock in blue-chip ASX-listed mining companies if dividends are their end game. Since the previous edition of Australian Resources & Investment went to print, investors have seen a wave of huge dividends declared by mining companies. And the major miners led the way in this regard. Rio Tinto got the bonanza rolling back in July when it declared an ordinary dividend for the first six months of 2021 that was 143 per cent higher than the first half of 2020. To cap off this record result, Rio Tinto declared a special dividend as well, taking that increase up to 262 per cent higher than the previous corresponding period. BHP then maintained its consistent track record of solid payouts to shareholders, declaring a final dividend for the 2021 financial year, along with an interim dividend that was a 151 per cent increase on the previous period. Australia’s third largest iron ore miner, Fortescue Metals Group, also more than doubled its final dividend in the 2021 financial year, taking its total payout to around $11 billion. The massive dividends not only reflected the record iron ore prices all three miners enjoyed during these reporting periods, but also their strong operational performance and cost management. With iron ore prices halving since hitting this year’s all-time high (at the time of print), repeating these massive payouts next year looks unlikely. Capital expenditure is also relatively low among the larger ASX-listed mining companies, at least in comparison to a decade ago when the commodity markets shared similar strengths. This is another factor that has made the surge in dividends possible, but may also be set to change. As ESG (environmental, social and governance) pressures increase from investors, miners will inevitably need to lift their capital spend on projects and initiatives that support their ambitions in this respect. Fortescue, for example, has already pledged to invest 10 per cent of its profits into Fortescue Future Industries (FFI), a company it launched last year that is focussing on being a leader of the global energy transition. More initiatives like FFI, though perhaps not to the same scale, are bound to surface from mining companies as they appease the ESG agendas of investment communities. While this emerging story will surely impact future dividends, at least many companies made their payouts count this time around when the opportunity was there.

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W W W. A U S T R A L I A N R E S O U R C E S A N D I N V E S T M E N T. C O M . A U

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CONTENTS

I N T H I S I S SU E 6

T H E F E AT H E R S T O N E REPORT

Copper bears and bulls slug it out

F E AT U R E D

10 Analysis with Regina Meani 12 WA miners flourish in Deloitte Index 14 Copper goes green 18 BHP and Woodside merger: What’s next?

URANIUM

36 Yellowcake to regain its glow

MINING SERVICES

46 Implications of climate change on water quality

48 Vocus connects the dots SILICA

GOLD

The Perth Mint on the past, present and future

24 WA gold mining activity snowballs 28 Gold investment keeps its shine

40 Sizzling silica heats up W O R K F O R C E M A N AG E M E N T

50 Forking out for future wealth IRON ORE

42 Premium product strengthens Razorback’s case

FOLLOW THE LE ADERS

30 What is the strategic role of gold?

52 The latest executive moves at ASX-listed companies

C O K I N G C OA L

44 Coking coal miners seize the day LITHIUM

32 Powering through the battery boom

EVENTS

54 What’s happening in the resources indust r y?

48 –4–

T H E F E AT H E R S T O N E R E P O R T

THE

Featherstone REPORT

BULLS AND BEARS SLUG IT OUT OVER DIRECTION OF COPPER BY TONY FEATHER STONE

Metal’s increasing use in renewable-energies arena ensures a bright long-term future. Tony Featherstone is a former managing editor of BRW, Shares and Personal Investor magazines. The information in this article should not be considered personal advice. It has been prepared without considering your objectives, financial situation or needs. Before acting on information in this article consider its appropriateness and accuracy, regarding your objectives, financial situation and needs. Do further research of your own and/or seek personal financial advice from a licensed adviser before making any financial or investment decisions based on this article. All prices and analysis at September 15, 2021.

–6–

“D

r Copper” is providing a tricky diagnosis for investors. Copper bears argue the metal has run too far, too fast. The bulls, however, say copper is in a multi-year price uptrend. Since 2020, the bulls have been in charge. The LME copper price soared from $US4863 ($6620) a tonne in March 2020 at the peak of the global equities crash, to a above $US10,000 in May 2021. The three-month copper contract traded near $US9300 a tonne in early September 2021. Copper’s ability to predict major turning points in the global economy again came to the fore during the pandemic (hence the joking reference that Dr Copper has a PhD in economics!). US investment bank Goldman Sachs this year predicted copper would hit $US15,000 a tonne by 2025, buoyed by demand from renewable-energy providers. Other forecasters are more sanguine. The World Copper’s use in electric vehicles and renewable energies will drive demand.

Bank estimates the spot price for copper will decrease to $US7500 in 2022, before rising to $US8250 by 2030. The International Monetary Fund tips an average price of $US8313 in 2021, followed by a gradual decline over five years. The Australian Government tips an average copper price of $US7980 in 2023, in its Resources and Energy Quarterly June 2021. Copper exports are forecast to reach $13 billion in financial year 2022 (FY22), from $10 billion in FY20, thanks to rising copper production and the booming copper price. The divergence between government and market forecasters on copper’s outlook reinforces the tussle between copper bears and bulls. Goldmans is among the most bullish forecasters on copper, but plenty of private firms have higher copper forecasts than government bodies. So, who is right? The answer partly depends on

AUSTRALIAN RESOURCES & INVESTMENT

Copper mining in Chile has been hampered by worker strikes.

one’s investment horizon. There are shortterm fears that China might release more copper stockpiles to clamp down on rising commodity prices and the prospect of higher inflation. In June, the World Bank said the global economy is set for its fastest recovery in more than 80 years, after a savage recession last year. But global economic forecasts depend greatly on COVID being contained and lockdowns easing. All bets would be off if a virus mutation emerged that is resistant to current vaccines or made them less effective. Moreover, a slower-than-expected recovery in the global economy in 2022 would puncture copper’s rally and weigh on other commodity prices. Copper’s rally over 12 months might have already factored in anticipated global economic recovery in 2022, and then some – leaving little room for disappointment in the current price. Technical analysts are also sweating on copper’s price action. After breaking through previous resistance around $US8000 on its chart, copper stormed above US$10,000 but has since retreated. They will watch if copper retests previous price support near $US8000 in the next 12 months, bringing the metal closer to government forecasts.

The bears have a reasonable case that copper will give up more of its rally this year. No commodity price goes up in a straight line forever. A price pullback or consolidation period could be healthy, given the extent of the metal’s gains this year. BULL CASE Three factors suggest copper gains go higher again, after its price gets through that pullback or consolidation process. The first is the global economy. The world could have a rare period next year of rising global economic growth and low inflation. Market fears of higher inflation climbed earlier this year after worrisome US inflation readings. Inflation hawks said COVID was creating supply-chain and labour-market bottlenecks that would drive prices up. Higher interest rates would be needed to cool inflation. Inflation doves said higher prices were transitory – a temporary effect of the pandemic that would unwind as the global economy adapted. So far, the doves are right. Certainly, central banks worldwide seem in little hurry to lift interest rates to stem future inflation. The medium-term (one to three years) outlook for copper – based on supply

limitations – is the metal’s strongest argument. Copper bulls often point to rising copper demand from renewable energy and other industries. But the real story is constrained new supply in copper. Low copper prices for much of the previous decade made it uneconomical for many producers to bring on new copper supply. Uncertainty over the sustainability of China’s high economic growth and its commodity demand was another headwind for copper supply. Lately, the pandemic has created logistical constraints for miners to develop new copper supply, or open current projects to schedule, particularly in developing nations hit hard by COVID. Sourcing labour, equipment and regulatory approval has been harder during the pandemic. Nobody doubts copper has strong prospects in a world hurtling towards renewable energies. But the metal has become harder to find and mine. Copper projects are taking longer to be completed. Producers can’t just flick a switch and bring on new supply, despite the higher copper price. Labour-market issues and sovereign risks are other considerations. Last year, thousands of workers at China

–7–

T H E F E AT H E R S T O N E R E P O R T

Forecasters are at odds about the future of copper prices.

Molybdenum’s Tenke Fungurume Mining copper and cobalt mine in the Democratic Republic of Congo successfully went on strike for more pay. In August 2021, workers at two of Chile’s largest copper mines went on strike over pay disputes. Against that, management at Chile’s Escondido copper mine – the world’s largest – approved a new pay deal for workers, averting a strike. In Peru, a strike by transport workers caused shipment delays to copper concentrates. As often happens during commodity booms, workers in developing nations took industrial action to get more pay. Chile and Peru account for about 40

per cent of global copper production. Peru had an election this year and Chile’s is in November, creating more uncertainty. Governments, too, want a higher slice of mining profits. Chile’s Copper Royalty bill cleared another approval hurdle in September. If passed in the lower house of Chile’s parliament, the bill (in its current form) would create the heaviest tax burden among major copper nations. Taken together, strikes, higher government royalties and delays in bringing on new copper supply could create supply constraints that take years to unwind. And offset weaker copper demand from China, if that occurs, over the next few years.

L O N G -T E R M F U N DA M E N TA L S Copper has an excellent long-term (three to five years) story as investment in renewable energy soars. Total confirmed investment in renewable assets was $US1.85 trillion ($2.39 trillion) globally in February 2021, noted Credit Suisse. This could hurtle towards $US4 trillion if US President Joe Biden’s proposed Green New Deal stimulus package is approved. As governments and industry (in more countries) move to decarbonise their economy by 2050, demand for copper should rise, given its use in renewables. Copper is used in electric vehicles (EVs), battery storage, wind turbines, solar panels and other green technologies. Metals forecaster CRU says COVID is accelerating the transition towards copperintensive sustainable energy sources and solutions. It says cathode demand from EVs and renewables should grow by more 15 per cent and exceed one million tonnes for the first time in 2021. But even that is only around five per cent of the total market. On balance, copper might have a challenging 12 months (compared to its previous price high) as the market digests its recent gains. But the metal’s mediumand long-term outlooks are bright amid supply constraints and rising copper demand in renewables. Prospective investors could consider using any short-term weakness in the copper price (if it continues) to increase their portfolio exposure to ASX-listed copper producers like OZ Minerals, Sandfire Resources, Aeris Resources, Hot Chili and Cyprium Metals.

The region around Mt Isa continues to be a significant supplier of copper.

–8–

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F E AT U R E D

— ANALYSIS — WITH REGINA MEANI

Australia’s bold lithium moves look set to pay off. LITHIUM IS MINED from three types of deposits: brine deposits, Pegmatite lithium and sedimentary (hard rock) deposits, with the majority of the world’s lithium hard rock mines found in Australia. It is a silver-white light metal and the prices below are based on the spot prices for battery grade lithium carbonate, 99.5 per cent Li2CO3 min traded in China. Lithium hydroxide is increasingly used in batteries for electrical vehicles and mobile phones. It is also used in breathing gas purification systems for spacecraft, submarines and in rebreathers to remove carbon dioxide from exhaled gas by producing lithium carbonate and water. Among its other uses are in ceramics and cement and to alkalise the reactor coolant in pressurised water reactors for corrosion. Lithium hydroxide is produced from a chemical reaction between lithium carbonate and calcium hydroxide.

– 10 –

The largest lithium producers are Australia, Chile, Argentina and China, while the biggest lithium importers are China, Japan, South Korea and the United States. In mid-2020 the downward trend from 2018, in lithium prices, was broken and the price based around Yuan (CNY) 40,000 before establishing a new upward path that saw the price more than double in less than 12 months (see price graph below). Liontown Resouces (ASX: LTR) is an Australian explorer and developer calling itself “A next generation lithium producer.” The company has four wholly-owned battery metal projects with its flagship Kathleen Valley lithium-tantalum project in Western Australia, 680 kilometres north-east of Perth. Its second hard-rock lithium discovery in Western Australia is the Buldania project located in the Eastern Goldfields province. The share price for Liontown (top, right) has led a volatile path. Forming a top in

2007, the price fell precipitously to a low of 0.7 cents in late 2008. A “V” reversal formed spurring a recovery to 10.3 cents in September 2010 where divergent momentum halted the advance and saw the price fall into a protracted decline finally locating a triple turning point at 0.4 cents in AugustSeptember 2015. A broad and deep reversal phase ensued with the first stage completed in May 2019, spurring a strong upward path. The upswing was interrupted in mid2019 with a significant pullback which acted to expand the base through until September 2020. Since then, the price has undertaken an accelerated climb achieving a price objective to 50 cents in March this year where a brief pause consolidated the upswing to push higher in June to surpass $1.00. The 100 per cent gain for the stock is in line with the lithium price move but taken from its starting point back in May 2019 at five cents, the price has multiplied 19 times over the time period. As the price continues to stretch higher, so too is momentum, suggesting that the advance will be interrupted with pause/ pullback actions before achieving all of its objectives. Along the upward path the price has objectives to around $1.60, then $2.00 and $2.50. At the time of writing in early September, support is located around 85 cents and then more importantly at 70 cents. A penetration of this level could signal a deeper pullback phase was underway and buying opportunities for the longer term. Core Lithium (ASX: CXO) is developing one of Australia’s most capital-efficient and lowest-cost spodumene lithium projects, the Finniss lithium project, located near

AUSTRALIAN RESOURCES & INVESTMENT

Darwin Port in the Northern Territory of Australia. Its location is beneficial as it boasts the best supporting infrastructure and logistics chain to Asia, the major importers of lithium, of any Australian lithium project. Following a similar style volatility to the Liontown price movements, the price for Core (below, left) developed a deep and expanded base between 2011 through to December 2020. The depth and breadth of the phase suggests significant upward potential for the stock. In its completion of the base and breakaway in December/January the price spiralled from a take-off point at 4.8 cents to halt at 42 cents on January 29 after experiencing a gain of over seven times. In response to the steepness and magnitude of the rise, highlighted by extremely overbought conditions, the price corrected to 17.5 cents by March this year. At this level the price had achieved a 60 per cent correction of the previous move accompanied by a rebooted momentum.

Following the minor reversal and climb back to 29 cents by mid-April the price began oscillating sideways in line with the lithium price and keeping with this to then breakaway and push to a new high at 43.5 cents on August 11. Hitting into resistance lines drawn from late 2020, the price dropped back to support in another corrective phase which, may continue to influence the price over the short to medium term. With support located around 30 cents and then around 25 cents with a drop through 21 cents signalling a more serious delay to the upward path. Resistance to the upward path would be found in the 50-60 cents range and once through would clear the way towards $1.00 and potentially beyond. Pilbara Minerals (ASX:PLS) takes its name from its location in the resourcerich Pilbara region of Western Australia and owns the world’s largest, independent hard-rock lithium operation. The Pilgangoora operation produces a spodumene and tantalite concentrate.

The scale and quality of the operation has brought together a consortium of highquality, global partners, including Ganfeng Lithium, General Lithium, Great Wall Motor Company, POSCO, CATL and Yibin Tianyi. The share price history for Pilbara Minerals (below, right) resembles a rollercoaster ride. The price trended down between 2010 and 2013 when it reached a low and turning point at 0.7 cents in October of that year. Spiking into reversal, the price consolidated a base which empowered it to rise to 81.1 cents in May 2016 where divergent momentum saw the price pullback over several months before finding support in mid-2017 to drive higher. Reaching to a new high in late 2017early 2018 at $1.165 the price halted again in momentum divergence and the price toppled into another pullback which escalated and saw the price plunge to a spike low at 12.6 cents in March 2020. The action formed part of a head and shoulders reversal triggering a price spiral in November 2020. Rising from the completed base at 42 cents to encounter a parallel barrier at $1.468 by January 22 this year, with the rebuff producing a corrective phase acting as a pause in the steep upward path. The price broke away in June pulsing higher to $2.46 in August and the next parallel barrier. The price entered another pause phase which may develop over the short to medium term as the price reboots for its next push higher. Keeping with the volatile nature of the price movements, the main support lies around $1.75 with a drop through this level suggesting a more extended corrective phase. Once the upswing resumes, it will retackle the $2.45-50 resistance zone to move beyond towards $3.00 and potentially much higher.

