Australian Resources and Investment Apr 2022

VOLUME 16 NUMBER 2 | 2022

Australian Resources & Investment MINING’S NEXT MEGA-CITY

THE NEXT BIG RARE EARTHS PLAYERS

MAKING SENSE OF THE WORLD AROUND US

Australia’s bright future

9 772201 996000

ISSN 2201-9960

$14.95 incl. GST

03

IN PLATINUM

CREATING A CURRENCY OUT OF ESG

Connecting assets, systems and people

United. Inspired.

Explore our innovation in mining We believe that innovative mining technologies such as automation, interoperability and digitalisation tools are the future of our industries. And at Epiroc, the future of smart mining is already here with a full suite of complimentary products and services. So why not connect the unconnected for a smarter, integrated operation that increases efficiency?

epiroc.com/en-au

AUSTRALIAN RESOURCES & INVESTMENT

COMMENT

Turning challenges into opportunities PAUL HAYES Paul.Hayes@primecreative.com.au

I

As the resources industry encounters fresh challenges, harnessing adversity as a vehicle for growth can build company strength and lead to significant gains.

t’s not often that geopolitical crises permeate the pages of Australian Research & Investment, but recent global events are so significant that they’ve become part of everyday dialogue.

The effects of the Russia–Ukraine war have stretched across the globe and Australia has not been immune.

From a destabilised nickel market to skyrocketing fuel prices, the most significant European military conflict since World War II has spread its tentacles into a multitude of industries.

Speaking at the Australian Financial Review Business Conference in early March, BHP chief executive Mike Henry examined opportunities for the resources industry in the face of everchanging global events.

Henry broke down the Russia–Ukraine conflict and how it will affect commodities, emphasising businesses that can wisely manage cost pressures will be best placed amid the uncertainty.

While soaring oil prices dominated headlines amid Russia’s invasion of Ukraine, perhaps less considered is the conflict’s potential impact on oil in the medium term and whether Western countries rethink energy policies as the international order is reshaped.

In our ‘featured’ section, we explore the rise of Liontown Resources and how mining’s next megacity will play a critical role in an ever-advancing lithium sector.

We dive deep into Australia’s emerging platinum group elements (PGE) industry and catch up with Chalice Mining managing director and chief executive officer Alex Dorsch to see how the Julimar nickelcopper-PGE project is coming along.

We also spotlight Caspin Resources and Western Mines Group’s burgeoning PGE prospects.

When the mining industry considers Australia’s rare earths play, many identify Lynas Rare Earths and stop there. However, there are a host of emerging rare earths projects looking to come online in the next few years.

We take a closer look at Arafura Resources’ Nolans neodymium-praseodymium project in Northern Territory and Australian Strategic Materials’ Dubbo project in New South Wales, which are aiming to commence production in 2024 and 2025, respectively.

SRK Consulting advises readers on the ongoing climate change risk and how mining companies should prepare for the worst when it comes to extreme weather events. It’s not only about safety, but also economic opportunity.

In the environmental, social and governance (ESG) sphere, Epiroc and MineRP have developed a groundbreaking solution that creates a currency out of ESG, enabling mining companies to convert their ESG performance into a transactional form.

To cap things off, we explore the upcoming APPEA 2022 Conference and Exhibition coming to Brisbane in May and shine a light on all the big executive movements over the last few months.

Paul Hayes Managing Editor

CHIEF EXECUTIVE OFFICER JOHN MURPHY PUBLISHER CHRISTINE CLANCY MANAGING EDITOR PAUL HAYES Tel: (03) 9690 8766 Email: paul.hayes@primecreative.com.au ASSISTANT EDITOR TOM PARKER Email: tom.parker@primecreative.com.au CLIENT SUCCESS MANAGER JUSTINE NARDONE Tel: (03) 9690 8766 Email: justine.nardone@primecreative.com.au SALES MANAGER JONATHAN DUCKETT Mob: 0498 091 027 Email: jonathan.duckett@primecreative.com.au BUSINESS DEVELOPMENT MANAGER ROB O’BRYAN Mob: 0411 067 795 Email: rob.obryan@primecreative.com.au SALES ADMINISTRATOR EMMA JAMES Tel: (02) 9439 7227 Mob: 0414 217 190 Email: emma.james@primecreative.com.au DESIGN PRODUCTION MANAGER MICHELLE WESTON michelle.weston@primecreative.com.au ART DIRECTOR BLAKE STOREY blake.storey@primecreative.com.au GRAPHIC DESIGNERS KERRY PERT, AISLING MCCOMISKEY FRONT COVER IMAGE CREDIT: Chalice Mining SUBSCRIPTION RATES Australia (surface mail) $120.00 (incl GST) Overseas A$149.00 For subscriptions enquiries please contact (03) 9690 8766 subscriptions@primecreative.com.au PRIME CREATIVE MEDIA 11-15 Buckhurst St, South Melbourne, VIC 3205, Australia www.primecreative.com.au © Copyright Prime Creative Media, 2021 All rights reserved. No part of the publication may be reproduced or copied in any form or by any means without the written permission of the ­publisher.

PRINTED BY MANARK PRINTING 28 Dingley Ave Dandenong VIC 3175 Ph: (03) 9794 8337 Published 12 issues a year

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

–3–

CONTENTS

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

6

Concerning long-term

12

outlook for oil prices

F E AT U R E D

10 12 16

Analysis with Regina Meani Mining’s next mega-city Australia’s platinum future GOLD

32

IRON ORE

44

and to society

RARE EARTHS

20

Gold’s contribution to portfolios –

steel opportunity

The next big players ESG MINING SERVICES

24

Hawsons Iron’s green

34

46

of ESG

Climate change and mine waste management

Creating a currency out

FOLLOW THE LEADERS

38

The latest executive moves in the resources sector

Sustainability infused with digital expertise

40 28

Making sense of the world around us

Disproportionate impact of decarbonisation

BHP

42

Conquering ESG from all angles

EVENTS

48 50

Spotlighting APPEA 2022 What’s happening in the resources industry?

44

–4–

A SMALL STEP ON OUR PATH TO CHANGE

FROM 2021, ALL CASTROL PRODUCTS WE SELL IN AUSTRALIA ARE

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.

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

THE

Featherstone REPORT

CONCERNING LONG-TERM OUTLOOK FOR OIL PRICES

BY TONY FEATHER STONE

Supply constraints could underpin higher energy prices for longer.

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 March 9 2022.

–6–

AUSTRALIAN RESOURCES & INVESTMENT

T

he soaring oil price dominated recent headlines as Russia’s invasion of Ukraine continued to intensify. Often less considered has been the conflict’s potential impact on oil in the medium term and if Western countries rethink energy policies as the international order is reshaped.

As I write this column (in early March), Brent crude oil futures are settling near $US130 a barrel in London. That’s almost double the price in March 2021. Brent crude was up almost $US30 a barrel since Russia invaded Ukraine and is heading higher.

Some investment banks tipped oil prices above $US180 in a drawn-out conflict.

In March, the US and the UK banned imports of Russian oil, gas and coal.

