4 RIU EXPLORERS EVENT GUIDE FEBRUARY 14, 15 &16 MARKET INSIGHTS
MARKET INSIGHTS Decarbonisation STAY UP-TO-DATE AT STOCKHEAD.COM.AU gives battery metals market a positive jolt Net zero emissions targets are driving a 'mega' investment in battery metals BARRY FITZGERALD
Association of Mining and Exploration Companies CEO Warren Pearce
Exploration still going strong JOSH CHIAT
Despite market pessimism on the back of inflation, interest rate rises and recessionary fears in the back half of last year, Australian mineral exploration continued to thrive. According to BDO, Appendix 5B reports from ASX-listed explorers suggest more money was spent drilling in the September quarter than at any point since its Quarterly Explorer Cash Update was introduced in 2013. Australian Bureau of Statistics figures back that up, showing $1.0849 billion was spent on exploration in a September quarter that eclipsed the record expenditure set in the June 2012 quarter – the height of the China-led mining and investment boom.
critical minerals over the last six to 12 months; it's been much more noticeable in some of those other minerals, like rare earths, in the last six,” Association of Mining and Exploration Companies CEO Warren Pearce told Stockhead. “I think that's largely because of significant investor interest and, particularly, a better understanding in the industry about the significant amount these minerals are going to be required for the EV revolution and renewable technologies.”
WA REMAINS ON TOP When it comes to exploration and mining, Western Australia has proven itself over time to be the luckiest part of the “Lucky Country”. Spending in WA hit an alltime high of $692.4 million in the September quarter, almost 70% of the national total, with Queensland BATTERY METAL HUNTING seeing its biggest quarterly spend Many commentators believe we since 2012 at $156 million. are on the cusp of a very different Greenfields exploration, generally commodity cycle, one fuelled by considered riskier than brownfields energy transition metals – think lithium, copper, nickel, manganese, work around existing mines, was seemingly prioritised. graphite and more. Greenfields spend rose from ABS data shows drilling spend for $314.9 million in the June quarter “selected base metals” in Australia, to $344.9 million in the September comprising EV metals like nickel quarter, with brownfields drilling and copper, rose to a record $267 spend falling slightly to $740 million. million in the September quarter. While brownfields exploration The “other” field, which includes retained a larger share of the pie, lithium, graphite and rare earths, Pearce said the amount committed saw spending up 36.6% QoQ and to unexplored areas was “extremely 69.5% YoY to $140.7 million. encouraging”, with critical mineral “We've certainly seen a support a major factor. significant pivot towards battery
Battery metals have started off 2023 with a bang thanks to easing inflation and interest rate pressures, and China’s rebound from COVID lockdowns. The improving economic backdrop adds to the already powerful thematic behind the rise of investor interest in battery metals because of their key role in global decarbonisation. Decarbonisation through electrification is metal intensive. So much so, a “mega” investment cycle in new supply capacity is required to meet 2050 net zero emissions targets. And to encourage the required investment, there will have to be an attendant increase in metal prices. There is simply no other way if the supply challenge is to be met. It is an unprecedented supply challenge, too. As the International Energy Agency explains, lithium, nickel, cobalt, manganese and graphite are crucial to battery performance, longevity and energy density. Rare earth elements are essential for permanent magnets that are vital for wind turbines and electric vehicle motors, and electricity networks need a huge amount of copper and aluminium, with copper being a cornerstone for all electricity-related technologies. BHP sees the need for nickel output to lift fourfold and copper twofold in the next 30 years, while Rio expects lithium demand could grow sevenfold before 2030 – all in pursuit of net zero emissions by 2050.
Rare earth elements are essential for wind turbines
Barry Fitzgerald
“BHP sees the need for nickel output to lift fourfold and copper twofold in the next 30 years, while Rio expects lithium demand could grow sevenfold before 2030” Other battery metals and green energy minerals, such as zinc and silver, along with the steel required for the clean energy infrastructure build-out, also stand to benefit from the decarbonisation push. The full suite of battery materials are connected to the low emission technologies the world is banking on as it sets about decarbonising energy and transport. Last year, the US government alone committed to spending US$370 billion on clean energy projects over 10 years. There was also another US$131 billion committed globally to
new battery gigafactories on Benchmark Minerals Intelligence estimates, taking the commitment in the last four years to US$300 billion. Each gigafactory needs to secure the requisite battery metals. The resultant cornucopia of opportunities in the clean energy/battery metals space has reenergised the junior explorers and developers sector on the ASX. Gold has long been the dominant focus of the junior brigade. But now there is a growing band of juniors focused on the battery metals space. Some have already made the transition to major mining company status on the back of the thematic. The transitions achieved to date have primarily been in the lithium sector. Lithium producer Pilbara Minerals (ASX:PLS) is a prime example, thanks to its march from penny dreadful status in 2014, when it first went looking for lithium, to the $13 billion company it is today. New mine developments in copper, nickel, manganese, graphite and other battery metals and minerals are also in the offing