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F E AT U R E D

WA miners flourish in Deloitte Index The 2021 Deloitte WA Index paints a strong picture of the economic gains achieved by the state’s mining companies. Nickolas Zakharia writes.

mid a clean energy technology boom and surging iron ore demand, Western Australia’s mining sector is staying ahead of the curb when it comes to economic viability. Despite the looming issues of labour shortages and interstate border closures, the state’s mining sector has continued to drive up profits and company value. The 2021 Deloitte WA Index reveals a promising situation for the state. According to the index, market capitalisation of Western Australian-listed entities grew by 36 per cent to $239.9 billion in the 2020-21 financial year. Companies listed on the index outperformed the broader ASX All Ordinaries, US S&P 500, FTSE 100 and the Nikkei 225. This was largely underpinned by an influx of investment in Western Australianbased resources companies. Bullish demand of metals such as copper and iron ore have driven up the value of junior and mid-tier mining companies. “What we’re seeing is a broad brushed return of commodity price strength,” Deloitte Western Australia assurance and advisory partner Dave Andrews tells Australian Resources & Investment. “We had a pretty sharp retraction globally as a result of initial COVID restrictions as people have moved forward and worked out how to be productive. “People had to get on with it, which means resurgence in the need for energy. This has resulted in very positive price moves in thermal coal, LNG (liquid natural gas) and also a renewed focus on clean energy.” According to the index, Venturex Resources grew its market capitalisation by 2722 per cent to $465.99 million in the year ended June 2021. In July, former Northern Star chairman Bill Beament took the reins to recapitalise Venturex as executive director.

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The Deloitte WA Index outperformed other global financial markets in the 2020-21 financial year.

Beament played a role in the $16 billion merger between Northern Star Resources and Saracen Mineral Holdings, a deal completed at the start of this year that also marked his departure from the company. Venturex is ranked 49 on the index, climbing all the way from 334 in the previous year. The company is developing the Sulphur Springs copper-zinc project in Western Australia, with the Department of Mines, Industry Regulation and Safety (DMIRS) approving its project management plan for the site. Copper has reached historic highs on the London Metal Exchange this year as demand for the red metal steadily rises alongside a ramp up of clean energy technologies. “Copper is one of several key ingredients that we need for our clean energy future,” Andrews says. “Anything to do with the creation of electric vehicle (EV) transmission lines, batteries and storage technology – copper a key commodity player in that clean energy dynamic.” “Given the inability for that supply response to come on quick enough to meet that demand in the next couple of years, there’s positive news to come for copper.” Iron ore demand has also continued its upwards trajectory, helping mining giant

Fortescue Metals Group top the index with a market cap of $71.8 billion along the way, marking a 68.5 per cent increase. Fortescue and Wesfarmers (ranked second) make up close to half of the WA Index’s total value at $140 billion. In Fortescue’s case, the world’s focus on Australia as iron ore’s top player has led to record production from some of the country’s largest producers. This has been met with record prices as the iron ore price grew by 112 per cent to $US216 ($292) per tonne in this year’s index. Most demand comes from the Pilbara region of Western Australia, which is home to many of the country’s largest iron ore operations. Australia’s surging iron ore demand follows tailings dam-related issues in Brazil that have clipped the wings of Vale, the world’s leading iron ore producer outside of Australia, and its ability to reach production targets. “Vale has had challenges to deal with in recent times and that has made Australian iron ore producers very well placed to fulfil that supply-side gap,” Andrews says. “Will that continue? Who knows. Vale is a big organisation and obviously working to get back into production. “Australia is certainly well-placed right now and very-well placed to supply

AUSTRALIAN RESOURCES & INVESTMENT

iron ore globally.” China remains Australia’s largest iron ore customer despite ongoing tensions between the two nations. Political issues aside, Australian iron ore producers are in a crucial position for China. “The risk of having all your eggs in one basket is on everyone’s mind and on everyone’s agenda,” Andrews says. “China is still in a position of needing what we (Australia) have, so we can’t lose sight of that. “We still have very high-quality iron ore and battery related minerals and china needs to source significant volumes from somewhere outside of their country. “Given our proximity in a shipping destination point of view, Australia will be continued to be well-placed to supply that market.” Western Australia’s supply of critical minerals has also seen more attention towards lithium mining. Piedmont Lithium, which is based in Western Australia, has watched its market capitalisation explode by 1732 per cent. This marks the highest increase among the index’s top 20 companies The lithium producer’s value rose from $88 million to $1.6 billion after the company signed a sales agreement with Tesla, the world’s largest EV maker. The company raised $159 million in the 2020-21 financial year with its

Perth, the corporate home to Western Australia’s leading resources companies.

namesake spodumene project located in North Carolina. According to Andrews, the critical minerals boom has also benefitted lithium explorers. The Australian Government’s Critical Minerals Strategy is an example of how juniors in Western Australia are being backed, through the promotion of investment, incentives and connecting critical minerals projects with infrastructure development. Critical minerals company Liontown Resources scored the second highest market capitalisation increase in the index’s top 20, growing by 761 per cent to $1.5 billion. The company’s flagship Kathleen Valley lithium project in Western Australia led to the initial upswing in value, due to a pre-

WA’ S T O P 2 0 L I S T E D C O M PA N I E S – AT J U N E 3 0 2 0 2 1 This year

Last year

Company name

Mkt Cap Jun 30 21

Mkt Cap Jun 30 20

Fortescue Metals Group

71,824.85

42,626.62

Wesfarmers

67,009.96

50,830.05

Woodside Petroleum

21,401.11

20,661.87

South32

13,630.49

9,803.80

Northern Star Resources

11,380.85

9,888.42

Mineral Resources

10,134.78

3,975.80

IGO

5,777.95

2,877.24

Lynas Corporation

5,145.16

1,352.97

Pilbara Minerals

4,203.52

556.18

Iluka Resources

3,867.26

3,606.44

BWP Trust

2,736.56

2,460.33

Chalice Mining

2,573.68

302.02

Galaxy Resources

1,855.81

317.35

Perseus Mining

1,790.63

1,530.15

Regis Resources

1,779.49

2,652.70

103

Piedmont Lithium

1,613.96

88.00

De Grey Mining

1,596.14

1,061.13

Liontown Resources

1,546.24

179.68

Silver Lake Resources

1,463.42

1,874.07

Ramelius Resources

1,379.76

1,603.85

Sourced from Deloitte.

The value of many of WA’s top 20 resources companies has surged.

feasibility study increasing the mine life to 40 years with a two-million-tonne per year processing capacity. Liontown’s market capitalisation further increased through the demerger and initial public offering of the Moora and Koojan joint ventures in Western Australia. “We’ve got quite a lot of critical minerals explorers and producers that are based in WA,” Andrews says. “We’re fortunate in WA that we’re a bit of an incubator of opportune exploration companies generally. “What we’ve seen is the price rises in some of those critical minerals this year in particular have really seen a resurgence of some of these junior exploration companies that are seeing really good support from investors internationally and locally.” Andrews expects the next index to show similar performance from WAlisted companies. For iron ore, a further ramp up of international construction activity is likely to maintain stable steel demand. “With that demand there, challenges coming out of other countries Australia is well placed to supply the global iron ore market we’re going to see a reasonably high iron ore price,” Andrews says. “What you’ll also see is a continued strong clean energy metals thematic. There’s more buyers of lithium and the market is opening up. “Supply is there but it is not responding as the same rate as demand so I think that will continue to put upward pressure on prices.” As Western Australia’s mining companies continue to ride the wave of higher prices and demand, Australia’s economy is put in good stead off the back of their success.

– 13 –

F E AT U R E D

Copper prices hit a record high in May this year.

COPPER GOES GREEN The copper market has entered record territory this year as supply chains double down on its importance in the clean energy revolution. Nickolas Zakharia writes.

ero-emission technologies are hailed for their place in a decarbonised and sustainable future. But it’s equally important for supply chains to focus on sustainable sourcing of the resources required to create electric vehicles (EVs) and energy storage solutions to appease the demands of investors. Copper has long been recognised as a key part of the world’s clean energy revolution and mining companies have this year started to see what these market conditions will look like with prices at new heights. At the same time, copper mining and exploration activity is increasing in Australia, which ranks third in the world for copper reserves, according to US Geological Survey data. Copper exports from Australia brought in record revenues of $10.4 billion last year and forecasts point to that figure rising in the coming years. The dawn of EV production continues to ramp up much to the delight of copper miners, as the base metal is an important

– 14 –

ingredient for EV motors, batteries, inverters, wiring and charging stations. Copper wire and cable account for around half of global copper production, according to Geoscience Australia. Bloomberg New Energy Finance’s Electric Vehicle Outlook 2021 report forecasts that EV sales will erupt from 3.1 million in 2020 to 14 million in 2025. The anticipation of a green frenzy was reflected by copper reaching a record high of $US10,724.50 ($14,528) per tonne on the London Metal Exchange (LME) in May. While prices have simmered to around $US9000 per tonne (at the time of writing), they remain significantly higher than the initial decline witnessed in the wake of the COVID-19 pandemic. GOING SOUTH South Australia is an essential jurisdiction for Australia’s copper output with major operations including BHP’s Olympic Dam and OZ Minerals’ Carrapateena mines. The state hosts more than half of

Australia’s copper resources, with a bevy of junior explorers searching for its next deposits. Hillgrove Resources, which previously operated the currently under care and maintenance Kanmantoo copper-gold open pit mine, is one of these juniors. The company last year shifted its focus to exploration as it advances a strategy to expand Kamantoo, with attention shifting to a new underground prospect at the site. Coda Minerals, another junior operating in the state, this year enjoyed what it described as a transformational June quarter following ramp up of exploration at the Elizabeth Creek copper project in South Australia, alongside joint venture partner Torrens Mining. To support the state’s copper developments, the Government of South Australia’s Copper to the World Conference gives stakeholders further insight into the local and global copper industry. Bloomberg Intelligence senior analyst of metals and mining Yi Zhu says a super

AUSTR ALIAN RESOURCES & INVESTMENT

Copper plays a key part in the manufacture of EV components.

cycle for metals, including copper, has not yet occurred. However, market conditions remain positive. “We do think there is a bullish market for all metals, but there may not be a super cycle equally for the metals,” Zhu, speaking at this year’s Copper to the World, says. “On the demand side, metals lack post-China super cycle drivers, and no other country can take the torch from China yet. “Countries are ramping up supply after disruptions caused by COVID. We think the low to negative interest rate environment and expanding global money supply has been one of the key reasons for driving up metals prices. (This) will continue to support metal prices until the inflation reaches an alarming level and prompts central banks to tighten – then metal prices could cool. “Carbon neutrality, which has been widely accepted, and in turn has provided a very strong incremental demand for certain metals and carbon emissions, is also on the agenda for many exchanges.” The last metals super cycle, which took place from 2000 to 2014, was driven by China’s urbanisation and industrialisation growth. According to Zhu, China’s annual demand for the world’s metals increased to 50 per cent from 15 to 20 per cent in 2000. “As China’s growth model shifts from investment centre to consumption driven, the demand growth for metals will slow down and the intensity of metals use will ultimately decline,” she says. Yet the rise of green technology is expected to sustain future copper supply.

The vulnerability and possible decline of crude oil in the EV revolution could see copper consumption simultaneously increase. “We think doctor copper can get capital boost at oil’s expense, as crude oil is vulnerable to EVs,” Zhu says. “Fuel demand may head for a structural decline while copper consumption could surge as battery power infrastructure develops. “Capital could switch from oil-related assets to copper-related assets. The copperoil ratio has traded above the average resistance level before the pandemic, which implies investor anticipation of a possible post-pandemic shift in both commodities’ price patterns.” Zhu explains that a lack of new copper mine developments has also stalled supply for the red metal due to a focus on shareholder returns rather than new capacity. “Investment in new mines by the top 40 miners globally dropped to a record low in 2016 and hasn’t recovered significantly,” she says. “Even though capex will pick up this year and going forward, greenfield projects may ease copper deficits in 2022 to 2025 and our analysis shows increasing technical complexity and approval delays could lead to … shovel ready projects in 2025 to 2030. “Rising demand for new power generation capacity which may be wind and solar along with EVs, should spur more intensive consumption of copper and we estimate copper demand in clean energy technologies may double in 2030 versus 2020 levels.”

MASTERING AN ESGINFLUENCED FUTURE Mounting environmental, social and governance (ESG) pressure has also made mining companies rethink their approach to operational strategies. Outside of increasing demand for copper, ESG compliance has become a necessity for mining companies to abide by to maintain strong investor interest. ESG requirements factor in non-financial factors, including how companies respond to climate change, worker treatment, innovation and supply chain management. This is making mining companies rethink their operating methodology to satisfy stakeholders through their supply chains. OZ Minerals, one of Australia’s largest copper miners, has adopted a business model that creates value for multiple stakeholder groups, including shareholders. A key part of its ESG strategy is its focus on decarbonising operations through the trial of mining EVs. “Value creation is personified for us through employees, communities, government, shareholders (and) suppliers,” OZ Minerals general manager transformation and readiness Katie Hulmes, presenting at Copper to the World, explains. “There are people out there that expect something of the mining sector of copper producers, large producers and small producers, explorers, big business, small business – it doesn’t matter we’re all in this together we need to consider what those expectations are of us as we make our choices.”

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F E AT U R E D

OZ Minerals aims to phase out scope one greenhouse gas emissions from its mining operations as part of transition to net-zero emissions by 2050. The company has encouraged industry collaboration to push mining innovation in areas including decarbonisation, after signing an agreement in April to trial Safescape’s electric vehicles at the Prominent Hill copper-gold mine. “When you look along the technology development spectrum, you will see there are many different actors and many different roles for people to play,” Hulmes says. “To find a way to seamlessly bring those together and leverage the knowledge for each other is something we’re striving to do, but boy are we learning how hard that truly is. “An example for us around how we seek perspective and collaborate is when we’re working on a material piece of work, we look to create diverse teams called stakeholder teams and we encourage our people to put representatives from outside of our organisations onto those teams to bring perspective and multiple lenses to what we deliver. “We want to access innovation, foster deep collaboration and drive change.”

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Image: OZ Minerals.

The Carrapateena site.

T H E N E X T G E N E R AT I O N OF DEPOSITS BHP, which has already adopted autonomous haulage options at its coal and iron ore operations, is now considering converting its Escondida and Spence copper mines to the technology. Zero-emissions technology is only one pillar of a miner’s ESG requirements, with growing incentive to deliver positive outcomes for communities. BHP is also consulting with Traditional Owners before proceeding with its Western Australian mine approvals, to build stronger community relations. The company reached an agreement with First Nations Heritage Protection Alliance to enhance the voices of First Nations peoples regarding industry heritage protection reforms. With focus on both copper development and ESG factors, BHP aims to develop its Oak Dam copper project in South Australia in the coming years. Oak Dam is an iron oxide-copper-gold mineral system 65 kilometres from the Olympic Dam operation, which is the largest copper producing mine in Australia. BHP is confident it will find a new copper deposit in the region, with initial drilling first

undertaken by Western Mining in 1976. BHP manager, Oak Dam Sam Hewitt says the project has a dual focus, including delivering the next phase of resource definition drilling. The company will also look to make magnitude, technical and economic discoveries, which will help it understand the value of Oak Dam’s copper deposit. “We recommenced deep directional drilling in May this year (and) our strategy is to execute a staged ramp up for what will become a significant drilling program,” Hewitt, speaking at Copper to the World, says. “The underlying intent (is) to bring forward resource knowledge that can have a next phase strategy and investment decision (made) sooner rather than later.” In 2018, BHP intersected mineralisation at Oak Dam of 3 per cent copper at 4225 metres, a return that represents the potential of the asset. More than 41,000 metres of core have been drilled since, which confirms iron-oxidecopper-gold-ore deposits. “This is why we’re so excited the methodology applied by the metals exploration team to discover a copper deposit of such significance,” Hewitt says. “On the premise of ongoing positive

AUSTRALIAN RESOURCES & INVESTMENT

RESPONSIBLE COPPER INVESTMENT The LME is also pushing for responsible and sustainable copper supply in response to demands trickling down the supply chain. LME chief sustainability officer Georgina Hallett says this has been amplified with the LME’s push for responsible sourcing requirements. “(We) need to make sure that the industry remains fit for the future and that we are ready to meet new challenges as they arise, and for us at the LME a huge amount of focus on that topic has been around the sustainability space,” Hallett says. “Consumers were beginning to get concerned that at some point in the future they were going to have to say to their traders that they couldn’t trade copper and metal more broadly if they couldn’t provide evidence it was sourced responsibly.” The LME operates as a seller’s market, which means investors do not choose which piece of metal they receive. It is instead randomly allocated through the LME’s clearing process. This, in turn, makes the LME responsible to ensure the brand meets globally accepted standards for responsible sourcing and sustainable production. Hallet says the shift to net zero emissions would require a large intake of metals, including copper, but weak ESG standards could mar this goal. “There’s a hugely fantastic narrative for copper here, we just need to make sure it is sourced sustainably to ensure that value isn’t undermined,” she says. “We are conscious that there is always more than one way to achieve a certain (objective) and we wanted to provide as many ways as possible and as many tools, platforms, contracts and so on, so that the market could choose the route that works (best).” EV manufacturers are also being pressured

by ESG requirements to ensure they have a responsible supply chain, which coincides with the platforms the LME is pushing. This is making it necessary for downstream companies to be transparent in how their raw materials are sourced. “The regulations, requirements and strategy of these car companies is moving to incorporate climate change and ESG performance as a fundamental part of how they do business,” RCS Global Group founder and chief executive officer for business strategy Harrison Mitchell says. “The obligations are going to the downstream companies and that in turn is obviously going to be pushed down the supply chain because that is what the regulations are requiring.” According to Mitchell, the Organisation for Economic Co-operation and Development (OECD)’s due diligence guidance encourages responsible production and underpins responsibly sourced copper. The OECD is an international organisation that creates policies alongside governments, policy makers and citizens. “It does form the basis of, for example,

the LME responsible sourcing requirements,” Mitchell says. “(Companies) tend to underestimate the requirements taking to actually develop these procedures or management systems … if you’re starting to think about this now or needing to adopt standards for certain regulations, I would start sooner rather than later.” The Copper Mark provides another major assurance framework that promotes responsible production practices specifically for the red metal. Its criteria focus on issues including legal compliance, child labour, forced labour, greenhouse gas emissions, environmental risk management and energy consumption. “It’s not just regulators that are you know placing pressure on these companies. There is going to be a report later this year by Amnesty International (highlighting) companies in the battery supply chain and the EV supply chain on their performance in sustainability,” Mitchell continues. “That’s something which will likely create significant pressure on the industry to shore up there our performance their strategy towards ESG performance.”