The energy supermajors – Shell, BP

An escalating oil price is a huge tax on the global economy and a driver of higher inflation.

and ExxonMobil – exited their Russian operations as part of a broader exodus of Western companies from Russia.

On equity markets, the S&P Global 1200 Energy Sector Index, a barometer of 47 of the world’s largest energy companies, returned 42% in 2021. On a year-to-date basis, the index rose a staggering 22% to end-February 2022.

In Australia, Woodside Petroleum, the market’s largest oil stock, has a total return (including dividends) of 48% over 12 months, Morningstar data shows.

Investors who bet on oil equities in 2020 have benefited from the market’s bestperforming sector. How long those gains will last is unclear. An escalating oil price is a huge tax on the global economy and a driver of higher inflation.

Inflation was a growing market concern before the Russia–Ukraine war.

After decades of low inflation and falling government bond yields, markets became complacent about the risk of rising wage and input costs. Some economists argued that high inflation was a transitory response to supply-chain bottlenecks during the pandemic.

In January, US inflation was 7.5% – the highest in 40 years. Eurozone inflation that month was a record 5.8%.

In Australia, the average price for a litre of unleaded fuel in March was above $2 in some cities. Higher fuel costs mean higher transport costs and rising prices for food and other products. Australian inflation will also climb.

Financial markets hate uncertainty, something Russian President Vladimir Putin has been providing in spades. By early March, Russia’s invasion had been less effective than the Kremlin anticipated because of effective Ukrainian resistance.

Harsh economic sanctions and the promise of more to come inflamed Russia.

As pressure for a no-fly zone over Ukraine built, Russia warned of “terrible consequences” for its enemies. With talk of Poland supplying fighter jets to Ukraine, there was speculation that Russia could target Poland or other European countries.

As I write, it’s impossible to determine Putin’s endgame or how the invasion will play out. What seems clear is an elevated oil price for some time and possibly a higher oil price if the conflict is longer and more widespread than markets have priced in.

If that happens, energy-sector investors might take some profits. If the oil price rises too far, equity markets will react violently, fearful of an inflation crisis. A larger correction in global equity markets,

including energy stocks, is possible.

In the short run, Australia’s economy will benefit from higher energy and commodity prices and the emergence of a commodities supercycle. But those gains may not last for long if high inflation forces some central banks to lift interest rates sooner and more aggressively than markets expect.

ENERGY-SECTOR GYRATIONS Oil stocks have been a remarkable rollercoaster ride in recent years.

The S&P 1200 Energy Index had drifted lower between 2014 and 2020, underperforming most sectors. Fossilfuel producers lost favour as investors favoured clean-energy companies.

In March 2020, the index almost halved as markets feared the pandemic would spark global recession and sharply lower energy demand. At its 2020 low, the index traded below 200 points; it traded near 600 points in March 2022 as the oil price soared.

Key developments for oil occurred during this time. The first was the rise of institutional investors that use environmental, social and governance (ESG) factors in investment decisions.

Pension funds and other institutions increasingly reduced their exposure to fossil-fuel sectors in response to climatechange risk.

The boom in shareholder activism accompanied this trend. In 2021, an activist hedge fund in the US successfully had three directors installed on ExxonMobil’s board. The tiny fund garnered the support of giant index funds that own more of Exxon’s stock.

Governments, too, have increased pressure on oil producers. The Hague District Court in the Netherlands last year ordered Shell to reduce its carbon dioxide emissions by 45% to 2030 (compared to 2019 levels).

Growing pressure from financial markets and governments will increase the cost of capital for supermajors and smaller energy companies, making it harder for them to maintain their exploration levels, reserve base and production.

Even without this pressure, oil production and reserves from the oil supermajors have declined over the past 20 years despite higher capital investment, notes Goehring & Rozencwajg, an investor in natural resources and an insightful energy commentator.

The long-term story could be one of constrained oil supply from nonOPEC (Organization of the Petroleum

–7–

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

The Russia–Ukraine conflict could have long-term ramifications for the energy markets in much of Europe.

An escalating oil price is a huge tax on the global economy and a driver of higher inflation.

Exporting Countries) countries as global energy demand rises.

Put another way, a faster-than-expected transition from fossil fuels to renewables could increase the West’s reliance on OPEC energy producers, according to Goehring & Rozencwajg, at a time when global security risks are rising.

CRUCIAL DECISION Western countries have big decisions to make on energy security as Russia tries to reshape parts of Europe. Speculation is rife that China (Russia’s ally) could invade Taiwan in the next few years, prompting a military conflict that would draw in the US and its allies.

Clearly, as Russia and China attempt to create a new world order by reducing

–8–

American power, the rise of autocracies is becoming a bigger risk.

Germany and other European countries that are aggressively decarbonising their economies have become more reliant on energy from OPEC-plus countries. Russia is the largest gas supplier to Germany, delivering about a third of its needs. It’s remarkable that Germany – Europe’s largest economy – relies on a rogue nation for so much of its energy supply.

As the gap between oil supply from OPEC and non-OPEC countries widens in coming years, the world will rely more on a small group of low-cost producers. The International Energy Agency predicts OPEC’s share of global oil supply will grow from about 37 per cent to 52 per cent by 2050 – the highest point in oil-market history.

OPEC-plus countries include Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan and Sudan. These likely aren’t countries the West would want to rely on for energy security.

Russia’s invasion of Ukraine could prompt Western countries to rethink the supply of fossil fuels. Few doubt that the world needs to transition to renewable to mitigate climate-change risks. But moving too quickly from fossil fuels to clean energy means countries like Germany are relying more on unpredictable actors like Russia.

Longer-term, energy security has implications for how Europe confronts the growing security threat of Russia – and China’s intentions with Taiwan. Energy security, which will rely on fossil fuels for many years to come, is vital to any reshaping of the international order.

So as markets focus on soaring shortterm gains in the oil price, it’s worth considering how the Russia–Ukraine war could affect long-term trends in oil supply in non-OPEC countries.

Countries eager to move faster from oil, gas and coal might balance that against the risks of placing more of their energy security in the hands of autocracies.

ADVANCE YOUR MINING OPERATION TO MAXIMISE EFFICIENCY

RPMGlobal has been helping organisations remain at the forefront of mining for more than 50 years. Our software, advisory and training services help companies unlock powerful insights to amplify decision-making.

At RPMGlobal, our software integrates a mining operation’s design, scheduling, asset management, operations and finances to seamlessly connect systems and information. With innovative software, mobile solutions and cloud applications, we ensure companies can operate their businesses remotely no matter where their people are located.

Software | Consulting & Advisory | Training

To find out more visit www.rpmglobal.com 0

F E AT U R E D

— ANALYSIS — WITH REGINA MEANI Diamonds are forever WITH PRICES RISING since early 2020, diamonds are considered a safe haven in times of uncertainty.

At the time of their discovery, which was thought to be in India in the 4th century BC, diamonds were valued because of their strength and brilliance, and for their ability to refract light and engrave metal.

Diamonds were worn as adornments, used as cutting tools, served as a talisman to ward off evil, and for protection in battle.

In more recent times, diamonds have become a symbol of celebration and, as they say, diamonds are forever.

From an investment standpoint, diamond prices have been rising from early 2020 and they are considered a safe haven in times of uncertainty.

Burgundy Diamond Mines (see table below) gained its name from a 15th century duchess who was presented with

– 10 –

the world’s first diamond engagement ring in an alliance with the Archduke of Austria, creating a union that changed the face of European politics.

Taking its lead from the Duchess of Burgundy, the company believes business and passion are the secret to forging

powerful mergers and acquisitions.

The company has an option to acquire 100% ownership of the Ellendale Diamond Project, including the Blina Alluvial targets, located in the iconic diamond district in the West Kimberley region of Western Australia. Previous production at the site produced 50% of the world’s fancy yellow diamonds.

Other projects include a 40% interest in the Naujaat Diamond project in Nunavut, Canada. The project is the largest undeveloped diamond property in Canada that is not under the control of a major mining company. The project is focused on the potential value contribution from an exceptional population of uniquely coloured fancy vivid orangey-yellow stones. This is a specific and rare colour and these diamonds are expected to sell at high premiums to white diamond prices.

In addition, Burgundy Diamond Mines has deals in Botswana with Diamond Exploration Strategies and in Peru with the La Victoria gold and silver mine.

The share price for Burgundy Diamond Mines at the time of writing (ASX: BDM $0.22) created a large base between 2013 and the end of 2020, when the price broke up through

AUSTRALIAN RESOURCES & INVESTMENT

$0.20 to surge to $0.50 in a few months.

At this level, the price had exceeded its initial expectation from the base and experienced a turning point in momentum.

Since then, the price has found support above its breakout level at $0.20, churning in a slightly downward sloping range throughout the rest of 2021 and into 2022.

The action is an attempt to rebalance the price position and there is the possibility of more fluctuations between $0.19 and $0.29 before the action is resolved.

A rise through $0.29 would signal the potential for a new upswing for the stock towards $0.35 and $0.40, and possibly towards $0.80 and $1.00. The risk would be a fall towards support at $0.16 triggered on a drop through $0.19.

The Lucapa Diamond Company (ASX: LOM $0.08; see table above) is listed on the Australian and Frankfurt stock exchanges. A growing diamond producer with high-value-producing mines, including the Lulo alluvial mine in Angola and the Mothae kimberlite project in the Kingdom of Lesotho, a small country (population 2.2 million) surrounded by South Africa.

In Australia’s Northern Territory, 720km south-east of Darwin, the company’s Merlin Diamond Project includes two tenements – a 24km2 tenement with a mining lease and a 283km2 exploration tenement surrounding the mining lease. Prior to Lucapa’s involvement, a 104 carat Type IIa white diamond was discovered at the Merlin Diamond Project in 2002, the largest diamond ever recovered in Australia.

Lucapa’s other projects include early-stage diamond exploration

in Brooking, Australia, and in the Orapa Area F, Botswana.

Both the Lulo and Mothae mines produce large and high-value diamonds, generating more than 75 per cent of their revenues from the recovery of +4.8 carat stones. Lulo has produced Angola’s two biggest recorded diamonds, weighing in at 404 carats and 227 carats, respectively.

A volatile downward path has characterised the share price action for Lucapa from 2007.

The June 2020 low at around $0.04 saw a significant change in momentum and produced a strong rally to $0.09 over a two-month period, with the subsequent price volatility taking on the appearance of a basing phase.

The base may not be ready for completion and more price fluctuations

may develop in the $0.06–$0.11 range. A break-up from the range would suggest a test of higher resistance at $0.15–$0.17 and the potential to set a new upward path for significantly higher prices.

After 37 years of mining diamonds in the world-famous Argyle Mine in Western Australia, Rio Tinto (see table below) has turned its focus to the Diavik Diamond mine, 200km south of the Arctic Circle, at the bottom of Lac de Gras in Canada’s Northwest Territories.

Here they boast some of the world’s most beautiful and sought-after diamonds, with production of more than 6.2 million carats. Through innovation, world-class engineering technologies and partnering with Indigenous peoples, the company has mined some of the world’s most ethical diamonds with minimal impact on the local land, water and wildlife.

As an Anglo-Australian multinational, Rio Tinto is listed in London and Australia and is ranked the second-largest metals and mining corporation in the world.

Rio Tinto (ASX: RIO $126.56) exhibits a powerful long-term price history from its early days in the 1970s to its peak in June last year at $137.33. At this level, the price stalled in momentum overrun and dropped back to support around $90. A reversal developed and was completed in January this year, with the price rise to $103.

The stock has since continued to climb towards to the peak zone, but may slow as it moves towards and through $130, and a pullback/pause action may occur before the stock can break through and achieve a new peak around $150. Support lies at $113, but a drop back beneath $107 could further delay the upward path.

– 11 –

F E AT U R E D

Liontown: Mining’s next mega-city Under the leadership of Tim Goyder and Tony Ottaviano, Liontown Resources is in a strong position to elevate its Kathleen Valley lithium project into production.

I

t’s not easy to build a multi-billion-dollar company having not mined a single tonne of ore. But that is exactly what Liontown Resources has done.

At the beginning of September 2020, Liontown’s share price was hovering around the $0.10 mark. A year later, the company clocked $1.

And Liontown has steadily appreciated since then, as its flagship Kathleen Valley lithium project, approximately 680km northeast of Perth and 400km north of Kalgoorlie in WA, has grown sturdier by the day.

At the time of writing, Liontown shares were trading at $1.60 and the company had a market capitalisation of $3.51 billion.

– 12 –

This calculated rise has been overseen by one of the best in the business, mining magnate and Liontown chair Tim Goyder.

Until November 2021, Goyder was also the chair of Chalice Mining, and many are aware of that company’s success. In some ways, Chalice’s story mimics that of Liontown: two explorers that became billion-dollar fortresses without making a cent from the pit.

Goyder may have the magic touch, yet there have been other wizards at work.

Tony Ottaviano commenced as Liontown’s managing director and chief executive officer in May 2021 and has administered great growth. Liontown’s share price was hovering around the $0.40 mark when he began,

meaning its stock has risen 300 per cent in less than a year of Ottaviano management.

Liontown has achieved many things during Ottaviano’s time. In July 2021, the company raised $52 million through a strongly supported placement at $0.76 per share.

In early August, Liontown terminated Ramelius Resources’ royalty over Kathleen Valley through a $30.25 million payout, and a few weeks later spun-out it’s non-lithium assets into demerged entity Minerals 260.

In November 2021, Liontown and the Tjiwarl Native Title Holders signed a native title agreement regarding Kathleen Valley following two-and-a-half years of collaboration between the lithium company

AUSTRALIAN RESOURCES & INVESTMENT

Tim Goyder (left) and Tony Ottaviano (right) at Kathleen Valley, WA.

and the Tjiwarl Aboriginal Corporation RNTBC (Tjiwarl AC).