Image: BHP.

results, current phase drilling objectives are centred on testing mineralisation continuity and true width of the high-grade zone.” For the market to grasp complete value from Oak Dam, BHP will need to deliver strongly on its ESG requirements. “There is potential for us to develop and deliver a modern mining operation from the outset that is an example of BHP’s values of leading sustainability, being environmentally responsible and supporting our communities, leveraging technology that improves safety outcomes, reducing waste and delivering material productivity uplift,” Hewitt says.

Olympic Dam is the largest copper deposit in Australia.

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F E AT U R E D

BHP and Woodside to merge: What’s next? In August, BHP Petroleum and Woodside Petroleum agreed to consolidate their oil and gas portfolios in a deal that is set to create one of the largest independent energy companies globally.

he oil and gas industry is seeing a significant shake-up in 2021 with merger and acquisition (M&A) deals impacting major Australian-based companies. Fresh off Santos and Oil Search announcing their intentions to join forces, BHP and Woodside agreed to merge their entire petroleum businesses. The move set up the creation of a global top 10 independent energy company based in Australia valued at around $40 billion, with BHP looking to streamline its resources portfolio to achieve net-zero emissions in the coming decades. “Having made the decision to separate these parts of our business, we believe a merger of BHP Petroleum with Woodside delivers the most value for shareholders,” BHP chief executive officer Mike Henry, speaking during an August 2021 earnings call, says. “Oil and gas provide more than half of the world’s primary energy today. They remain essential to the processes and products that support everyday life. “And high-quality assets and projects are expected to continue to generate attractive returns for the next decade and likely beyond. BHP’s Escondida copper mine in Chile.

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“The question is not whether these resources have a role, but rather how to position them to deliver the best shareholder and societal outcomes during the energy transition and today’s announcement will achieve that.” The merged company is expected to deliver around 200 million barrels of oil equivalent per year. Under the merger, Woodside would consolidate BHP’s oil operations in the Gulf of Mexico, including its Shenzi North project, which it committed $US544 million ($740.6 million) in capital to in August. The merged entity will be 52 per cent owned by existing Woodside shareholders and 48 per cent owned by existing BHP shareholders. On the mining side, BHP has been working towards it net-zero emissions goal across its global operations. Katana Asset Management portfolio manager Romano Sala Tenna says the merger will allow BHP to streamline its portfolio. “From BHP shareholders point of view, it’s an absolute no-brainer,” he tells Australian Resources & Investment.

“It is a good transaction because it enables them to act out their ESG (environmental, social and governance) preferences in a way it enables them to get benefits from the assets, but also to weight up or down, or neutral, according to how they see the ESG issues related to LNG (liquefied natural gas) and petroleum. “From a BHP corporate point of view, it is a brave transaction because this is second biggest pillar through the cycle and they’ve effectively decided to pass this off and pivot to new world metals, as opposed to the alternative (which) would have been to use cash flows and margins from these assets to fund that pivot over a more gradual timeframe.” The move to new world commodities was shown when BHP committed $US5.7 billion to fund its Jansen stage one potash project in Canada in August, an investment Henry says is part of a strategy of growing the company’s exposure to “future facing commodities”. Copper is also expected to play a key part in the world’s clean energy technology revolution due to its importance in the manufacturing process of technologies

Image: Woodside.

AUSTRALIAN RESOURCES & INVESTMENT

such as electric vehicles. For BHP, its Escondida mine in Chile and Olympic Dam mine in South Australia will be central to meet growing demand for the base metal. Sala Tenna says oil and gas companies are likely to push for the lower carbon emissions from the energy source compared with coal. “What we’re just starting to see is the first signs of companies such as Woodside fighting back in terms of explaining first that all oils aren’t oils,” he says. “LNG is substantially cleaner burning

than coal, it can be turned on and off with the flick of a switch, so it works perfectly with renewables. “The big players will start to push out and get better investor relations in place, to understand the role it has to play and also they’ll then be able to distinguish between LNG and bitumen grade crude.” BHP has high hopes for LNG demand in the future. Longer term, the company expects the commodity to offer a combination of systematic base decline and an attractive demand trajectory, with new supply likely

to be required to balance the market in the middle of this decade, or slightly later. “However, gas resource is currently abundant and liquefaction infrastructure comes with large upfront costs and extended pay backs,” the company’s 2021 annual report states. “Within global gas, LNG is expected to gain share. Against this backdrop, LNG assets advantaged by their proximity to existing infrastructure or customers, or both, in addition to being at the lower end of the emissions intensity curve, are expected to

Image: BHP.

Woodside’s Pluto LNG plant in Karratha.

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F E AT U R E D

BHP’s petroleum portfolio will be combined with Woodside.

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of corporate processes, supporting the petroleum capabilities of both companies, optimising exploration expenditure and greater financial resilience. The two companies are expecting to reel in more than $US8 billion in revenue as part of the merger. “Put simply, BHP’s global petroleum business will be merged with Woodside, creating a larger, more resilient Woodside with the financial strength to fund growth and thrive through the energy transition,” Woodside chairman Richard Goyder says. “The Woodside board believes this will be positive for all our stakeholders as it brings together our complementary assets and capabilities, which will provide a strong base to deliver enduring shareholder returns. “Importantly, Woodside’s existing emissions reduction targets to reduce net emissions by 15 per cent by 2025 and 30 per cent by 2030 will be extended to the enlarged portfolio.” While its petroleum outlook does not factor in its merger with Woodside, BHP forecasts between 99 and 106 million barrels of oil equivalent in the 2021-22 financial year, with petroleum exploration expenditure within the 2021-22 financial year expected to be around $US2.3 billion. Sala Tenna believes analysts would not have expected BHP to merge with Woodside 12 to 18 months ago, but the rapid movement of ESG requirements has accelerated the company’s focus on metals used in clean energy. According to BHP chair Ken MacKenzie, this focus consolidates the company’s strategic and climate goals.

“Investing in future facing commodities creates great opportunities for BHP – it means our strategic goals align with our climate goals – but it also creates a challenge,” MacKenzie says in BHP’s annual report. “The world needs to increase production of commodities that support the transition and do so ever more sustainably. “BHP has made progress against our greenhouse gas emissions reductions targets and goals, but we intend to continue to challenge ourselves to reduce our own emissions, and work in partnership with our customers and suppliers to reduce emissions along the value chain.” Despite its focus on ESG requirements and decarbonisation, BHP has remained committed to its energy coal assets, including the Mt Arthur coal mine in New South Wales. BHP anticipates uncertainty from ongoing tensions between Australia and China, yet expects coal will continue to be used for decades to come. “I think the ESG landscape has moved very rapidly and BHP has made the decision to be at the forefront of that,” Sala Tenna says. “From a Woodside perspective, it’s a very good transaction. “Woodside has issued in the vicinity of one billion shares that means there are a per cent of people who get those shares with BHP will sell so that’s going to create a short to medium term overhang in the marketplace “But medium to longer term, this is a very good transaction for Woodside. It removes all their funding uncertainty through the cashflow that comes out of these assets.” The merger is expected to be finalised during the second quarter of 2022.

Image: BHP.

remain attractive.” Wood Mackenzie research director Andrew Harwood says the M&A activity in the oil and gas sector demonstrates a commitment to long-term sustainable operations amid the clean energy boom. “An exit from its petroleum business has been long rumoured for BHP, and as it faces rising pressure from the energy transition, it would seem that the mining conglomerate has determined now to be the optimum moment to achieve maximum value,” Harwood says. “Following hot on the heels of Santos’ proposed merger with Oil Search, a WoodsideBHP combination is further evidence of oil and gas operators seeking solace from longer term uncertainty through scale, and doubling down on long-term, cash-generative, resilient resource themes. “Strong cash flow from BHP’s (Gulf of Mexico) assets over the next decade will provide steady shareholder returns while supporting planned investment across the wider business in LNG growth and new energy opportunities.” BHP earned $US3.9 billion in revenue during the 2020-21 financial year from its petroleum business, which was lower than the $US4.07 billion in the year prior. Woodside also expects to benefit from the merger with BHP by doubling its production and strengthening its position to deliver shareholder returns. As Australia’s largest natural gas producer, Woodside will also capitalise on BHP’s LNG assets globally. BHP and Woodside are expecting annual synergies of $US400 million to arise from the merger, including an optimisation

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GOLD

THE PAST, PRESENT AND FUTURE OF GOLD Gold celebrated the 50th anniversary of its split from the US dollar in August. The Perth Mint explains why the precious metal remains indispensable today.

Gold bars from The Perth Mint.

t has been half a century since United States President Richard Nixon cut the ropes between gold and the US dollar, following rising inflation and a decline in gold reserves. In what was initially a temporary suspension, gold has remained a separate investment asset from the US dollar throughout this time. Gold has ballooned from below $US40 ($54) per troy ounce to above $US1700 per troy ounce in the five decades since the split as it continues to be viewed as a safehaven investment. The Perth Mint is the third and only branch of Britain’s Royal Mint still in

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operation, being one of Western Australia’s largest exporters, shipping around $18 billion of gold and silver bullion, and collectable coins. The Perth Mint has maintained a strong relationship with mining companies and consumers alike, overseeing the entire precious metal value chain. “Today we refine the vast majority of Australia’s newly mined gold,” Perth Mint chief sustainability officer Stephanie Ward tells Australian Resources & Investment. “As the needs of our mining customers have changed over time, so have we, and today we continue to provide the safest, lowest risk refining services available.

“Our world-class assay laboratory ensures that our customers receive the most accurate and timely outturn for their metal.” Despite Australian gold output topping the global production rankings, the declining gold price tells a different story. Investors scrambled to gold as a safe haven at the onset of the COVID-19 pandemic, causing the price to rocket into record territory of $US2067.15 per ounce in August 2020. It has since dropped to below $US1800 per ounce (at the time of writing). Perth Mint manager listed products and investment research, Jordan Eliseo, says there are multiple factors contributing to the lower price, including a momentum exhaustion,

AUSTR ALIAN RESOURCES & INVESTMENT

Perth Mint chief sustainability officer Stephanie Ward.

inflation and the strength in equity markets. “All markets just need time to work off excess either to the downside or upside. A correction in gold is not unexpected given how far it rallied in August 2020,” Eliseo says. The United States Consumer Price Index rose from 1.31 per cent to 5.4 per cent between August 2020 and July 2021, yet gold has dropped significantly during this period. Eliseo says the market believes the current inflation spike is transitory and will decline in the coming year, which is leading a retraction in the gold price. This is due to the market’s belief that inflation will be transitory due to a reduction in commodity price recoveries, stimulus spending and supply chain bottlenecks. “The idea is that there’s quite significant supply chain bottlenecks around the global economy right now, which makes sense because we had this huge shock where we had to put the global economy into a coma when COVID hit last year,” Eliseo says. “It’s a lot easier to shut an economy down than to reopen it up. So, it’s natural there’d

Perth Mint manager listed products and investment research Jordan Eliseo.

be the bottlenecks in supply chains as that opening occurs and that’s going to contribute to a short-term spike inflation.” With many commodities returning to preCOVID levels, the increase in price appears more pronounced due to last year’s low equity market prices. Eliseo says this has made investors weary that the consumer price index will do the same. “The gap between where inflation currently sits right now and what the markets expectation will be for inflation over next 10 years – it’s basically back to levels we saw in 2007 to 2008 just before the global financial crisis (GFC) hit,” he says. “That’s a very interesting reading of where markets are broadly at and where gold is at as well.” Since 1971, gold has returned about eight per cent per annum in US dollar terms – similar to most developed market currencies, which range between eight to 10 per cent per annum, making it a worthy investment compared with cash and bonds.

The Perth Mint is the third and only branch of Britain’s Royal Mint still in operation.

By continuing to deliver strong returns to investors, gold has been able to weather the storm of several global crises. Eliseo says the NASDAC crash in 2000, the September 11 attack on the World Trade Centre, the 2008 GFC and the COVID-19 pandemic have all demonstrated the importance of gold as a safe-haven investment. “During periods of crisis, gold does tend to see an uptick in buying and increase in demand,” Eliseo says. “Gold is not just a crisis hedge … while it might not go up as much as the share market, it has delivered positive returns in more friendly equity market environments.” The Perth Mint is listed on the ASX, which has allowed investors to access gold investment. By making it easier for people to buy in to gold, this has ensured that the precious metal is both a popular and relevant form of investing. Eliseo says gold has enjoyed a broadly positive period since the GFC, but it is not as bullish as it was in the immediate years following the crash. “We’re in a fairly unconventional space right now. Rates being at or near zero for the better part of 10 or 12 years in large parts of the developed world,” he says. “All of that is supportive of the idea the sentiment to gold is more positive. “The sentiment towards gold (now) is a bit more depressed and nowhere near as exuberant as 12 years ago when we began to see quantitative easing, zero interest rates for the first time, and equities were trading at a much lower price and suffered that enormous crash during the GFC. “People were much more nervous about equity markets than they are today, which by definition on a relative basis means they were more positive to things like gold than perhaps they are today even though the macroenvironment is still very supportive.” Cryptocurrency has emerged as a popular alternative method of investment in recent years. However, it has not shown whether it can offer the same safe-haven investment traits of gold. Eliseo says that because cryptocurrencies are marketed as digital gold, it shows the fortitude and brand recognition of the precious metal. “We’ve got 5000 years’ worth of history that demonstrates golds value and ultimate long-term safe-haven asset. The last 50 years just reinforce that,” Eliseo concludes.

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GOLD

WA GOLD MINING ACTIVITY SNOWBALLS Western Australian gold companies have used this year’s Diggers & Dealers Mining Forum to outline strategies that will grow their resource base.

ig exploration budgets and industrychanging mergers and acquisitions (M&A) have defined the gold industry over the past year. And despite a weaker gold price in 2021, the value of mapping a plan to unlock hidden potential in gold assets has remained front and centre for a large slice of Australia’s mining industry. Australia became the world’s largest gold producer in the first half of the 2021, surpassing China. It remains to be seen if Australia can keep up this pace, with Surbiton Associates director Sandra Close saying China has faced work challenges this year. “It is interesting to look at the amount of money now being spent on gold exploration as a proportion of total mineral exploration expenditure,” Close says. “In 2001, gold exploration comprised around 55 per cent of total mineral exploration expenditure. It fell to only 20 per cent between 2008 and 2014, but has recovered now to around 50 per cent.”

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focusses on Tier 1 assets in Australia and Canada, meeting investor expectations for gold projects to be developed in areas that have fair mining laws and are geologically rich. In July, Evolution bolstered its portfolio with the acquisition of Northern Star Resources’ Kundana assets in Western Australia for $400 million. The Mungari acquisition has cemented Evolution’s footprint in Western Australia, with Klein saying the operation will be transformed into a cornerstone asset for the company. “We now have immediate access to significantly larger volumes of higher-grade material and the opportunity to extract material synergies that were just not available to either ourselves or Northern Star in the absence of this transaction,” Klein says. “The resource grade of the operations we are acquiring is almost three times the resource grade of our existing operation at Munagri; these high-grade ore sources will now be prioritised and will be fed into the mill with priority. “Combining the tenements delivers a

Image: Greatland Gold.

The Havieron project is a joint venture between Newcrest and Greatland Gold.

According to the Australian Bureau of Statistics (ABS), Western Australia continues to grow its gold sector, with sales reaching an all-time high of more than $17 billion in 2020, supported by an average Australian dollar price of more than $2500 per ounce. However, Evolution Mining executive chairman Jake Klein says gold miners have faced challenges since the highs of 2020. “It’s been a tough 12 months for the gold sector with lots of headwinds,” Klein, presenting at the 2021 Diggers & Dealers Mining Forum, says. “Last year at this forum, gold was at an all-time high (as) the world was going to proverbial hell in a handbasket as it grapples to deal with the spread of the pandemic. “This year, we the gold miners are in the doghouse. Even though the pandemic is far from over the markets and metal prices are acting as if it was.” Klein believes the volatile market encourages investors to have exposure to gold as a safe-haven investment. Evolution’s approach to the gold market

AUSTR ALIAN RESOURCES & INVESTMENTS

Companies operating around Kalgoorlie and in the Goldfields in WA remain prolific gold producers.

mineral inventory of 4.6 million ounces, which can be optimised and delivered benefits on day one.” Evolution, which has since processed first ore from Kundana at the Mungari mill, is aiming to produce between 700,000 to 760,000 ounces of gold at an all-in sustaining cost (AISC) of $1220 to $1280 per ounce across its operations this financial year. Western Australia is a hotspot for gold M&A as headlined by Northern Star’s $16 billion merger with Saracen Mineral Holdings. The announcement was made a week before the 2020 Diggers & Dealers Mining Forum before being finalised in February this year. Following the merger, Northern Star has set out to become a two-million-ounce-perannum gold producer as part of a five-year strategic plan. Northern Star’s profits are also now in record territory with $648 million in the 202021 financial year, a result the company backed up with a $0.95 cents per share dividend. More than a year after announcing the merger, Northern Star managing director

We’ve got more than 10 years mine life on current reserve base of 1.2 million ounces which we think has the potential to get a lot bigger

Stuart Tonkin says it has solidified the company’s standing as a major gold producer. “For Northern Star investors, it’s a pretty exciting time with the platform we’ve created,” Tonkin says. “We now hold over 21 million ounces of reserves in gold. We have 56 million ounces in resources, we have a very proven track record of converting those resources and extending our mine lives, and adding and growing reserves and resources in a per share basis.” As the sole owner of the Kalgoorlie Consolidated Gold Mines (KCGM) in Western Australia, Northern Star plans to grow the Super Pit mine by tapping into the Fimiston underground resource. Tonkin says KCGM’s underground potential has been brought to fruition since the acquisition and could lead to further mine-life extensions. “We already have – since ownership in 18 months – four million ounces of inferred resources that were not there at acquisition of the asset,” Tonkin says. “None of this is in our forecast plan

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GOLD

growing profitably to two million ounces so there’s a phenomenal opportunity here at Kalgoorlie and the Super Pit.” While the early signs of the synergies from the Saracen merger are already showing for Northern Star, the company is expecting its full potential will materialise in the coming years. “You will also see us migrating down the cost curve. It needs that capital investment to get the economies to scale, to liberate some of the synergies that we’ve identified in the merged businesses with Saracen and Northern Star,” Tonkin says. “They will take time to come in, but once they are in, their sustainable lower cost improvements and synergies will be delivered. “I guess when you look at the investment thesis for Northern Star and you compare us up against the rest of our peers, we absolutely have some of the best assets in the best places in the world. We focus on Tier 1 locations and it’s deliberate. “We have a significant opportunity to grow our production, to grow our margins and grow our mine lives which ultimately adds value for all of our shareholders, and we have the operational and financial acumen to continue to develop and expand on this business.” Newcrest Mining, Australia’s largest gold miner by market capitalisation, is eyeing additional gold deposits surrounding the Havieron gold-copper project in Western Australia’s Paterson Province. The company entered a six-year farm-in

Northern Star is the sole owner of the Super Pit since it merged with Saracen.

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agreement with Greatland Gold for the project in May 2019. Havieron contains an initial inferred resource of 3.4 million ounces of gold and 160,000 ounces of copper, with Newcrest general manager Fraser MacCorquodale saying its growth program will help expand the project’s mineral resource. “Over the past few years there have been some great exploration success stories coming out of Australia,” MacCorquodale says. “The best example is the Havieron discovery by Greatland, who were willing to drill holes up to a kilometre and the reward for both companies out of that has been fantastic.” Newcrest is exploring the South East Crescent Deeps, which display high-grade gold that is open at depth; the Northern and Eastern Breccia targets, which also show open higher grade mineralisation; and other geophysical targets near Havieron. The company is searching for a larger zone of mineralisation through its Northern and Eastern Breccia targets, which may display similar traits to Havieron’s North West Corridor, while the mineralisation of South East Crescent deeps is still being determined. “This is all about (finding out if there) are there more Havierons floating around Havieron,” MacCorquodale says. “We’re looking forward to see what is coming out of our drilling programs.” Capricorn Metals is one of Australia’s upand-coming gold producers, having poured first gold at the Karlawinda project in the

Pilbara region during June. The project contains a single ball mill comminution circuit is targeting around 100,000 ounces of production a year. “We’ve got more than 10 years mine life on current reserve base of 1.2 million ounces which we think has the potential to get a lot bigger,” Capricorn Metals chief executive officer Kim Massey says. “A really important point for us is that this is a new project. We’re not burdened with large growth capital numbers that you’re seeing more mature projects have to keep their production at current levels.” An industry trend of growing existing resources is evident at Capricorn. Massey says the company is focussed on exploring the site’s surrounding regions to expand its 10-year mine life. “The gold potential in this region is starting to be recognised with the recent gold discoveries changing the way we’re thinking about the Pilbara,” Massey says. “We’re seeing gold discoveries in the Pilbara across a number of geological settings. You’ve got the greenstone hosted shears like we’ve got out at Karlawinda and Calidus’ Warrawoona project, the granitehosted intrusions De Grey is getting out at Hemi and the folded mafic intrusion like you’ve got out at Paulsens. “Pleasingly, we’re seeing those geological settings across our tenement package with only a fraction of our ground having been explored for gold in the past.

Image: Greatland Gold.

AUSTRALIAN RESOURCES & INVESTMENT

The Havieron box cut development.

The gold potential in this region is starting to be recognised with the recent gold discoveries changing the way we’re thinking about the Pilbara “The hurdle for exploration success becomes a lot lower when you’ve got a mill turning in the district and any exploration success you do have generally adds significant value for the company.” Western Australia’s exploration incentive scheme (EIS) pushes for exploration activity across the state through 3D perspectivity mapping, geophysical surveys, exploration through cover, strategic industry research and innovative drilling.

According to the Western Australian Government, for every $1 million that is invested through the EIS, $31 million is generated in benefits for the state. The Gruyere gold joint venture between Gold Road Resources and Gold Fields is the most successful example to come out of the EIS. Opened in December 2019, the mine was one of the largest gold discoveries in Western Australia in more than a decade. The JV partners aim to grow production further through an increase in gold grades and a lift in throughput. “(Our) three-year outlook sees us building annualised gold production to a sustainable 350,000 ounces,” Gold Road managing director Duncan Gibbs says. “Gruyere is really in a fairly unique tier of operations. There really are only three fivemillion-ounce-plus discoveries made this century: Tropicana, Gruyere and Hemi. “That underpins Gruyere being a top 10 producer both in terms of annual production and the total resource and reserve inventory.” Gruyere, which has a 12-year mine life, contains open pit reserves of 3.4 million ounces and an open pit mineral resource of 6.7 million ounces. Gibbs says Gruyere is operating across two kilometres of mineralisation in a single pit, but the JV partners are now exploring its underground potential. “We’re looking to extend that mineralisation at depth with this deeper drilling to understand the long-term potential,” he says. “We’ve got some of the initial intercepts … of 100-odd metres

over a gram and within that some hybrid core zones. “An issue we’re going to look at is what’s the best way to mine that? Do we mine all of those wide mineralised zones? Or do we mine out the higher-grade intercepts within that? “We’ve done enough to indicate we think it’s viable if we get the continuity of mineralisation we’re hoping to expect.” To expand its footprint, Gold Road is looking for a second gold operation in Western Australia. This includes the company’s Southern project area, which hosts the Gilmour resource that contains a 258,000-ounce indicated and inferred mineral resource. “We look at Gruyere as a long-term operation where the plant is going to be full of a combination of open pit and underground ores,” Gibbs says. “The big leverage for value for Gold Road is to make a second discovery, so our focus is really within the southern part of the Yamarna Belt. “What we’re really starting to unlock now is some fairly coherent zones of regolith anomalism; that lets us get more focussed with our RC (reverse circulation) and diamond drill follow up.” ABS data reveals that gold exploration grew by 41 per cent year on year to $430 million in the June 2021 quarter. As gold companies look to the future, the trend of increasing resources and mine life looks likely to remain at the forefront. And Western Australia is well positioned to maintain its place as the key jurisdiction hosting many of Australia’s leading gold deposits.

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GOLD

Gold investment keeps its shine The Australia gold market is facing a flurry of exciting developments. Fat Tail Investment Research gold investments editor Brian Chu explains what’s to come for the sector.

fter a record 2020 in Australian dollar terms, the gold market continues to deliver promise for Tier 1 producers right through to the junior sector. And while prices may have dipped this year, investor interest in the commodity has maintained its strength. Fat Tail Investment Research gold investments editor Brian Chu says investors can find stronger value from gold stocks this year thanks to the lower prices. “What I have noticed is because there is a divergence in the price of gold and the gold stock index, gold has recovered all of its decline since early August where we had a $US120 ($163.71)-an-ounce drop in the space of two days,” Chu tells Australian Resources & Investment. “The gold index is trading a bit lower, so chances are we are actually seeing better value in these gold stocks and we are currently in the middle of the campaign to bring in new subscribers for our gold trading service. “Investors are waking up and realising that while the gold stocks are selling at lower prices than last year, it is actually offering them substantial value because they’re buying in at a more attractive price.” Gold exploration expenditure in the 2020-21 financial year reached higher levels thanks to investor support for

early-stage mining projects. Despite the increase in activity, lower gold prices in 2021 have hit the share price of mineral explorers. Chu says this trend has elevated the interest in speculative gold stocks. “There is increasing speculative interest as they realise maybe the selling down of these stocks is relative to the price of gold,” Chu says. “That’s why the explorers are starting to catch a bid. It’s an important time for potential investors to look at strong companies in the speculative space and more established gold stocks space – there’s quite a lot of value to be had. “I believe that we could actually see a bit of a catch up in investors buying up gold stocks, closing in the gap of the price of gold.” Chu has established a strong understanding of the precious metal over the past decade. Starting his investment journey during the 2013-14 gold bear market, Chu has accumulated enough funds to turn his investments into a full-time career. Chu’s success analysing the gold industry led him to establishing Australian Gold Fund in August 2019, which he says is outperforming the ASX gold index by 15 to 20 per cent per annum. He runs two gold stock investment

Fat Tail Investment Research gold investments editor Brian Chu.

services through Fat Tail, including Gold Stock Pro and Rock Stock Insider. Both services use the well-renowned Lassonde Curve model of investment, which is used to track the lifecycle of mining stocks. Gold Stock Pro implements this method to cater to investors who are willing to put their money in speculative mining plays listed on the ASX. It focusses on the longterm bull market of gold plays to deliver substantial profits. “We are looking to bring people to Gold Stock Pro who want to take a bit more risk and invest in gold explorers and mine developers,” Chu says. With new gold production coming online across Australia each year, exports have entered record territory. Newcrest Mining’s Cadia East operation in New South Wales, which produced 764,895 ounces in the 2020-21 financial year, leads the way among Australia’s gold mines. Strong production and shipments have also brought value to shareholders of many of Australia’s largest gold miners. Chu’s second gold investment service, Rock Stock Insider, focusses on constructing a portfolio of high-quality stocks ahead of the next bull phase for the gold market, including some of Australia’s blue-chip mining companies.

Gold remains the fundamental safe-haven investment as shown during the COVID-19 pandemic.

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AUSTRALIAN RESOURCES & INVESTMENT

Chu runs the Gold Stock Pro and Rock Stock Insider investment services through Fat Tail.

His insights through Rock Stock Insider allow subscribers to invest in gold equities to boost their financial standings. “Rock Stock Insider allows investors to get a foot in the door to understand the financial system of the mining industry and we also recommend to them more established gold mining companies so that they can be exposed to the benefits of the upcoming rally in gold and weakness of our (Australia’s) financial system,” Chu says. With new gold mines beginning operations and other being expanded, production has been forecast to grow even further. Reflecting this upward trend, Australia even surpassed China as the world’s top gold producer for the first six months of the year. Backed by booming prices for the precious metal, Australia’s global standing as a producer has caused many gold companies to push large investments into new deposits. While this has resulted in new output coming online, Chu says the COVID-19 pandemic may hamper Australia’s chances at maintaining the top spot. “State premiers trying to manage the risk of virus outbreak and win votes by showing their voters how tough they can be in managing COVID-19 has led to border

Australia became the world’s top gold producer for the first half of 2021.

crises,” Chu says. “For example, Western Australia is currently facing a mining worker shortage as the fly-in, fly-out workers are held up at the border. “So, we might take a little longer to be clearly ahead of China in terms of gold production if the politicisation of this virus and border closures continues in the next couple of months.

“I am noticing that a number of producers are reporting that cost will be up and are very careful about 2022 production guidance as a result of foreseeable border restrictions implemented by the Western Australia Premier.” COVID-19 caused the stock market index to fall by 20-35 per cent last year, but gold and iron ore were exceptions. “Last year was a very devastating case of global and economic financial weakness, but I believe when it comes to crises like that, human nature comes back in and we focus on what we feel safe with and gold has stood the test of time,” Chu says. Traders determining the price of gold will be more fixated on monetary policy, global growth and inflation rather than the production of gold. For Chu and many savvy investors, gold remains the fundamental safehaven investment. “The uptake of investors into our gold trading service is quite phenomenal. We are actually receiving more sign-ups now than in August 2020 when the price of gold was at their high.” With significant value in gold investment, Chu’s services which are built upon his own personal expertise will prove to be an asset ahead of gold’s next bull run.

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GOLD

WITH INFLATION OCCUPYING INCREASING MINDSHARE, WHAT IS GOLD’S STRATEGIC ROLE? BY ANDR EW NAYLOR, WOR LD GOLD COUNCIL R EGIONAL CHIEF EXECUTIVE OFFICER, APAC AND PUBLIC POLICY

Gold remains a beneficial asset during uncertain economic conditions.

ith second quarter CPI (consumer price index) in Australia jumping to its highest in more than 13 years, inflation is emerging as a key concern for investors. As a consequence, institutional and retail investors are looking for ways to protect against rising prices. In the long term, gold is a proven hedge against inflation, but its short-term performance is less convincing. More recent analysis by the World Gold Council shows that gold can indeed be an important component of an inflation-hedging portfolio.