To reduce the impact on cultural heritage sites, Liontown redesigned the Kathleen Valley mine plan in consultation with the Tjiwarl AC to be a predominantly underground operation instead of the originally planned open pit.

“One of the proudest moments so far in my tenure as managing director of Liontown was the signing of the native title agreement in November last year with the Tjiwarl,” Ottaviano told Australian Resources & Investment. “We’re very proud of the Traditional Owners, the Tjiwarl, and how they’ve helped us. They will continue to help us and we’ll continue to work as a partnership.

“We are the first native title agreement signed since Juukan Gorge and I’m telling you how significant that is given what happened.”

In May 2020, Rio Tinto conducted a blast as part of its extension of the Brockman 4 iron ore mine in WA, devastating Aboriginal heritage sites at Juukan Gorge, including two culturally and archeologically significant rock shelters. This occurred despite the Puutu Kunti Kurrama and Pinikura (PKKP) Traditional Owners repeatedly suggesting they wanted to protect the site.

The PKKP found out about the planned blast in mid-May and issued an urgent request to stop the detonation. The rock shelters were destroyed on May 23.

A week on from its native title agreement, Liontown released its definitive feasibility study (DFS) for Kathleen Valley, increasing the project’s initial production base from two million tonnes per annum (Mtpa), as set out in the PFS, to 2.5Mtpa.

A $450 million institutional placement followed in December 2021 and, by this point, the company was already a consistent $1.50plus performer.

The company signed its first Kathleen Valley offtake agreement in January 2022, inking an initial five-year deal with South Korea battery maker LG Energy Solution for the supply of up to 150,000 dry metric tonnes per annum (dmtpa) of spodumene.

A month later, Liontown signed its second Kathleen Valley offtake agreement, linking up with Tesla for a similar five-year deal also involving the supply of up to 150,000dMtpa of spodumene.

Liontown had thus sewn up 60 per cent of Kathleen Valley’s initial production capacity in two deals. Both deals commence in 2024, when Liontown aims to commence production at Kathleen Valley.

But offtake agreements are a two-way street and Liontown has been incredibly judicious in the process.

“Our offtake strategy has three elements to it,” Ottaviano said.

“Get customers that are diversified by geography; get customers that are diversified for position on the value chain; and then get diversity of contract type, be very smart in the way we construct the contracts.

“So with geography, we want to be positioned globally so that we’re not reliant on one particular geography to sell into. And we’ve got North America, we’ve got Korea, and we’ll potentially look at maybe a couple of other jurisdictions. So good coverage there.

“The second one is position on the value chain, which is arguably the most important, I believe. And the reason being is we want to be as close as possible to where the technology is being adopted, and where it’s being designed.

“Because if I’m sitting back in the raw material area, and there’s changes in technology – and the battery world is changing constantly – I don’t want to be flatfooted. I want to know it before anyone else does. Then I can be agile and move my product suite accordingly.

“For example, if hydroxide doesn’t become the chemical of choice downstream and it moves to lithium sulphate, I’ll know that before. If I’m only dealing with a converter, I’m blind.”

– 13 –

F E AT U R E D

Spodumene has typically been converted into lithium carbonate or lithium hydroxide before it is used to make batteries. However, advancements are always imminent in the ever-changing world of battery development.

As Liontown continues to de-risk Kathleen Valley, the company has its sights set on the final investment decision (FID) expected in the second quarter of 2022.

“The critical milestone coming up now is the FID, which we’re planning to do in June of this year,” Ottaviano said. “Leading up to the FID the board needs to have comfort around a number of things.

“Firstly, have we got offtakes in place?

We’re working well in that regard.

“The second thing we need to put in place is the funding. Have we got this project fully funded? We’ve raised $450 million – so we’ve done the equity piece – we’re now in discussions with the banks to provide our final debt funding.

“The third thing we need to have across the line for the board is permitting.”

Liontown’s native title agreement with the Tjiwarl Native Title Holders has enabled the remaining Kathleen Valley permitting submissions to be finalised, which will occur ahead of the FID. Following a positive FID, Liontown will ready itself to commence the Kathleen Valley build, with ambitions to complete construction by the December quarter of 2023. Commissioning would then take place in the March quarter of 2024, paving the way for first production in the June quarter of 2024.

Commencing Kathleen Valley construction in mid-2022 is critical to Liontown’s aspirations of beginning production in 2024, and the

Liontown is aiming for a final investment decision in the second quarter of 2022.

company has got important offtake agreements riding on it.

The electric vehicle (EV) market is riding on it, too. Leading data and analytics company GlobalData forecast annual EV output to jump from 3.4 million in 2020 to 12.7 million in 2024. This would result in lithium demand increasing from 47,300 tonnes in 2020 to 117,400 tonnes in 2024.

This suggests that as long as Liontown can tick all its development boxes, it’s a pretty safe investor bet moving forward.

Ottaviano said there’s a trick for young players in understanding project timelines.

“The point I make quite often is this: if you’re going to bring on new capacity in 2023 or 2024, if you’re not constructing by middle of this year, there is no way you’re going to bring it on in 2024. That is the acid test,” he said.

“If I was an investor, I’ll be looking at all the lithium projects. Which ones are The current resource base supports a 23year mine life at Kathleen Valley, WA.

building midway through this year? They’re the ones I’m going to back because – all the rest? – they’re mining the market.”

With 60 per cent of Kathleen Valley’s initial spodumene production already purchased by LG Energy Solution and Tesla, Liontown has already established a strong foundation for the project. But is there room for experimentation?

In March 2021, Pilbara Minerals launched its own digital sales platform, the Battery Material Exchange (BMX).

Created in collaboration with Perth technology company GLX Digital, BMX provides an avenue for interested parties to acquire current and future unallocated spodumene concentrate via a spot market.

Across the first three auctions, Pilbara Minerals’ spodumene concentrate drew highest bids of $US1250 ($1684.50)/dry metric tonne (dmt), $US2240 ($3088)/dmt and $US2350 ($3240)/dmt, respectively.

Attracting 25 bids online during a 45-minute auction window, the third auction saw a cargo of 10,000dmt sold at a target grade of 5.5 per cent lithia.

So what are Ottaviano’s thoughts of selling Kathleen Valley’s spodumene through a similar avenue?

“I like the intent that Pilbara is doing.

I’m supportive of that. And, in fact, I’m dedicating 15 per cent of my production to the spot market,” he said. “Now, is the platform BMX? I’m not sure at this stage.

I’ve got to 18 months to think about it.”

With Goyder and Ottaviano at the helm, Liontown has the expertise it needs to elevate Kathleen Valley into production.

And with hungry EV manufacturers waiting in the wings, the company has every chance to become an Australian lithium kingpin.

R

i

f – 14 –

We’re Answering the World’s call for high grade iron ore products At Hawsons Iron, we are focused on developing our flagship Hawsons Iron Project near Broken Hill, NSW into a premium producer of high-quality iron ore products for the global steel industry.