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W H Y I S I N F L AT I O N A C O N C E R N? Investors in many markets around the world have been used to decades of relatively low inflation. COVID-19 has been a game changer. Supply chains have been tightened, and with the prospect of a quick economic recovery on the horizon in many markets, demand in many areas could substantially outstrip supply. Commodity prices in particular are reflecting this, as are business inventory data and shipping rates. Other factors are also coming into play – a huge increase in government debt (to fund unprecedented support packages during the height of

the pandemic) and an indication that monetary authorities will tolerate higher inflation suggests that the risks are skewed toward the upside. R E L AT I O N S H I P B E T W E E N G O L D A N D I N F L AT I O N Most global conversations on inflation focus on US CPI given the hegemony of the US dollar and US interest rates. But for all the discussion on gold as an inflation hedge, gold’s relationship to US CPI is surprisingly weak – historically CPI changes and gold returns have had a weak linear relationship. And since 1971, when the US fully exited

AUSTRALIAN RESOURCES & INVESTMENT

Australia continues to be one of world’s top producers of gold.

the Gold Standard, only 16 per cent of the changes in gold prices can be explained by CPI inflation. Other factors come into play. Another reason is that there are several tools that are used as inflation hedges – gold is just one. More recent analysis has compared gold to other inflation hedges, such as TIPs and REITs. Whilst this analysis shows that TIPs and REITs are the most consistent hedges against inflation, gold actually ranks third in rising inflation environments, and second in persistently high inflation environments. Sensitivity to inflation is just one consideration – others include reliability, accessibility and cost. A similar conclusion can be drawn from the long run picture and whilst there is more work to be done, gold’s financial asset status and its value as a means of saving, ties it more closely to economic growth and money supply growth in the long run, rather than just CPI. S T R AT E G I C C A S E F O R G O L D So whilst gold can be an effective inflation hedge, along with other assets, what makes gold different? When analysing the strategic case for gold there are a number of attributes that make it an attractive asset class. First, it can be a source of returns. Investors have long considered gold as a beneficial asset during periods of uncertainty. Historically, it has generated long-term positive returns in both good and bad economic times. Looking back almost half a century, the price of gold in US dollars has increased by an average of nearly 11 per cent per year since 1971 when the Gold Standard collapsed. Over this period, gold’s long-term return is comparable to equities and higher than bonds. Gold has also outperformed many other major asset classes over the past five, 10 and 20 years. The average annual return of gold in Australian dollars was more than nine per cent between December 2000 to December 2020. This duality of gold (its long-term performance in

both good and bad economic times) reflects the diverse sources of demand for gold and differentiates it from other investment assets. Gold is often used to protect and enhance wealth over the long term as it is no one’s liability, and it operates as a means of exchange due to its global recognition. Demand also comes from a range of sectors, including investment, jewellery, central banks and technology. Each has different drivers making gold a unique asset class. A second attribute is it can be an effective diversifier. The benefits of diversification are widely acknowledged – but it is hard to find effective diversifiers. Many assets become increasingly correlated as market uncertainty rises and volatility is more pronounced, driven in part by risk-on/risk-off investment decisions. As a result, many so-called diversifiers fail to protect portfolios when investors need them most. Gold is different in that its negative correlation to risk assets generally increases as these assets sell off. Thirdly, gold is a liquid asset. It is traded globally and average daily trading volumes between December 2010 and December 2020 exceeded $245 billion. Taking these factors together suggests that gold can enhance a portfolio’s risk-adjusted returns and it is for these reasons that institutions and individuals have long recognised the strategic role of gold. Australia is a critical component of the global gold market – in 2020 Australia was the third largest producer of gold in the world, after China and Russia. It is also home to some of the largest international refineries, processing material for the domestic and international markets. And with an estimated $2.7 trillion invested in superannuation funds alone (including self-managed funds) there is an opportunity for gold to play a larger role in protecting the wealth of the nation. To read the analysis referenced in this article, or to access the World Gold Council’s gold valuation tool Qaurum, please visit www.goldhub.com.

Andrew Naylor Andrew joined the World Gold Council in 2016 and since 2020 has led its regional office in Singapore. Originally part of the central banks and public policy team, Andrew was responsible for its Islamic finance initiative, culminating in the launch of the AAOIFI Shari’ah Standard on Gold. Andrew started his career at international consultancy firm Cicero Group advising financial institutions on foreign investment and trade policy in Asia, and the global regulatory reform agenda. In this role, he provided economic and political commentary for global broadcasters including the BBC, Bloomberg, CNBC and China Central TV.

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LITHIUM

Powering through the battery boom The outlook for lithium remains prospective for ASX-listed companies which are looking to tap into the clean energy revolution.

s countries across the globe adopt green technologies to decarbonise, electric vehicles (EVs) and energy storage solutions are at the forefront of innovation. Determining the success of a clean energy future relies on a steady supply of rechargeable lithium-ion batteries, which in turn requires a stable supply of lithium. Australian mining companies are wellpositioned to deliver lithium products that are used in these batteries. The country has 4.7 million tonnes of lithium reserves, according to data from the US Geological Survey, behind only Chile’s 9.2 million tonnes. Fitch Solutions’ global lithium outlook states that the world’s lithium production will triple between 2020 to 2030 to 1.5 million tonnes. The report highlights that Australia will remain the world’s largest lithium producing country as output continues to grows at its mines. “Australia is by far the world’s top producer of lithium, let alone in Asia, with an output of 40,0000 in 2020,” Fitch Solutions senior commodities analyst Sabrin Chowdhury tells

Image: Pilbara Minerals.

Mining activity at the Pilgangoora lithium-tantalum operation.

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Australian Resources & Investment. “And we expect the country to maintain its dominant position in the global lithium market for years to come with rising production. “Lithium companies in Australia will remain dominant players in the global lithium market, providing major end industries globally with the metal.” While Tesla remains the dominant force for EV production, traditional automakers such as Volkswagen are catching up to gain a piece of market share. This is also driving up demand for lithium right down the supply chain, with Fitch Solutions forecasting around 27 million EV sales by 2030, representing a huge spike from the 5.6 million units expected in 2021. Fitch Solutions anticipates that battery supply will become more vital due to supply chain demand from automakers. “We believe that the lithium market will be tight in the next five years, with supply chasing demand; and we forecast that both carbonate and hydroxide prices will trend higher,” Chowdhury says. “The sharp acceleration in demand for

lithium-ion batteries will outpace supply growth, keeping prices elevated.” Lithium miners are also receiving strong shareholder interest, with Piedmont Lithium increasing its market capitalisation by 1732 per cent in the 2020-21 financial year to $1.6 billion. Its market capitalisation ballooned following a sales agreement with Tesla in September 2020, where Piedmont agreed to supply 160,000 tonnes per annum of spodumene concentrate. The synergies between EV manufacturers and mining are expected to rise as supply chains are fortified. “There are large supply growth opportunities in a variety of countries, including Australia, Chile, Canada, United States, China, Germany, the Czech Republic and Serbia, among others,” Chowdhury says. “There is also potential for frontier producers to emerge (Namibia and Congo DRC in Sub Saharan Africa, for example). We are already seeing a growing number of projects across many different regions, with higher lithium prices in the coming years to benefit these explorers of lithium.”

AUSTRALIAN RESOURCES & INVESTMENT

The shift of companies like IGO to mining clean energy materials supports the world’s battery boom.

Fitch Solutions has identified 124 lithium operations globally, which include sites still under development. Australia’s national and state governments have given support to local lithium projects, with initiatives including the Australian Government’s Critical Minerals Facilitation Office, which launched in January 2020. The office encourages investment in critical minerals companies and supports partnerships, research and funding for lithium miners. It also aims to reveal prospective critical minerals hubs and precincts across Australia, which could uncover additional lithium deposits. At this stage, the consultancy expects the current number of lithium projects will not be

enough to meet growing demand. “Government support for lithium projects is rising, as lithium is viewed as a strategic mineral essential to the green and tech transition. This will accelerate project completion and funding,” Chowdhury says. In the short-term, Fitch expects lithium to continue its positive trend. “We expect broad lithium prices to trend higher in 2021 and 2022, as accelerating demand for lithium-ion batteries and a tight upstream supply keep prices elevated,” Chowdhury says. “We forecast Chinese lithium carbonate 99.5 per cent to average $US13,450 ($18,190) per tonne in 2021 and $US15,025 per tonne in 2022, and for Chinese lithium hydroxide monohydrate 56.5 per cent to average

$US11,950 per tonne in 2021 and $US14,300 per tonne in 2022. “In the longer term, lithium prices are likely to be impacted by green premiums due to heightened priority of sustainable lithium extraction techniques. “A faster-than-anticipated advancement of battery recycling technology presents a risk to lithium prices by significantly expanding sustainable lithium supply.” P L U G G I N G I N T O WA’ S L I T H I U M S U P P LY With Australia home to some of the world’s largest lithium mines, the industry is gearing up for the looming demand spike. IGO has this year refocussed its operations on clean energy metals, beginning with its

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LITHIUM

joint venture (JV) agreement with Chinese mining and manufacturing company Tianqi Lithium, which was finalised in July. The $US1.4 billion ($1.9 billion) transaction forms the Lithium HoldCo JV, which will focus on the Greenbushes lithium mine and Kwinana lithium hydroxide refinery in Western Australia. IGO owns a 49 per cent interest in the JV, with Tianqi owning the remaining 51 per cent. Greenbushes is considered the largest hard rock lithium mine in the world and is now operated through Lithium HoldCo and Albemarle Corporation. The mine’s chemical grade plant two has started to ramp up, increasing production capacity to 1.34 million tonnes per annum. Formation of the Tianqi JV was complemented by IGO’s divestment of an interest in the Tropicana gold operation, strengthening the company’s position as a clean energy metals miner and explorer. IGO managing director and chief executive officer Peter Bradford says the company’s shift of focus will aid the battery boom. “Right now, the (Tianqi joint venture) has got two assets in it and they’re both here in Western Australia, and importantly they’re world class, vertically integrated lithium assets,” Bradford, presenting at the 2021 Diggers & Dealers Mining Forum, explains. “What that means is we’ve got a 25 per

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The sharp acceleration in demand for lithium-ion batteries will outpace supply growth, keeping prices elevated cent interest in the Greenbushes mine … it is the world’s lowest cost, highest grade hard rock lithium mine on the planet and we also get a 49 per cent interest in the Kwinana lithium hydroxide refinery, which is the first fully automated lithium hydroxide plant in the world.” The Kwinana facility produced its first lithium hydroxide in August, with the focus now shifting to operating the first production train at the site, ramping up production

to 24,000 tonnes per annum by the end of March 2022. Kwinana is a key region for lithium processing, with Covalent Lithium receiving approval from the Western Australian Government to construct its own lithium refinery in the area during August. Covalent’s operation has been designed to produce 50,000 tonnes per annum of lithium hydroxide. IGO and Tianqi’s share of spodumene concentrate at Greenbushes is currently taken to Tianqi’s processing plants in China. “Going forward as we commission the Kwinana lithium hydroxide refinery, spodumene will start (being produced) here,” Bradford says. “We would expect to be commissioning that second train in early 2024. That would give us an installed capacity of 48,000 tonnes per annum of battery-grade lithium hydroxide that goes to markets in South Korea and Europe. “There’s the opportunity and there is the supply from Greenbushes to build train three and four, doubling production through to 96,000 tonne per annum.” Bloomberg New Energy Finance data reveals lithium-ion battery demand will approach 3000 gigawatt hours per year by 2030, primarily driven by passenger EVs. This would result in a 25 per cent annual

AUSTRALIAN RESOURCES & INVESTMENT

Spodumene is a major source of lithium.

growth rate, with Bradford anticipating the real results may be even higher. “Each year, the analysts reprojected higher, and each year reality outperformed it,” Bradford says. “We expect if you increase the number of lithium-ion batteries five times, generally the amount of metal you need goes up by five times as well. “(We) produce nickel, copper, cobalt and lithium, and those four metals represent 55 per cent of the metals that go into a lithiumion battery. And to my knowledge we’re the only company globally that produces that one-stop shop for EV battery metals.” IGO and its JV partners plan to grow the capacity at Greenbushes to 2.5 million tonnes per annum of spodumene concentrate by 2027. This includes a tailings retreatment plant that will add 30,000 tonnes of capacity, and a potential third and fourth concentrator being commissioned in 2024 and 2027, respectively. “If you can imagine when all of that is up and running, we will have a 20-year reserve life and will have on top of that probably another five or seven years of resource life from the parallel Kapanga pit,” Bradford says. “(EVs are) driving this shift in the outlook for lithium-ion battery demand and that’s all underpinned by passenger vehicles, but also includes commercial vehicles, bikes, buses and even the consumer electronics.” With its foot in the door at Greenbushes, IGO joins other growing lithium plays in Western Australia, including Pilbara Minerals at the Pilgangoora lithiumtantalum operation. Pilbara Minerals is aiming to produce between 460,000 and 510,000 tonnes of lithium spodumene concentrate per annum

at Pilgangoora. The company has rapidly grown to become a major success story in the state since its first spodumene shipment in October 2018. Pilbara Minerals managing director and chief executive officer Ken Brinsden says Pilgangoora could easily become a one-million-tonne-per-annum operation in the future. “I’ve no doubt that over time Pilgangoora will rival Greenbushes as the most important hard rock lithium operation globally,” Brinsden says. Brinsden also believes the lithium market is facing a potential supply deficit, with too many chemical conversion plants compared with the amount of spodumene supply available. “When I started in the lithium world we would go and knock on doors in China for the purpose of selling spodumene and there would be about five buyers – a handful basically,” Brinsden says. “In the intervening period, oodles of chemical capacity have been built in China. “China has built too much chemical conversion capacity for the available spodumene supply. There is a genuine shortage of spodumene in the market and that means that the miners are going to attract a higher margin than the historical norm. “The chemical conversion industry is now stuck, they’ve built a lot of capacity without reference to the underlying raw material supply base. As a result, the miners are going to attract more margin.” Brinsden says Pilbara Minerals has managed to weather the storm of declining lithium prices in 2019 and 2020 to capitalise on the shortage. In January, the company acquired Altura Lithium for $US175 million, then renamed the company’s assets as the Ngungaju plant and operations.

“It’s in care and maintenance today (August) but we’re now active in the restart at the Ngungaju operation and that’s going to be a really important part of our future,” Brinsdsen says. “There’s 200,000 tonnes of unallocated spodumene supply and it’s not allocated in offtake. That is really, really important leverage in today’s market.” Pilbara Minerals will ramp up Ngungaju’s capacity to 200,000 tonnes by the middle of 2022, complementing its existing Pilgan plant (originally the Pilgangoora plant). In September, the company upped its resource by 39 per cent to 309 million tonnes after discovering pegmatite domains at Nugungaju. Pilbara Minerals has also developed its battery material exchange (BMX) platform with Australian technology company GLX Digital to open a lithium spot market sales platform. Since trials started in March, the platform has qualified 27 entities for the platform, which allows buyers to purchase spodumene concentrate through auctions, providing a separate sales channel for Pilbara Minerals’ unallocated spodumene outside of existing offtake agreements. “Pilgangoora (has a) huge mineral endowment, massive resource, massive reserve and what that means is that we can contemplate how we’re going to respond to market conditions, and I’d like to think that we’re incredibly well placed,” Brinsden says. “We are already the world’s largest independent lithium raw material supplier – that is we’re not vertically integrated with the chemical facility.” Australia’s position in the lithium market is showing all the signs that the country is set to grow even further as a producer. Backed by successful mines like Greenbushes and Pilgangoora, lithium mining is ready to meet growing demand from the chemical conversion industry and EV manufacturers.

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URANIUM

URANIUM TO REGAIN ITS GLOW There is strong incentive that the uranium price is on the verge of bouncing back as contracts and supply begin to run thin across the globe, paving the way for new sources in Australia to come online.

Uranium ore.

t is well documented that the Fukushima disaster significantly impacted uranium prices in 2011, forcing many mines into care and maintenance. However, both the industry and analysts alike have predicted a resurgence in the spot price of yellowcake. Uranium, which powers nuclear reactors as a zero-emission energy source, remains a key part in the world’s clean energy transition in regions such as Europe. “With uranium, you use 300 times less space than a wind farm to produce the same amount of energy, while also requiring less materials when constructing a nuclear plant compared to solar or wind farm,” L2 Capital managing partner and senior portfolio

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manager Marcelo Lopez tells Australian Resources and Investment. Despite its benefits, the uranium price has remained low for around 10 years as miners and investors wait for the next nuclear fuel cycle. This cycle can be broken up into four stages, including uranium mining, conversion, enrichment and fuel fabrication. Lopez says power utility companies are working backwards from fabrication to uranium, which led to dwindling commodity demand. “There was a big bottleneck in the conversation market and a lot of uncertainty in the enrichment market,” he says. “No one wanted to buy uranium, because there was no

conversion or enrichment.” With the bottleneck fading, utilities companies are now starting to return to the market seeking long-term contracts as their carry trade purchases dry up. In July, global asset manager Sprott finalised its deal with Uranium Participation Corporation to form the Sprott Physical Uranium Trust, which has become the world’s largest publicly listed physical uranium fund. It went live in mid-August. The company, which has predominately dealt with precious metals, has experience in launching a gold fund and superfund over the past decade. Lopez believes this is the single most important change in the uranium market in

AUSTR ALIAN RESOURCES & INVESTMENT

the second half of this year. “Sprott has a lot of experience in commodities with over 200,000 clients worldwide,” he says. “The most important thing is that they are doing ATMs (At The Market) which is a way for Sprott to sell shares to the market and use the money to buy physical uranium.” Within four days of Sprott launching the uranium trust, 900,000 pounds of uranium were purchased with the spot price rising by 11 per cent to $US32.25 ($43.77) per pound within four days of operation. According to Canaccord Genuity Capital Markets, Sprott is shifting the momentum of uranium through its ATMs. “In our view, this is an early indication of

just how tight the market is,” the firm states. “And with (Sprott) now a very active physical buyer, we expect upward pressure on prices to continue, which in turn is likely to put pressure on utilities to revisit long-term contracting — a key catalyst for higher prices.” The strengthening conditions for uranium are reason for excitement for local uranium companies in Australia. Boss Energy chief executive officer Duncan Craib, speaking at the Diggers & Dealers Mining Forum in August, says his company is also gearing up for a new uranium cycle. The company owns the Honeymoon uranium mine in South Australia, which went into care and maintenance after Fukushima due to the lower uranium price.

As the market picks up, Craib is confident that Honeymoon will be Australia’s next uranium mine, with Boss working towards a final investment decision for the project. “Our intention, as we realised in the last cycles, is that we want to be there at the beginning and (layer) in contracts as the price starts to move,” he says. “Those contracts will deliver different pricing mechanisms … different durations, such that we can protect against the downside but take advantage of that market upturn.” There are currently two uranium mines currently producing in Australia – BHP’s Olympic Dam operation and Heathgate Resources Beverly mine, both in South Australia.

Alligator Energy has uranium assets in the Northern Territory and South Australia.

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URANIUM

Uranium analysts believe nuclear energy has a place in a decarbonised world.

For Craib, Honeymoon will tap into growing uranium demand as Australia remains an attractive place to source the radioactive metal. “What COVID has effectively taught the industry, is that reliance on a small number of jurisdictions and a limited number of producers is a really unwise strategy,” Craib says. “Australia offers a geopolitically stable environment with which fuel buyers around the world can purchase uranium and that’s gaining greater and greater attraction.” Boss’ strategy involves capitalising on the increasing uranium spot price, with Craib stating that nuclear energy is once again being identified for its ability to reduce carbon emissions. To meet growing demand, Honeymoon is permitted to produce and export up to 3.3 million pounds of uranium. Off-market activities such as the renegotiation of uranium contracts are also paving the way for more activity in the uranium market. “There is a hell of a lot of activity going on right now and buyers are now renegotiating contracts as suppliers are asking them to make concessions such is that they can win the new contracts,” Craib says. “We certainly expect to see more visible contracting as we go towards the end of the

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year or if possibly earlier if pricing starts to rise and looks sustainable. “We believe that prices will rise to the mid $US30s to the high $US30s on a spot price level on a calendar year end and with that – a real uplift in the actual term contract, which is when we will start getting excited.” The Northern Territory once had several of Australia’s operating uranium mines. As part of its plan to become a $40 billion economy by 2030, the Territory has again signalled its support for the commodity. This commitment has the potential to open an opportunity for Alligator Energy, a junior developer that is advancing uranium projects in both the Northern Territory and South Australia. Its assets include the Tin Camp Creek project, Beatrice joint venture with Cameco and its Nabarlek North tenements in the Alligator Rivers Province in the Northern Territory. Alligator managing director and chief executive officer Greg Hall says the company is prepared to sink its teeth into further exploration efforts within its portfolio. “The opportunity that our Alligator Rivers projects represent is that they are all in the same rocks and similar settings that Jabiluka and Ranger uranium projects lie in,” Hall says. “If you find a similar deposit to even half of

the Ranger uranium mine, you’ve got yourself a 25-year uranium mine at an economic grade to be reasonably mined.” Alligator’s recently approved Narbalek North agreement also gives it another exciting opportunity in the Territory. On the boundary of Narbalek is a prospect that was once drilled by Cameco, containing over six metres at 7.2 per cent uranium. Alligator plans to commence geophysics and drilling of the extension of this prospect this year. Alligator also has a significant presence in South Australia with the Samphire and Big Lake uranium projects. Samphire, which was acquired last year, contains a mineral resource estimate of 64.5 million tonnes at a grade of 230 parts per million uranium, but with a high-grade core within the deposit. Alligator is undertaking resource enhancement work and a scoping study to determine the best way to tackle the project. “We had a lot of support last year from shareholders and because we moved from an explorer to an early-stage developer with that acquisition,” Hall says. With market and exploration activity increasing, the uranium industry is steadfast that lid for the next cycle will open, with Australia remaining well placed to be a key supplier.

2021

AUSTRALIAN MINING PROSPECT AWARDS

E L A S N O W O N S R G E T I M NIN E E R I K P M S ’ C E A I H I T T TRAL OR RY F LS ST S S U A ARD ERA NDU AW D MIN ING I au . S om N c S . A CE s d r O a w PR a ct pr Pre

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SILICA

Sizzling silica Potential is emerging in Australia’s silica industry. Anthony Fensom highlights the companies planning to strengthen the commodity’s place in the country.

he race to become Australia’s next silica sand producer is heating up, as demand intensifies and supply of the key mineral dwindles. Who will be the next miner to benefit? “Dwindling output and environmental concerns are putting pressure on global supply, just as demand increases from Asia’s fast-growing solar power industry and other glassmakers,” says Neil McIntyre, chief executive officer of emerging silica sand miner Diatreme Resources. “It’s a perfect storm and for emerging producers such as Diatreme, we are extremely well placed to benefit.” P R O D U C T I O N R AC E Diatreme plans to produce premium-quality silica for the solar PV industry from its Galalar project, which is located near the world’s biggest operating silica sand mine at Cape Flattery in Far North Queensland. Having recently secured $10 million from investors for its key project, McIntyre is confident of advancing the project into production within two years. “We have been well supported by our key shareholders and that’s given us the confidence to progress our development schedule,” he says. The company is currently advancing a definitive feasibility study and an environmental impact study, together with conducting further exploration at the project. An economic study released in April 2020 showed the project could create more than 100 jobs for the local community of Hope Vale and Cooktown, injecting up to $42 million during its operation. A drive-in, drive-out operation is planned, with Galalar set to become Hope Vale’s biggest private employer. Many of the economic benefits will flow to the native title holders, who have a direct 12.5 per cent stake in the project. “Galalar will be transformational for the region and we’ve received strong backing from local stakeholders, including the First Nations community,” McIntyre says. “Subject to the necessary financing and

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Subject to the necessary financing and approvals, we aim to be in production as early as late 2022, helping support Far North Queensland’s post-COVID recovery approvals, we aim to be in production as early as late 2022, helping support Far North Queensland’s post-COVID recovery.” Highlighting the strong demand from Asia, Diatreme signed its third memorandum of understanding over potential offtake supply to the Chinese market in May. The company has flagged its continued engagement with “a range of potential offtakers and other partners.” However, Diatreme is not the only company seeking to capitalise on the silica sand boom. Nearby, Metallica Minerals is advancing its plans for a new silica sand mine, also located near the Cape Flattery mine. In August, the company released a scoping study for its Cape Flattery silica sand project, which followed the completion of a 98-hole drilling program. Further metallurgical studies on its silica sand samples are expected in the fourth quarter of 2021, with the company aiming to complete a pre-feasibility study and progress the environmental approval process. WA P R OJ E C T S Meanwhile on the west coast, Perth-based miners are also moving to develop new projects. In its latest quarterly report, VRX Silica announced it had moved to the next stage of the environmental approval process for its Arrowsmith North silica sand project, located

270 kilometres north of Perth. With three silica sand projects in Western Australia, the company expects to commence first production at Arrowsmith North in late 2021, followed by its Muchea and Arrowsmith Central projects. “Interest in the company’s products from Arrowsmith North remains incredibly strong and continues to grow,” the company states, flagging potential offtake partners in South Korea, Japan and Taiwan. Another emerging Western Australian producer, Perpetual Resources announced on September 14 a scoping study on the economics of a direct-shipping-ore (DSO) operation at its Beharra project, located 300 kilometres north of Perth. In June, the company was awarded a mining lease for the project, which Perpetual sees as becoming “the leading Mid West export silica sand project, with the lowest known impurity profile.” Also in Western Australia, Australian Silica Quartz Group is progressing a scoping study for its Albany White Hill silica sand project, examining the potential for exports of 0.5 to one million tonnes per annum. Elsewhere, Suvo Strategic Minerals is working towards a maiden JORC resource for its Nova silica project, while Cauldron Energy is progressing its acquisition of river-mouth sand licences located at the mouth of the Gascoyne River at Carnarvon. Regardless of which company wins the

AUSTR ALIAN RESOURCES & INVESTMENT

Diatreme Resources CEO Neil McIntyre.

race for production, the experts agree on one thing: more supply is essential. “Silica sand is a finite resource, and it is running out,” Diatreme’s McIntyre says. “Importantly, with an increasing focus on ESG issues, the need for sustainably produced supply has become critical.”

S U P P LY S H O R TAG E The Asia-Pacific region is already suffering a supply shortfall, driving prices higher. Forecaster IMARC Group reports significant supply deficits in China, Taiwan, Japan and elsewhere, with supply constraints due to depletion and environmental restrictions on dredging. For example, Chinese imports have grown from 270,000 tonnes a year in 2014 to more than two million tonnes in 2019, with the current solar energy boom only further increasing demand. IMARC estimates the Asia-Pacific silica sand market could reach nearly $US8 billion ($10.9 billion) by 2026, requiring an additional 40 million tonnes per annum of high-quality silica. The global market could expand to reach $US20 billion over the same period. Increased demand could also arise from the world’s decarbonisation efforts. Researchers at the National Renewable Energy Laboratory in the United States are testing new thermal energy storage technology that uses silica sand as a medium.

The research suggests using silica sand for thermal energy storage could help replace traditional heating fuels, such as coal and natural gas, potentially replacing less sustainable energy sources. “Traditional four-hour storage technologies don’t scale well to the grid or city scale. Now that we are in need of large-scale energy storage, this technology makes a lot of sense,” researcher Patrick Davenport said in a statement. Silica has been listed among other “new economy minerals” by the Queensland Government for its use in emerging technologies powering the global drive towards electrification. For miners such as Diatreme, the opportunity is enormous. “Australia has the necessary silica sand and importantly the regulatory framework to deliver sustainably produced supply. The future is extremely exciting for the entire industry, as we work to deliver the next wave of projects to meet the increasing demand,” McIntyre says.

Drilling activities at Diatreme Resources’ Galalar project.

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IRON ORE

Premium product strengthens Razorback’s case Magnetite Mines technical director Mark Eames explains why the Razorback project is a standout prospect in Australia’s iron ore sector.

agnetite Mines’ Razorback premium grade magnetite concentrate project in South Australia enjoys a unique set of advantages. Those advantages have come shining through in a high-level pre-feasibility study (PFS) into a long-life project development. The PFS, released in July, outlined a robust investment case for the project, prompting Magnetite to proceed immediately to a definitive feasibility study (DFS) – a key milestone towards securing development finance over the next 12-18 months. The “go forward’’ scenario in the PFS envisaged an initial $675 million project processing 15.5 million tonnes a year of selectively mined and upgraded iron ore to produce 2.7 million tonnes a year of premium grade magnetite concentrate (67.5-68.5 per cent iron content). The post-tax internal rate of return was

put at 20 per cent assuming a $US110 ($149) a tonne long run average benchmark price (62 per cent iron), rising to 33 per cent at $US150 a tonne – close to the average benchmark price for the 2021 financial year. Magnetite technical director Mark Eames, formerly a senior iron ore executive with Rio Tinto and BHP, says that a “massive amount of effort had gone in to the PFS.’’ “What we’ve put forward is to a very high standard. It would pass muster with any of the major mining companies. It has also confirmed we’ve got a really good project on our hands,” Eames says. “Importantly, it means investors can form a really clear picture of the project. We will be following the same systematic and rigorous pathway in the DFS which we are now forging ahead with.’’ Eames says the PFS has confirmed a high return and long life project enjoying

The outlook over Razorback Ridge.

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Magnetite Mines technical director Mark Eames.

a unique combination of inherent advantages – a low stripping ratio, access to existing infrastructure, the availability of low cost sustainable power and leading product quality. The PFS was based on a maiden probable ore reserve of 473 million tonnes, good for a mine life of 23 years at the initial planned production rate. The potential for future expansions and mine life extensions is highlighted by the 5.7 billion tonne mineral resource estimate for Razorback (three billion tonnes) and other deposits. “We will be starting relatively small. But we will be scaling up as we move forward and prove the performance of the initial development. It is a very sensible pathway,’’ Eames says. Because of the project’s premium grade product, the PFS assumed it would sell at a 23 per cent premium to the 62 per cent benchmark price. Eames says the company believes premium prices for high-grade product like that to be produced at Razorback “are here to stay.’’ “Our high grade-grade product is going to set us up for the long term, particularly in a world where there is increasing pressure for the steel industry to improve its environmental sustainability,” he says. “You can’t make low emissions steel out of low-grade iron ore because it takes too much energy to melt out the impurities. So it is best to start with a high-grade product. “And with our project, we can run on power from the South Australia grid which is already two-thirds renewable. It’s low cost too.”

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COKING COAL

Coking coal miners seize the day Australia’s listed coal miners are back in the spotlight, with surging prices and merger and acquisition (M&A) deals providing a “generational opportunity” for growth. Anthony Fensom writes. Nick Jorss plans to turn Bowen Coal into a mid-tier coking coal producer.

ith Asian demand remaining firm and supply constrained, the prospects appear bright for Australia to capitalise on its position as the world’s top metallurgical (coking) coal exporter. Seaborne metallurgical coal prices hit an all-time high of $US410 ($560) per metric tonne (CFR China) for premium hard coking coal on August 25, eclipsing the previous record high of $US392.50 set in January 2011 following Cyclone Yasi. The price of the key steelmaking ingredient has risen by around 250 per cent over the past year. Thermal coal prices have also hit record highs, with the price of thermal coal at Newcastle Port doubling over the past year to more than $US166 a tonne. Domestic supply tightness along with strong steel demand in China have

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contributed to the price rises. China’s unofficial ban on Australian coal has added to the supply issues, with imports from the United States, Canada and Russia unable to replace the quality or volume of Australian coal. While China has imported more coal from outside Australia, supply disruptions have impacted other major exporters, including wildfires in Canada and coronavirus outbreaks in Mongolia that have disrupted output. “China’s ban on Australian coal purchases from around November last year has caused huge distortions in the global coal market, with separate Chinese and rest-of-the-world pricing developing for both metallurgical coal used by steel mills and thermal coal used by power stations,” the Australian Strategic Policy Institute’s David Uren says.