Our Hawsons Supergrade® iron ore, with the purest, 70% Fe content is key to producing green steel using advanced technologies, renewable energy and less to no fossil fuels.

While we may be small, we have big ambitions to power positive change in the steel industry’s evolution towards zero carbon emissions.

Read more about us and why our high-grade

Hawsons Iron Limited (ASX: HIO)

iron ore is essential to a carbon-free steel

P: +61 (0)7 3220 2022

future at https://hawsons.com.au

L: Level 21, 12 Creek Street Brisbane QLD 4000

F E AT U R E D

Drilling in the Julimar State Forest, WA.

Australia’s platinum future I

Platinum group elements are largely produced by Russia and South Africa.

But as several exploration companies advance PGE projects, momentum is increasing on the local scene.

n December 2020, Chalice Gold Mines changed its name to Chalice Mining.

Gold had brought Chalice plenty of success over the years; however, the winds were changing and priorities shift ing.

In March 2020, a side hustle took pole position when Chalice made a world-class discovery of platinum group elements (PGE), nickel, copper, cobalt and gold at its Julimar project 70km north-east of Perth.

The Gonneville deposit is estimated to contain 10 million ounces of palladium, platinum and gold – collectively called 3E (three elements) – plus more than 900,000 tonnes of base metals.

– 16 –

Most significant was the platinum and palladium finding, which singlehandedly inaugurated a new critical minerals industry.

Palladium is estimated to be 15 times rarer than platinum and 30 times rarer than gold. Russia makes up about 40 per cent of the world’s palladium supply, producing 2.6 million troy ounces of the metal in 2021.

South Africa is the world’s largest platinum supplier, with the country’s Bushveld complex comprising the world’s largest open-pit platinum mine, Mogalakwena.

Combined, palladium and platinum are

critical to autocatalysts – a device used in the automotive industry to convert harmful pollutants from internal combustion engine vehicles into less-harmful properties such as carbon dioxide and water.

Demand for palladium and platinum also comes from the jewellery industry, where the metals’ rarity is especially appealing.

Platinum is also becoming increasingly important in the world’s pursuit of decarbonisation. The metal is currently used in electrolysers to produce green hydrogen, and in hydrogen fuel cells to power fuel cell electric vehicles. Chalice claims palladium can also be used for this purpose.

AUSTRALIAN RESOURCES & INVESTMENT

While there was fortune to Gonneville, Chalice was and is a well-oiled machine, boasting one of the best technical teams in the business. Managing director and chief executive officer Alex Dorsch said the company had been putting in the hard yards leading up to Gonneville.

“Even before the Julimar discovery, Chalice always punched well above its weight and operated at a more ‘sophisticated’ level than the typical junior,” he told Australian Resources & Investment.

“I think the track record of value creation and rewarding shareholders by returning cash has been a big part of the recipe.

“Keeping active on the ground, setting a high bar for what success looks like and turning over projects when they don’t make the cut has built loyalty and a strong following.

“I had the privilege of coming into the company after it had already built that solid track record and ownership mindset. Plus it had a strong balance sheet to show for it, so it’s really been building on that ever since.”

Dorsch became Chalice managing director in November 2018 after being appointed CEO in March 2018.

He said Julimar isn’t just confined to its sizeable 3E and base metals resource.

The project has unique mineralogical characteristics that will give Chalice greater versatility in the market.

“The sulphide mineralogy at Julimar is such that we can use flotation to produce two separate metal concentrates – a copper-PGE-gold concentrate and a nickelcobalt-PGE concentrate,” he said.

“This allows us to essentially sell to existing copper and nickel concentrate customers, not dissimilar to other base metal miners in WA. “We are also investigating additional processing techniques, particularly on lower-grade mineralisation at Julimar, as we see significant potential to produce battery precursor products from the project.”

Having established Gonneville’s foundations, there’s still plenty of work to be done before first production.

“We are certainly moving Gonneville, the first discovery, forward through studies as quickly as possible,” Dorsch said. “The next major milestone is the scoping study for the initial development of Gonneville, which is expected to be completed in mid-2022.

“Meanwhile, we are continuing to expand the resource at Gonneville, with a focus on extending high-grade zones at depth.”

Chalice managing director and chief executive officer Alex Dorsch.

In early March 2022, Chalice announced it had intersected high-grade sulphides up to 400m below its current Gonneville resource, with promising palladium and platinum hits reported.

Most significantly, the JD232 drill hole hit 3.7m at 7.3 grams per tonne (g/t) palladium, 1.2g/t platinum, 0.7g/t gold, 0.6 per cent nickel, one per cent copper (or 4.5 per cent nickel equivalent) from 429.3m.

Chalice is also focusing its efforts on Julimar’s fancied Hartog prospect, which had received stronger responses in prior airborne electromagnetic (AEM) surveys than Gonneville.

“We are also drilling exploration holes over 10km of Julimar complex strike length immediately north of Gonneville, at the Hartog and Dampier targets, as well as at the Jansz and Torres targets approximately 15–20km to the north-east,” Dorsch said.

“It is certainly an exciting time for the company, as some of Julimar’s most exciting drill targets are tested over the coming months.”

Australia has never been a prominent player in the PGE space, and with current PGE supply confined to a handful of countries, the nation has a big opportunity to become part of the conversation.

“For the last 50-plus years, the world has been totally reliant on Russia and South Africa, and to a lesser degree North America, for the supply of the incredible valuable and scarce platinum group metals,” Dorsch said. “Australia has had very few standalone PGE discoveries and those have typically been too small to be economic or have had metallurgical challenges. PGEs are currently produced as by-products from certain nickel sulphide mines in WA ... in very small quantities.

– 17 –

F E AT U R E D

Core sample from the Gonneville deposit in WA.

“So our discovery, with approximately 10 million ounces of contained precious metals, about 910,000 tonnes of contained base metals – and growing – and with the right sulphide mineralogy, allowing us to sell to a range of customers, is a major development in Australian history.”

Caspin Resources has been developing its Yarawindah Brook nickel-copper-PGE project just 40km from Julimar.

In early February, the company announced a significant discovery at its XC-22 prospect within Yarawindah Brook, unearthing a 68m zone of nickel, copper and PGE mineralisation from its YARC0022 drill hole.

Given this was XC-22’s first drill hole, Caspin chief executive officer Greg Miles said it was a critical milestone for the company.

“It was important to us for a couple of reasons,” he said.

“Firstly, it’s probably our best result in terms of economic grade. I wouldn’t consider it to be a high-grade result at the moment, but the width of PGE mineralisation at almost a gram combined platinum, palladium and gold at such a shallow depth is certainly a step in the right direction.

“There was also a significant nickel and copper hit in the drill hole, which is also exciting.

“But the main potential is probably

– 18 –

the PGE mineralisation, and from our understanding the geology would suggest the PGE mineralisation is possibly over at least a kilometre along strike and certainly open down-dip or down-plunge.”

Caspin’s 2022 field program will see the company complete approximately 7000m of drilling at various targets within Yarawindah Brook. XC-22 will be a priority, with Caspin looking to evaluate potential for nickel-copper massive sulphide and lowsulphide PGE mineralisation.