Meanwhile, the widely publicised exit of major miners and Western bank moves to restrict finance for new coal projects have contributed to a lack of new supply. Rio Tinto completed its exit from Australian coal in 2018, while rival BHP has announced plans to sell its thermal coal assets and some of its lower quality Queensland coking coal assets by August 2022. The sell-off by major miners has sparked a new wave of M&A activity among remaining players, including listed and unlisted buyers. G E N E R AT I O N A L O P P O R T U N I T Y “It’s a once in a generation opportunity,” Bowen Coking Coal executive chairman Nick Jorss says. “Many existing players, such as BHP, are exiting the market, which is creating a lot of opportunities for companies such as Bowen. We are actively looking at assets of increasing size and quality to grow our business.” Jorss is known for his success at Stanmore Coal, where he famously acquired Isaac Plains in a $1 deal and transformed it into a multibillion-dollar enterprise. He aims to repeat his success at Bowen and make the explorer a profitable, mid-tier producer. In July, the company announced it had been awarded preferred bidder status in the sale of the Bluff PCI mine, an open pit mine located in the central Bowen Basin in Queensland. The project has approval to mine up to 1.8 million tonnes per annum of ultra-low volatile PCI coal. Just days later, Bowen announced an even bigger M&A deal, with its planned “transformational” acquisition of the Burton mine and Lenton project from New Hope Corporation. The assets include a 5.5 million tonnes per annum capacity coal handling and preparation plant and train loading facilities,

AUSTR ALIAN RESOURCES & INVESTMENTS

Many existing players, such as BHP, are exiting the market, which is creating a lot of opportunities for companies such as Bowen. We are actively looking at assets of increasing size and quality to grow our business. with a JORC resource of 204 million tonnes and 30 million tonnes reserves. “Completion will deliver on Bowen’s strategy to be the next leading independent ASX coal producer, targeting (run-of-mine) production of approximately five million tonnes per annum by 2024,” the company states in an August announcement. Bowen also sees the potential to create a processing hub for its nearby exploration and development projects in Queensland’s Bowen Basin, including Broadmeadow East, Hillalong and Carborough. Other Australian coal miners are also enjoying share price gains, with many recently hitting 12-month highs. Among them, Stanmore Resources is planning further expansions, with mining lease approvals granted in July 2021 for its Isaac Downs project. The company plans to

produce up to 2.5 million tonnes per annum of coking coal, with a 10-year mine life. In the same month, Stanmore announced the completion of the Millennium and Mavis Downs mine acquisition from Peabody Energy Australia, with auger mining to commence in the following months. Elsewhere, major miner Whitehaven Coal received a boost with the Federal Environment Minister approving its Vickery Extension Project in north-west New South Wales in September following a five-year approval process. In its fiscal 2021 results presentation, the Sydney-based miner pointed to an “emerging supply gap” in thermal seaborne coal, with Australian high-grade coal in strong demand from Asian buyers. It also pointed to rising demand for metallurgical coal, with Asian seaborne Coking coal prices have surged in 2021.

Bowen Coking Coal executive chairman Nick Jorss.

demand projected to reach nearly 250 million tonnes by 2050, up from around 150 million tonnes in 2020. PRICE RISE Will the recent gains for Australia’s coal miners continue? In its latest quarterly report, the Office of the Chief Economist projects that the Australian premium hard coking coal price will rise from an average of $US143 a tonne in 2021 to $US157 by 2023. Australia’s exports are expected to increase too, from a low of 171 million tonnes in fiscal 2021 to 186 million tonnes by fiscal 2023. Coal export values should reverse recent declines, rebounding from $22 billion in fiscal 2021 to almost $32 billion by fiscal 2023, the government forecaster states in its “Resources and Energy Quarterly” for the June quarter 2021. “As industrial production recovers outside China, demand for metallurgical coal is likely to rebalance, narrowing the price differential on Australian output and adding to revenue for Australian exporters,” the report states. “Over the outlook period, metallurgical coal demand is expected to grow in India (though the latest COVID-19 outbreak presents risks to this), Japan, South Korea and Europe.” Importantly, it notes that Australian metallurgical coal exporters have “largely succeeded in diversifying their own supply chains, building new markets in South Korea, Vietnam and Brazil.” For Australia’s next wave of coal miners, the future for ‘black gold’ appears brighter than ever.

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MINING SERVICES

Efflorescent salts in a drain at the toe of a closed waste rock dump.

Implications of climate change on mine water quality

A recent review sheds light on best-practice water quality assessments for mine design, operations and closure.

he 2019-20 Black Summer bushfires inspired Bronwen Forsyth to write a paper on the implications of climate change on mine-waste management and water-quality prediction. Dr Forsyth, a senior environmental geochemist at SRK Consulting, wanted to start a conversation in mining about the effects of climate change on Acid Metalliferous Drainage (AMD) assessment and waterquality prediction. She identified a lack of Australianbased literature that address climate-change impacts on AMD – and believed more could be done to inform mining companies on this issue. “When I saw the devastation from the bushfires, I considered how climate change is affecting my everyday work in AMD and water quality assessment,” Forsyth says. “I wanted to encourage new thinking on how I could help mining companies with AMD issues to better adapt to climate change.” Forsyth presented her paper – Climate Change and the Assessment of Acid Metalliferous Rock Drainage: What are the Considerations for Our Technical Discipline? – at the 10th AMD Australia workshop in June. The virtual workshop was held through the Sustainable Minerals Institute at the University of Queensland, where Forsyth completed her PhD in 2014. The paper is timely. Climate change in

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Australia is expected to bring more hot days and shifting rainfall patterns, including longer droughts followed by floods. This uncertainty has implications for AMD assessment and water-quality predictions that should be factored in mine design, operations and closure. “There’s a natural tendency to avoid uncertainty in AMD assessments,” Forsyth says. “But climate science has come a long way. We need to embrace climate uncertainty and factor it into AMD and water-quality predictions. And better communicate those risks to executives and boards, so they can make informed decisions.” The risks are substantial. In her paper, Forsyth cited research from the devastating 2010/11 Queensland floods that closed or restricted production in 40 of Queensland’s 50 coal mines, costing more than $2 billion in lost production. Several coal or coal-seam gas mines had uncontrolled water discharges during that wet season. Environmental groups raised questions about whether the run-off from those mines led to elevated salinity in downstream environments. P R AC T I C A L I M P L I C AT I O N S For her paper, Forsyth analysed local and international research on AMD and climate change, across government, academia and industry. In addition, she drew on personal

observations from more than a decade of work in Australian and Canadian mining. She had two goals. First, to identify the practical implications of higher temperatures and more variable rainfall on mine waste and water management. Second, to offer suggestions for the pursuit of best practice for AMD assessment in response to climate change. “Australian mining needs a framework for AMD assessment that incorporates climate change,” she says. “More research can raise awareness of this issue, encourage industry debate, and help AMD practitioners and mining companies better respond to climate-change risk.” Forsyth’s paper outlines potential impacts of climate change on mine waste and management – and provides a range of suggestions. Chief among them is developing a new approach to determining “first-flush” concentrations to account for longer dry periods followed by intense rainfall. First flush refers to pollutant concentration or mass loadings associated with the initial portion of run-off water. During drought, soluble minerals, as by-products of sulphide mineral oxidation, accumulate in the mine waste rock. If heavy rainfall follows a dry season, the soluble minerals dissolve and can be transported from the waste facility in runoff to local

AUSTR ALIAN RESOURCES & INVESTMENT

waterways, or as seepage into groundwater. The discharge from a mine’s waste-rock dump, for example, could have a high concentration of solutes within an intense first flush, followed by a “long tail” of lower concentrations. “AMD assessments typically focus on long-term averages or mean annual preciptiation rates,” Forsyth says. “We need to better account for extreme lows and highs in precipitation brought on by climate change, and how that can affect first-flush concentrations, in AMD assessments.” C R E AT I N G VA L U E Enhanced AMD assessments can create significant value for mining companies by better understanding the environmental risks and identifying appropriate mitigation measures. A robust understanding of AMD potential is a critical input into the design of mine pits, waste-rock dumps, tailings storage facilities, covers, water-management structures and water treatment. Moreover, AMD assessments that better incorporate climate change can help mining companies identify and manage risks prior to closure. These include: the unintended exposure of potentially AMD-forming wastes following extreme weather events; and unforeseen closure costs, such as water treatment and longer periods of care and maintenance to achieve mine waste landform rehabilitation objectives before mine lease relinquishment. She says some mine closures underestimate AMD risks. “It can be very costly if a mine gets its closure wrong and has to provide water treatment in perpetuity. Mining companies need to understand how climate change will affect discharge flow, seepage or underground transport at mine closure, many decades after production stops.” R I S K M A N AG E M E N T Forsyth says executive teams and boards should view AMD assessments (in the context

Efflorescent salts and iron precipitates in an area of seepage at the base of a tailings facility.

of climate change) as part of their organisation’s risk-management strategy. She recommends incorporating best-practice AMD assessment during the pre-feasibility stage of mine planning. “It’s important that an AMD assessment that factors in climate change is done early in a mine project. Too often, companies think about this after the mine is built,” Forsyth says. Ongoing testing to validate water-quality predictions is also needed. “It’s not enough to model long-term water-quality predications using climatechange assumptions. Companies need to monitor water quality and flows to test that modelling. Automated sampling might be required during extreme weather events when it’s hard to get people on the ground,” Forsyth continues. She says boards should ask how climate change is affecting water-quality risk at their company’s operations. “AMD issues are not easy to quantify because they play out over decades. But water discharge issues at mine sites can be damaging – environmentally, financially and reputationally – if companies don’t manage the risk.” Forsyth says the summary table in her paper can help mine management teams and boards frame AMD discussions about climate change. “Our industry needs to talk more about how we factor climate change into mine waste and watermanagement assessments. And what the possibility of an increase in extreme weather events means for long-term water quality management from mine waste facilities,” she concludes. SRK Consulting is a leading, independent international consultancy that advises clients mainly in the earth and water resource industries. Its mining services range from exploration to mine closure. SRK experts are leaders in fields such as due diligence, technical studies, mine waste and water management, permitting, and mine rehabilitation. To learn more about SRK Consulting, visit www.srk.com

SIX SUGGESTIONS F O R B E S T- P R A C T I C E AMD ASSESSMENT IN RESPONSE TO C L I M AT E C H A N G E : 1. Q uantify first-flush concentrations in mine water-quality assessment and prediction. 2. E stimate fluctuations in precipitation, including extreme lows and highs, and move away from reliance on mean annual precipitation values. 3. U nderstand the hydrological response from waste facilities following high rainfall events (seepage flows and their assimilation into receiving environments). 4. E ffectively communicate residual uncertainty and potential implications of mine waste and water management to stakeholders, including sample representation, scaling laboratory results to field-scale waste facilities, and acid-onset timeframes. 5. U tilise new technologies, such as automated samplers, drones, and telemetry, to eliminate the need for personnel to access waste facility or discharge sites in times of extreme heat or flood. 6. M ake the link between business risk and climatechange adaptation by encouraging stakeholders to invest in upfront minewaste characterisation and water-quality prediction, to allow informed wastemanagement decisions prior to closure.

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MINING SERVICES

Vocus’ LEO satellites will complement its fibre infrastructure.

CONNECTING THE DOTS To enable the mining industry’s transition to cloud-based technology, Vocus Group is developing fibre network cables and satellite technology to improve connections in remote areas.

ustralia is home to hundreds of mining leases that are being mined and explored across northern and Western Australia. But border closures and fly-in, flyout (FIFO) travel bans due to COVID-19 restrictions have impacted the ability of mining companies to source skilled workers. This is shifting many companies further towards automated and virtual means of conducting mining and exploration activities. However, these technologies require a fast and low-latency network connection, which is costly and often unavailable in remote mining areas. Vocus is developing multiple solutions to get rural mining areas up to speed through capable fibre network connections and satellite internet technology. “Smaller mining companies are going to want to be highly leveraged around their cloud infrastructure,” Vocus national general manager government and special projects Michael Ackland tells Australian Resources & Investment. “Rather than smaller miners buying their own servers, they adopt ‘pay as you use’ servers, which are currently based on

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Australia’s east coast.” Vocus’ Darwin-Jakarta-Singapore Cable will allow mining companies to hook up their cloud infrastructure to Singapore rather than Melbourne or Sydney, which will improve both latency and cost. It will be the first international cable connection into Darwin and amps up the connectivity of much of northern Australia through stronger fibre infrastructure. Vocus is also developing Project Horizon, which will deliver fibre infrastructure from Geraldton to Port Hedland, and then on to Singapore via the Darwin-JakartaSingapore Cable. The company expects these projects to strengthen the internet connection in remote regions of Western Australia significantly. To complement its fibre services, Vocus is investing in LEO (low earth orbit) satellitebased telecommunications. In 2021, Elon Musk’s company SpaceX launched its Starlink satellite internet in a beta phase to Australian customers, which has delivered higher download and upload speeds that outclass fixed wireless connections. The technology was also hailed as a

breakthrough for delivering internet to areas without fixed-line connections, a situation northern Australia has struggled with. Rather than relying on fixed cables, LEO technology will provide an internet connection anywhere where the sky is visible. For mining companies, there is a strong value incentive to such a technology. According to Ackland, mine sites have been deploying edge computing systems to enable more remote operational capabilities. Edge computing is conducted on site to deliver enough processing power to run remote operations across a mine operation. The need for edge computing has grown during the COVID-19 pandemic as more operations require remote access. However, this can be costly, with Vocus’ “as a service” approach for satellite internet allowing mining companies to save costs and rely on the cloud rather than expensive edge technologies. “We’ve seen a lot of emergency deployments of edge computing where people are putting server racks inside shipping containers and pumping energy into them to keep them cool,” Ackland says. “From a mining perspective, you’ve

MINING SERVICES

got to have reliable low latency high-speed secure connectivity. “Those are the keys to be able to move things away from the edge in terms of the amount of personnel you need to have in potentially high-risk situations – or indeed with COVID – moving people in and out has become more difficult, and the more it can be done remotely the more we can keep production running.” Vocus’ vision for LEO satellites is for them to complement fibre infrastructure through satellite ground stations. The company is a founding partner and shareholder in Australian-based and run Quasar Satellite Technologies, which will deliver the “ground stations as a service” offering. “The fibre network that we’re deploying in WA is going to allow for the creation of satellite earth stations,” Ackland says. “Those satellite earth stations are going to need to be within 500 kilometres of the point you’re trying to get communications.” Ackland says the satellite ground stations need to be connected to fibre. For satellite providers, the industry-first Quasar phased array antenna will allow multiple satellite companies to leverage the same ground station infrastructure. By bringing Quasar’s technology together with Vocus’ fibre infrastructure projects, the company is preparing to provide mining companies with a reliable, stable and lowbandwidth connection. This will cut costs and deliver stable internet by preventing the need for bespoke ground infrastructure. “What we’re seeing with LEO technology is improved connection to satellite services,” Ackland continues. “For mining companies, you could effectively pull this out of your truck, power it up and have the ability to feed data or have it analysed live through your connection to cloud.” The next wave of mining operations will adopt more smart technology, including autonomous haulage and real-time analysis. Autonomous equipment relies on a strong internet connection to maintain full control over driverless vehicles at a mine site. Even mineral explorers conducting drilling campaigns can benefit from stronger telecommunications capabilities. Drilling campaigns usually rely on manually putting data on a hard drive for future analysis. But with hard border closures remaining an ongoing issue, LEO technology enables explorers to instead process drilling results in real time.

The mining companies of the future also plan to take advantage of artificial intelligence (AI) and augmented reality (AR) technologies, which are becoming essential to more efficient maintenance practices along with off-site processing of drilling information. “If you were conducting a drilling campaign with LEO technology you could have live feeds going back to data processing,” Ackland says. “This allows for a far more real-time approach for where it is best to drill; that interactivity is going to lead to more accurate finds and more accurate campaigns. “AI has the ability to compute vast amounts of information, such as analysing drilling data while you’re still out in the field, so you can imagine the benefits of doing that while mobilised, such as an improvement in the productivity of searching resources.” Vocus is receiving strong backing from the mining industry for the installation of fibre networks and LEO technology. Companies are aware that this infrastructure will increase their ability to unlock more productivity and efficiency in some of Australia’s most significant mining regions. Vocus’ network operations centres also feature a high level of security to ensure its services are safe, private and reliable. “The bottom line here is that a lot of this operational technology that is being

Vocus is improving connectivity by installing fibre networks.

deployed, until now, has been almost exclusive to the bigger end of town,” Ackland says. “A combination of LEO and fibre network competition is going to change the game for these junior miners. “Things are about to get a lot cheaper in terms of their ability to access and leverage this technology and it is quite an exciting time in telecommunications development for mining sector.” As the world evolves alongside technology, Vocus is working hard to to connect remote areas of Australia to future opportunities through internet services that drive down costs and time.

Vocus plans to connect parts of Western Australia and the Northern Territory to Singapore with fibre cable.

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WORKFORCE MANAGEMENT

Forking out future wealth True Wealth Investment’s digital approach to superannuation and insurance allows workers in remote regions to restructure their investment portfolios without leaving site.