The drill program will also focus on other targets, including the Northwest PGE-nickel-copper anomaly and Brassica prospect. A lot will be learnt about Yarawindah Brook’s potential in 2022 fieldwork.

“I think a lot of people are going to be interested in this next phase of exploration,” Miles said. “We’ve got an RC (reverse circulation) and a diamond rig and that’s going to be an exciting phase.

“The XC-22 prospect has certainly elevated the potential of the project. And we’re not in a stage where it’s make or break. The number of opportunities we have is growing at the moment, not closing.

“Some people tend to think that the more you drill, with every drill hole, the likelihood of finding something decreases. Well, we’re not at that stage at all, it’s completely the opposite. Every hole we’re drilling is opening up new opportunities.

“I think the short-term future of Caspin is pretty exciting. I think the long-term future of the West Yilgarn province is even more exciting.

“Ourselves and Chalice and all the other companies operating in the region, we’re looking forward to a really interesting couple of years.”

Located in the eastern section of the Yilgarn Craton, Western Mines Group’s Mulga Tank nickel-copperPGE project is tapping into the largely unexplored Minigwal greenstone belt.

The next few months will see Western Mines complete an initial 10–12-hole drill program at Mulga Tank.

Our discovery, with approximately 10 million ounces of contained precious metals, about 910,000 tonnes of contained base metals and with the right sulphide mineralogy, allowing us to sell to a range of customers, is a major development in Australian history.”

AUSTRALIAN RESOURCES & INVESTMENT

Western Mines managing director Caedmon Marriott said the untapped nature of its target area had the company particularly enthusiastic.

“This is what makes it exciting for us,” he said.

“The fact a little company like us can pick up a bunch of giant projects that from historic work is highly prospective but no one’s really given it a good crack.

“It’s ultramafic intrusion, it covers a large area, and I think the historical work shows there’s a working geochemical system here.

“If you’ve been researching PGEs, you’ll know the geochemistry of these rocks – these ultramafic and mafic rocks – is critical to generate sulphides, to generating PGEs, nickel and copper.”

The West Yilgarn province where Julimar is located had been largely neglected up until Chalice made its record discovery.

Chalice’s belief in the resource never wavered, something Marriott said can inspire any emerging operation.

“It’s incredibly awesome for the industry that Chalice have been successful because they’ve gone to what was potentially a province written off or nobody gave credibility and they’ve been able to find a massive deposit,” he said.

“It shows that these areas that have maybe been looked at a little bit or are more frontier in a way or untested, which

certainly our project is … it just gives us the confidence that it is possible.”

Looking at the present situation, one could reasonably consider Chalice Caspin and Western Mines competitors, but more discovery creates more momentum and collective success will go a long way to solidifying Australia’s first PGE industry.

Palladium is estimated to be 15 times rarer than platinum.

Drill rigs at Chalice’s Gonneville deposit.

– 19 –

RARE EARTHS

Rare earths: Australia’s next big players ARI chats to Arafura Resources and Australian Strategic Materials, two companies critical to the country’s future rare earths aspirations.

A

s fossil fuel demand regresses, certain commodities will inevitably have to pick up the slack.

Coal remains an important resource for now, but the energy transition is rapidly advancing the need for green alternatives, such as lithium, nickel, copper and cobalt.

Also critical to net-zero, demand for rare earth elements (REE) doubled in the 15 years to 2021, reaching 125,000 tonnes per year. And future growth is tipped to be exponential.

According to 2022 data from the United States Geological Survey (USGS), it was estimated China produced approximately 168,000 tonnes of rare earth oxides (REO) in 2021, making up 60 per cent of the world’s production.

Australian Strategic Materials’ Dubbo project in NSW.

– 20 –

Despite China’s current market dominance, Australia’s rare earths industry is on the rise, with several emerging companies looking to accompany Lynas Rare Earths in the production ranks.

One of those is Arafura Resources, which is developing its Nolans rare earths project in the Northern Territory.

Aiming for a final investment decision (FID) in the second half of 2022, Arafura first listed on the ASX in 2003 and has had a front seat for rare earths’ rapid rise.

Arafura managing director and chief executive officer Gavin Lockyer said the evolution of the automotive industry was an early stimulant for this growth.

“The real game changer has come through

modernisation of so many industries and miniaturisation of things,” he told Australian Resources & Investment.

“Fuel efficiency became a really big driver for rare earth magnets.

“People wanting their cars to go further on less fuel meant they had to try and find alternate ways to make the car lighter. They started replacing hydraulics with little micro motors. So now we have electric seats, electric windows, electric steering, electric brakes, and so forth.

“All of them combined would probably have about one kilogram of rare earth magnets in them, and then come forward about 10 years and you’re finding transportation fleets are becoming electrified.”

AUSTRALIAN RESOURCES & INVESTMENT

Rare earths are proving equally, if not more, important to global electrification than other battery materials, with the commodity serving a unique purpose to the movement.

“If you want batteries to drive an efficient motor, and therefore extend the range of the car, you need to use rare earth magnets in the motor, where there’s another kilogram of rare earth magnets located,” Lockyer said. “If you don’t use those magnets, the motor runs at about a third of the efficiency.”

Rare earths comprise 15 elements of the lanthanide series. Some REEs are more useful than others, and Nolans is focused on neodymium-praseodymium (NdPr).

Lockyer said the automotive industry would be a key market for Arafura once Nolans gets into production; however, demand can certainly come from elsewhere.

“I’ve only spoken about cars but you can apply this to offshore wind turbines, which is another growing market,” he said.

“Rare earths have military and medical applications. Your dishwasher will have a couple of little electric motors in it which have rare earth magnets in them. So they’re in everyday use.

“But the real consumer and where all the focus has been recently is around electric cars and wind turbines.”

While the rare earths appetite continues to grow, the commodity is more geologically complex than people may realise, a situation Lockyer said had led to misconceptions in the market.

“Every rare earth deposit is slightly different geologically,” Lockyer said. “China’s dominated the market as a dominant supplier and you can’t just go to an engineering company and say, ‘Build me a rare earth extraction plant like what you built for Lynas’.

“Because Lynas’ geology is different to our geology and so it’s a different chemical process.

This has been really hard for the markets to understand, that you’re not a gold mine (and) you can’t just go to somebody and say, ‘Build me a gold mine like you built over there’, because each rare earths mine is different.”

Arafura has put in years of work to get to where it is today, and the company wouldn’t be the advanced business it is if it didn’t believe in its product.

“To get to where we are now, we’ve had to do a lot of trial and error. A lot of testwork, a lot of lab-scale work,” Lockyer said.

“Then when we got comfortable with the flow sheet itself, in around 2015, we determined we would build a pilot plant … such that we can prove the process at a much

Nolans is focused on the rare earths, neodymium-praseodymium (NdPr).

larger scale and hopefully de-risk some of the commissioning risks that we might experience going forward.”

Fast-forward to today and Arafura is among a handful of companies looking to be Australia’s next rare earths producer.