Left to right: Jesse Mitchell-Malik, Jeremy Milsome, O’Neil Cole, Elizabeth Sawyer, Connor Samios, Alexander McWilliams and Mitchell Eynaud.

ith the demands of fly-in, fly-out (FIFO) rosters, many mine workers in Australia spend weeks to months away from home at a time. Interstate border closures due to COVID-19 restrictions have also increased the periods workers have been forced to spend away at work over the past 18 months. This has created challenges for them to maintain their personal and family goals, including the time they need to set up financial plans. When the average Australian retires in their 60s, their superannuation is what they will then rely on to fund their twilight years. Yet a 40-year career can convolute this process, with different superannuation funds accumulating as workers switch between jobs. To combat this issue, financial planning groups that require in-office consultations are often regarded as the solution. However, for young mine workers needing to organise their super, finding time outside of their FIFO roster to schedule a

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consultation can be difficult. Financial planning group True Wealth has developed a method to assist miners to organise their super, alleviating this challenge for many workers in the industry. In 2018, the company was built from the ground up as a digitally focussed organisation that primarily conducts client meetings by phone or webcam. This opened the door for Australians across the country to access True Wealth’s superannuation and insurance services, even at remote mine sites. True Wealth allows its clients to achieve financial goals by creating a superannuation and insurance policy that fits their individual requirements. “What we strive to do is provide an over the phone and simple service fully transparent and at the same time efficient,” True Wealth director Alexander McWilliams Australian Resources & Investment. “People don’t have spare time these days – everyone has busy lifestyles. “In our business model we don’t focus on

face-to-face meetings with clients as we have a nationwide client base. We are using the best technology out there at the moment to provide a fully traditional service in a more streamlined and simplified way.” True Wealth’s digital focus has allowed the company to provide its services throughout the COVID-19 pandemic, preventing any impact to how it deals with clients across Australia. The company’s system enables it to reach workers located outside of capital cities, helping them to get their superannuation on track through a phone call. True Wealth can conduct research for its clients to build a plan and strategy to achieve long-term financial goals with their superannuation and insurance policies. “It means consolidating the funds to one account, identifying a client’s risk profile and then tailoring an insurance policy to their needs,” McWilliams says. “We help manage it for them ongoing, so they’ve always got us keeping an eye on it.” According to the ABS, Australia’s

AUSTRALIAN RESOURCES & INVESTMENT

True Wealth can assist clients across Australia.

mining industry employs around 278,800 people, who earn a median weekly wage of approximately $2325 per week, making it vital for them to set aside enough funds for their future with the right superannuation investments. Having multiple funds remains a common issue for mine workers, however, with many losing money by paying multiple platform fees. This often results in the account holders losing track of where their money is going and what it is being invested into through superfunds. McWilliams says many people do not have a strong understanding of the total amount of capital in their superannuation. “There’s more than 500 superfunds to choose from, so some funds are going to be better than others and that’s essentially something they don’t know,” McWilliams says. “They don’t know the risks they’re taking with those investments, the insurance they’re covered for or their investment returns.” Operating on a case-by-case basis, True Wealth can build an investment portfolio through a superfund that caters to client objectives. For instance, younger workers may opt to take higher risk investments, while workers closer to the retirement age would take a more moderate or conservative approach. True Wealth Investment’s digital focus also allows the company to direct more availability to its client base, which mostly comprises blue-collar workers.

True Wealth director Alexander McWilliams.

“In terms of services, we offer a typical financial planning offering but it’s how we execute it that separates us. We always have people that can offer assistance at any time during business hours,” McWilliams says. “Understanding financial talk you might be very overwhelmed, we know how to break that down in the simplest terms so anyone can understand and it make sense.” Rather than scheduling in-office appointments, True Wealth’s over-the-phone services allows its consultants to easily conduct advisory work related to super or

insurance policies, including life insurance, total and permanent disability, trauma and income protection. Updates or changes to accounts can then be completed in a shorter timeframe, allowing mine workers to focus on their job rather than organising appointments for where to invest their super. True Wealth assisted one client who had six super funds and three active insurance policies scattered across multiple accounts. By conducting a free lost super check, McWilliams says True Wealth organised the super accounts and tracked down lost capital through superannuation accounts. “We were able to educate the client on their circumstances and identified they had three different life insurance policies held across three of their superfunds,” he says. “We educated them about how they were paying unnecessary fees for expensive and outdated platforms and investment options that weren’t catering to their goals and objectives. “We were able to come in and recommend consolidating the funds and set up one tailored insurance policy so that the client had a portfolio that matched their needs, putting them into a portfolio that matched their tolerance to risk.” As the world faces unprecedented economic volatility, people must ensure that their financial future is secured. True Wealth’s digital-only approach provides access to services that allow everyday Australians to achieve their financial goals.

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FOLLOW THE LE ADERS

FOLLOW THE LEADERS

THE LATEST EXECUTIVE APPOINTMENTS Keep up to date with the latest executive movements across the mining sector, including Woodside Petroleum, OceanaGold and Breaker Resources. Woodside Petroleum has made Meg O’Neill the company’s permanent chief executive officer and managing director following her work as acting chief executive officer. O’Neill succeeds Peter Coleman who retired from Woodside in June 2021. She first joined Woodside in 2018 and has helped lead the Scarborough and Sangomar developments in her time as acting chief executive officer. O’Neill said the development of Woodside’s merger with BHP’s petroleum business is high on the agenda. “My focus will be on delivering the significant benefits expected from the merger of Woodside and BHP’s petroleum business and continuing to reduce costs and carbon while delivering Woodside’s current projects and production,” O’Neill said. OceanaGold president and chief executive officer Michael Holmes has resigned from his role and the board of directors. Holmes started his career with OceanaGold as chief operating officer in July 2012. Chief operating officer Scott Sullivan will temporarily fill the role as acting president and chief executive officer. Sullivan has 30 years’ experience as a mining executive in operations across Australia, Papua New Guinea, Africa and

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North America. OceanaGold chairman Ian Read will also be succeeded by Paul Benson from October 1. The company is in talks with an executive search firm to find a replacement for the president and chief executive officer roles. Breaker Resources has appointed Peter Cook as non-executive chairman, replacing executive chairman and Breaker founder Tom Sanders, who will move into the managing director role at the company. Cook brings 35 years’ experience in exploration, project, operational and corporate management of mining companies and currently serves as non-executive chairman of Westgold Resources, Castille Resources and Titan Minerals. He has founded and served as managing director and chairman across multiple mining boards in the past two decades and also supported gold and base metals miners and developers. “(Cook) has a great mix of skills and his appointment enhances the governance structure of the board. As a result, Breaker has strengthened its key skills and experience spanning geology, mining, business development, operations and capital markets as it embarks on its next phase of growth,” Sanders said. Prior to Cook’s appointment, he

was granted two million unlisted options through Breaker’s incentive option scheme. Metals X chief executive officer Michael Spreadborough has resigned from his role as chief executive officer. The decision follows the sale of Metals X’s nickel and copper assets to steer the company towards growing its tin assets. Metals X stated it would not replace Spreadborough’s role “at this time” due to the divestment of its assets earlier this year. In May, the company said its primary focus was the 50 per cent joint venture at the Renison Tin operation in Tasmania with Yunnan Tin Group. Metals X sold its copper portfolio to Cyprium Metals for $60 million in February, including the Nifty copper operation in Western Australia. Peak Minerals has appointed Jennifer Neild as chief executive officer of the company. Neild has more than 15 years’ experience in mineral exploration and has worked in geology, geophysics and corporate roles. She has previously worked for Xstrata Nickel, Newmont Australia and HiSeis. Neild is accredited with an honours degree in geology from Laurentian University in Canada and a masters

AUSTRALIAN RESOURCES & INVESTMENT

degree in exploration geophysics from Curtin University in Perth. Neild said the role would allow her to help advance the company’s Greenrocks project in Western Australia. “Given Peak’s recent success with multiple zones of intrusive magmatic copper being identified within the company’s recently consolidated Greenrocks project in Western Australia,” Neild said. “The role provides the opportunity to continue to build and validate the existing geological model’s success within the emerging new copper province.” Mineral Commodities has appointed Jacob Deysel as the company’s chief executive officer from October 4, 2021. Deysel has held senior executive positions in the mining industry with close to 20 years’ experience in the heavy minerals industry. He previously served as vice president of the Uranium Energy Corp’s titanium division and general manager of Rio Tinto’s Richards Bay Minerals. The appointment will mark the end of Russell Tipper’s role as acting chief executive officer. Mineral Commodities chairman David Baker said Deysel has deep understanding and experience in Africa’s mineral sands industry, which relates to the company’s global assets.

Kinetiko Energy has appointed Nick de Blocq as the new chief executive officer of the company. The company acquired Afro Energy this year, with de Blocq expected to bring oil and gas operational and technical expertise. According to Kinetiko, the new chief executive officer’s appointment will drive strategic growth following the merger and acquisition with Afro Energy. Kinetiko executive chairman Adam Sierakowski said the appointment of de Blocq would advance the company’s ambition of becoming a major energy source in South Africa. “The company is strongly poised in the current domestic and global energy market to aggressively pursue its strategy to become a leading clean energy source in South Africa, and Nick’s appointment is highly complementary to our strategy,” Sierakowski said. Aurelia Metals has appointed Peter Botten as non-executive director of the board. Botten has also accepted an invitation to become chairman of the board following the company’s annual general meeting in November. Botten previously served as managing director of Oil Search for more than 25 years before retiring in February 2020. He is renowned for transforming the business into a major global energy

company with experience across the global oil and gas industry. Botten also holds strong experience in the resources companies and is currently non-executive chairman of AGL and Karoon Energy. According to Aurelia interim nonexecutive chairman Susie Corlett, Botten will bring valuable skills to Aurelia’s growth strategy. Aurelia’s annual general meeting will be held on November 4, 2021. Former Saracen and Northern Star boss Raleigh Finlayson is set to become managing director of Genesis Minerals following his contribution to a $20.8 million equity raising by the company. As part of a board restructure, current managing director Michael Fowler will remain at the company until Finlayson takes over in March 2022. Genesis has also appointed former Fortescue Metals Group managing director and chief executive officer Neville Power as a non-executive director of the company’s board. “Raleigh is a highly successful gold miner with an exceptional track record of creating value for shareholders, growing Saracen from a junior explorer and developer into a $6 billion company at the time of its merger with Northern Star,” Genesis non-executive chairman Tommy McKeith said.

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EVENTS

IRON OR E CON FER ENCE | PERTH A N D ON LIN E | N OV E M B E R 8 -10

AusIMM and the CSIRO will hold an iron ore conference to explore the latest developments in the industry and where iron ore will look to expand into the future. Current and future challenges in iron ore will be addressed along with discussion on genesis, geology, exploration, mining and processing of iron ores. Attendees will get the opportunity to listen and learn from global industry leaders. These keynote speakers will include University of Melbourne professor of engineering Robin Batterham, former Roy Hill chief executive officer Barry Fitzgerald, Minerals Research Institute of Western Australia chief executive officer Nicole Roocke, and Fortescue Metals Group director sustainability and corporate affairs Alison Terry. The hybrid event will allow attendees to view content for up to three months online at any time, while making the conference in-person will allow for important networking opportunities. • ausimm.com/conferences-and-events/iron-ore/ AU S T R A L I A N G O L D C O N F E R E N C E | S Y D N E Y A N D O N L I N E | N OV E M B E R 1 7-1 9

The Australian Gold Conference will take place across three days in 2021 at Crown Sydney, kicking off with an ‘Introduction to Gold’ event hosted by The Perth Mint on November 17. From there, a two-day investment and educational symposium will be held – bringing together every aspect of the precious metals investment industry to promote and help educate everyday Australians, as well as those already invested in the sector. Keynote speakers will present their investment views and look at how we can grow and protect our wealth going forward. Bullion dealers will be on hand to help you understand how and when to purchase physical metals, while ASX-listed mining companies will provide updates on mining investment opportunities. With global debt of more than $280 trillion, and money being printed left, right and centre, it’s never been a more important time to learn how to grow and protect your wealth. The Australian Gold Conference will help attendees with that. • goldindustrygroup.com.au/events/industry-event-2021australian-gold-conference I N T E R N AT I O N A L M I N I N G A N D R E S O U R C E S C O N F E R E N C E ( I M A R C) | M E L B O U R N E | J A N UA RY 3 1 F E B R UA RY 2 2 02 2

After going virtual last year, IMARC returns in 2022 with a hybrid event – welcoming thousands of guests from Australia and overseas, in-person and online. More than 130 countries will participate in Australia’s most influential mining event, with over 200 exhibitors and 70 hours of networking opportunities to take advantage of. The event encompasses a three-day conference diving into topics of exploration, investment,

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production optimisation technology and global opportunities. Additionally, the expo floor will cover 13,000 square metres to accommodate the bigger-and-better machinery and equipment on show this year. Tickets range from free passes through to premium delegate passes, so visit the site below to book your spot now. Please note, IMARC has been postponed from its original dates in 2021 to next year due to the impact of COVID-19. • imarcglobal.com AU S T R A L I A N B U L K H A N D L I N G AWA R D S | M E L B O U R N E | F E B R UA RY 1 7 2 02 2

The Australian Bulk Handling Awards return in 2022, welcoming the sector’s esteemed and emerging to come together and celebrate the outstanding achievements from across the past two years. With prior events postponed, finalists from both 2020 and 2021 will be recognised at the 2022 event. Awards to be announced include Supplier of the Year, Bulk Handling Facility of the Year, Best Practice in Safety, and Dust Control Technology, Application or Practice. Taking place on February 17, the gala dinner will coincide with the Australian Bulk Handling Expo in Melbourne – a three-day event that encompasses the entire bulk solids handling industry. The Australian Bulk Handling Expo is supported by the Australian Society for Bulk Solids Handling (ASBSH), which will host an industry conference, while the trade expo will showcase the latest in bulk materials handling equipment and technologies. • bulkhandlingawards.com.au I N T E R N AT I O N A L M I N I N G G E O L O G Y C O N F E R E N C E 2 02 2 | B R I S B A N E , S Y D N E Y, M E L B O U R N E , A D E L A I D E A N D P E R T H | M A R C H 2 2 -2 3 2 02 2

AusIMM’s International Mining Geology Conference will focus on maximising orebody value and increasing productivity through mining geology. Hosted both in-person and online, the event will bring geologists, consultants, decision makers, metallurgists, engineers, professionals and students together to explore new techniques and emerging technologies to enhance operations. The conference will feature keynotes, a high-quality technical program, exhibition, virtual booths, interactive workshops and mine site tours. Attendees can also network both in-person and virtually through a networking function, conference dinner, discussion groups and on-demand content. This includes Geologize chief executive officer and founder Haydon Mort, who last year launched an on-demand training course, Practical Geocommunication, which teaches geoscientists how to connect with the public to encourage positive perceptions of the field. • ausimm.com/conferences-and-events/mining-geology/

Connecting mining corporates with international investors

ines and Money is the leading international event series connecting sophisticated investors from around the world with mining company management teams both online and in-person. With an unrivaled network of thousands of international investors, the events are the place where professional investors meet exciting explorers on the cusp of the next big discovery, near-production development companies and cash generative producers to discuss their next big mining investment.

You’ll identify your next investment opportunity at an upcoming Mines and Money event by connecting with the senior management teams of mining companies. You will be able to assess and compare a range of mining companies from around the world, with projects across the commodity spectrum, and at all stages of the life cycle. Mines and Money events are free to attend for qualiﬁed investors. By pre-qualifying your investment needs, you will only be matched with mining companies that meet your criteria. Giving you a higher return on your time with meaningful meetings that will create long-lasting relationships, leading to more deals and opportunities.

Mines and Money events are scheduled to take place in-person, and online, in numerous cities and time zones around the world. There are a number of ways you can get involved in a Mines and Money event, from accessing content, to scheduling meetings and delivering presentations.

UPCOMING EVENTS:

19 - 21 October 2021

LONDON 1 - 2 December 2021

ONLINE CONNECT 25 - 27 January 2022

IMARC 31 January - 2 February 2022

Visit minesandmoney.com to register your free pass and join us online

A SMALL STEP ON OUR PATH TO CHANGE

FROM 2021, ALL CASTROL PRODUCTS WE SELL IN AUSTRALIA WILL BE

COMMITTED TO CARBON NEUTRALITY IN ACCORDANCE WITH PAS 2060** A SMALL STEP TOWARDS A MORE SUSTAINABLE FUTURE

* **

in accordance with PAS 2060, see www.castrol.com/cneutral for more information. The C02e emissions are calculated in accordance with the Greenhouse Gas Protocol’s Product Life Cycle Standard and includes life cycle emissions. The demonstration of carbon neutrality will be assured by an Independent Third-Party and certified to BSI’s PAS 2060 carbon neutral specification. See www.castrol.com/cneutral for more information.