When asked about what makes Nolans distinctive, one thing stood out to Lockyer.

“Nolans is unique in the fact that it’s a large deposit and it’s typically contained in one big area,” he said. “A number of other projects are having to mine in lenses, which obviously increases your mining costs.

“It’s enriched in NdPr – 26 per cent of our rare earths is contained in NdPr. That translates to 85 per cent of our revenue. .

“We have a JORC (Joint Ore Reserves Committee)-compliant resource with a life of mine of about 38 years, and that’s only in the top 200m of vertical depth.

“We’ve drilled 440m deep and still been in mineralisation. So this thing’s massive.”

The project is also unique in its location,

and given its proximity to Alice Springs Nolans has the potential to be an economic driver for the region and Australia.

“We’re only 130km north of Alice Springs,” Lockyer said. “It’s remote. It’s just enough out of town to not bother the locals, but at the same time it’’ accessible.

“In this part of Australia, a lot of the gross domestic product (GDP) depends on government services. So we have an opportunity here, given it’s such a long-life mine, to make some intergenerational change for that region and for wider Australia.

“There’s a lot of people dependent on welfare (in this region) and so we have an opportunity here as a company to actually make change and try and break some of those cycles of welfare.

“We see this as a really high priority for the company, because we want to be a good neighbour to the people, and personally, we just want to see this new industry flourish.”

– 21 –

RARE EARTHS

Drilling at the Nolans rare earths project in the NT.

Arafura signed a joint statement of cooperation agreement with the Korea Mine Rehabilitation and Mineral Resources Corporation (KOMIR) in late February to assist the supply of rare earths to the Korean market.

The agreement will see the two focus on expanding cooperation in several areas, including information-sharing on Nolans’ development, to enable participation of South Korean investors, the import of rare earths into Korea, and the use of strategic stockpiling.

With similar agreements signed with other emerging critical minerals producers, Korea is positioning itself as a committed partner to Australia.

“What is significant is Korea has identified

they want to diversify the entire supply chain down to magnets,” Lockyer said. “Japan already have magnet-making capacity and they’re already tied up with offtake with Lynas and they funded Lynas. So Japan’s set.

“The EU currently buys all its magnets either from Japan or from China. There is small magnet-making capacity in Europe but they really haven’t focused on expanding that capacity, they’ve been more focused on securing battery material for the electric cars, not the magnets.

So the Koreans have stepped forward and said, ‘We don’t want to be dependent on China and we don’t want to be dependent on Japan. We want to develop our own diversified

Neodymium-praseodymium is used in the motors of hybrid and electric cars.

– 22 –

supply chain’, and they’ve been very proactive about it.”

Leading into the FID later this year, Arafura is working on several different work streams to further solidify Nolans. This includes the front-end engineering design (FEED) process.

“Last year, we undertook an exercise with the Australian Government lending bodies in Export Finance Australia (EFA) and the Northern Australian Infrastructure Fund (NAIF),” Lockyer said.

“Feedback from them and also from other commercial banks was that they would like to see a more detailed engineering design phase committed to before they would look at drawing down debt funding.”

“So we went out and raised about $40 million last year, and then committed to the FEED process. The target there is by the end of that FEED process, which is prior to FID, we should have about 65 per cent of all our capital costs locked in as a lump sum.

“This gives the market confidence that we’re not going to expect any nasty surprises in cost overruns and so forth. So that’s one thing we’re doing, and that’s a pretty big exercise.”

AUSTRALIAN RESOURCES & INVESTMENT

We’re not reliant on selling our product at a lower value form.

We can deliver it to the end customer as an independent alternate supply chain – as part of our ‘mine to metal’ business – and that has significant advantages.

Lockyer said Arafura had “20-odd” well advanced term sheets. Having offtake agreements in place will assist Arafura to establish more debt funding, which puts the company in a better position come the FID. Debt financiers are typically more likely to come on board if a company can demonstrate how they will be repaid.

Having credit-worthy offtake partners is an important piece to this puzzle.

As rare earths demand continues to balloon, Nolans will hit the ground running if it can achieve first production in 2024.

Whether it be the automotive industry, wind turbines or dishwashers, a slate of customers will no doubt be eagerly awaiting Nolans NdPr product.

Located in New South Wales, Australian Strategic Materials’ (ASM) Dubbo project is

another rare earths project looking to come on stream in the next few years. Dubbo is different from Nolans in that it comprises rare earths as well as zirconium, niobium, hafnium, tantalum and yttrium.

ASM also has a joint statement of cooperation agreement with KOMIR in place, and in late February the company signed an exclusive heads of agreement with Hyundai Engineering Corporation.

This enables ASM to exclusively negotiate with Hyundai regarding the FEED and engineering procurement and construction (EPC) of Dubbo.

ASM managing director David Woodall said Hyundai had worldclass credentials.

“The idea is, one, we do a positive FEED study, but secondly, once it’s done and delivered, the logical part would be someone

like Hyundai to build Dubbo,” he told Australian Research & Investment.

“Hyundai are building three multibillion-dollar projects globally, in various jurisdictions, so they’re a very strong potential partner.”

ASM will aim for an FID in 2023, then, following a two-and-a-half-year construction timeframe, Dubbo would commence production in 2025.

With a “mine to metal” strategy, ASM has a metallisation plant in Korea with which it aims to commence critical metals production in 2022. The plant will also be used to convert the oxide produced from Dubbo into metal.

Woodall said the middle business offers ASM a point of difference.

“We’re not reliant on selling our product at a lower value form,” he said.

“We can deliver it to the end customer as an independent alternate supply chain – as part of our ‘mine to metal’ business – and that has significant advantages.”

Aiming to commence production about a year apart, one could consider Arafura and ASM to be competitors in Australia’s emerging rare earths industry. But with the commodity’s expected demand growth in the future, the world is going to need all the REEs it can get.

“To people who say various rare earth producers are your competitors, my comment is, if you look at the growth and demand of rare earths, you literally need every single deposit to move forward,” Woodall said.

Sounds like the sky’s the limit for Australia’s rare earths industry.

Arafura’s Nolans rare earths project.

– 23 –

MINING SERVICES

Climate change and mine waste management Companies will need to incorporate more extreme weather events into mine design.

D

uring a cyclone, a mine in northern Western Australia receives almost a year’s worth of rain in 24 hours.

The deluge is at least a one-in-100-year weather event.

Fortunately, the mine’s structures and waste management systems withstand the flooding. The mine owners factored in the probability of such weather as part of their climate change modelling.

But as temperatures rise each year, land at the mine becomes drier. Vegetation struggles with the heat and is less effective as erosion control. Dust and air quality become bigger issues for the mine and nearby communities.

At the same time, cyclones move further south and their intensity increases.

In 2050, a category-five cyclone crosses land. The mine receives more than a year’s rain in 24 hours.

Mining companies need to determine the potential costs of extreme weather events.

– 24 –

The flooding is described as a one-in-300year event.

The mine’s waste management systems fail during the “rain bomb”. The mine’s tailings dam collapses, releasing acidic material in waterways and damaging biodiversity. The clean-up is expected to take decades and cost hundreds of millions of dollars.

This hypothetical scenario, of course, might never happen. Much depends on mine location and the resource sector’s response to climate change risk. But mine design will have to factor in hotter temperatures and more intense rainfall events in coming decades as the climate warms.

“Extreme weather events are expected to become more frequent because of climate change,” SRK Consulting environmental geochemist Nicole Dunne said.

“Factoring in the risk of a one-in-100year weather event into mine design and rehabilitation planning is no longer enough.

Companies must also consider what a one-in300-year weather event looks like and how that could impact their mine.”

“This a multi-generational risk. If you are planning a mine today, you need to model what the climate will look like in 2050 and beyond.

“Even conservative climate modelling predicts the frequency and magnitude of extreme weather will increase.”

Parts of WA are already experiencing hotter summers, lower annual rainfall and more intense rainfall events.

Average annual rainfall in Perth is around 700 millimetres (mm). In 2020, Perth recorded its second-highest annual rainfall at 892mm.

AUSTRALIAN RESOURCES & INVESTMENT

A dam siren.

That was partly due to 271mm falling during an exceptionally wet July. Intense rainfall that month damaged some buildings and caused several injuries.

The Pilbara and Kimberley regions in northern WA are also experiencing hotter temperatures and more intense rainfall. In January, several Pilbara towns broke records for their hottest temperature.

That was followed by heavy rainfall across the Pilbara and flooding in some areas. In February, parts of the Kimberly had their heaviest rain in 120 years and battled damaging winds.

Mining companies need to plan ahead when it comes to climate change.

M I N E WA S T E M A N AG E M E N T PL ANNING Dunne’s colleague, Joe Rola, said mining companies need to consider the intensity and interval of extreme weather events in waste management planning at mine sites.

Rola, a geotechnical engineer, is a principal consultant (mine waste) at SRK. “From an engineering perspective, companies will have to incorporate a higher probability of extreme weather events occurring more often,” he said.

“For example, a large flood that historically occurred on average once every

100 years might occur several times during that period.”

Rola said hotter temperatures exacerbate flooding risks at mine sites.

“As we get more extreme heat days and longer droughts, rainfall run-off can increase the quantum of surface water requiring management at mine sites. The surface crust becomes thicker and soil absorbs less water.

“Vegetation can be an important consideration for mine waste management design. Some plants that have adapted over geologic time to dry, hot conditions are starting to show signs of stress as climate conditions change too fast and we experience longer, hotter summers.”

Rola said less vegetation means more soil erosion and water run-off.

“Where practical, the incorporation of vegetation cover as part of mine closure and rehabilitation planning can lead to a reduction in the need for engineered solutions to manage erosion,” he said.

AN OPPORTUNIT Y Climate change is also an opportunity for forward-looking mining companies that implement strong climate change modelling processes to communicate their approach to stakeholders.

– 25 –

MINING SERVICES

­

­

­

­

– 26 –

Nobody knows for sure how climate change will play out. The only certainty is that the climate is changing and mining companies need to plan for that now.

“Investors need to understand how mining companies are responding to climate change risk,” Dunne said. “They want to know companies are factoring in a potential increase in the frequency and severity of extreme weather when building projects.

“For example, that a mine’s tailings dam can withstand a larger weather event than we are used to.”

Dunne said leading mining companies are examining ways to create value from changing weather.

“This might include developing hydroelectricity operations at mine sites that harness rainfalls to generate power.

Or use solar energy. We believe mines will become much more energy self-sufficient in coming decades through the development of renewables on-site or in the mine’s hub.”

Collaboration is another climate change opportunity.

“We expect more mining companies in an area will work together on climatechange risk,” Dunne said. “They might collaborate to develop renewable energy to power the mines and local communities, or build water-storage facilities that can help local farmers.”

Mine tailings after dam collapse.

The starting point is modelling the risk of extreme weather for mine design.

“Companies can then make a more informed assessment about the probability and potential costs of climate change on their operations. They can decide if the risk warrants extra investment in mine structures to withstand more intense weather,” Dunne said.

“The opportunity is to incorporate that thinking into medium and smaller mining organisations and help more parts of the mining sector respond to climate change risk.

“Nobody knows for sure how climate change will play out. The only certainty is that the climate is changing and mining companies need to plan for that now.”

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

APPEA2022

BHP

Making sense of the world around us As the year unfolds and the world learns how to live with COVID, BHP chief executive officer Mike Henry examined opportunities for the resources industry in the face of ever-changing global events.

M

ike Henry provided a clear-eyed assessment of the state of resources sector at the Australian Financial Review Business Summit in March.

“People are trying to make sense of what’s going on in the world around us,” the BHP chief executive officer told the audience.

“People realise that we’re potentially at quite a defining point in history, and they’re needing to make big choices or some are trying to keep their head above water.”

That uncertainty, according to Henry, can be viewed in a positive light by the industry and even entire nations.

“Others see this as an opportunity to make choices about how they shape their companies,” he said. “That’s certainly the attitude that we’ve adopted that sits behind some of the moves that we’ve made.

“Same thing applies for the nation.

Choices we make as a nation as to how we

– 28 –

forecasting possibly a 0.5 per cent lower global growth over the course of the next year than we were previously anticipating.

“And that’s a combination of the impacts of Russia–Ukraine, but also China coming up with a slightly more positive or aggressive growth target than some were anticipating.”

In the face of increasingly severe weather events in Australia – the latest of which was devastating floods in Queensland and New South Wales – and with pandemic and COVID-related labour constraints in the background, the market was already unstable.

Adding geopolitical crises and the most significant military action in Europe since World War II means companies are now being tested on a new level.

According to Henry, businesses that can wisely manage cost pressures will be best placed amid the uncertainty.

Source: BHP

BHP’s Nickel West operation in Western Australia.

shape the economy for the decades to come are going to be quite critical.”

When Henry spoke with Chanticleer columnist James Thomson on March 8, Russia’s invasion of Ukraine had entered its 12th day and sent shockwaves through the global commodities market.

As countries and jurisdictions banded together to impose sanctions on Russia, the ripple effect on commodities was stark, with the likes of nickel, copper and coal all reaching record high prices.

“You look at liquefied natural gas (LNG), for example,” Henry said. “A couple of years ago, it was sitting at $US2 per million British thermal units (BTU). Earlier today, it was sitting at $US84.

“We’ve seen hundreds of per cent price increases for a range of commodities, which is going to have spill-over effects on inflation, potentially on global growth – we’re

AUSTRALIAN RESOURCES & INVESTMENT

Source: BHP

BHP chief executive officer Mike Henry.

“Markets overall were more volatile heading into the Russia–Ukraine conflict, certainly on the supply side of things,” he said.

“We’re seeing exacerbated supplyside shocks, be it from conflict; we’ve had weather challenges here in Australia, particularly on the east coast; COVID (has had an impact), of course, which continues to disrupt supply chains and supply of some commodities.

“All of these are leading to greater volatility and the key is how companies position themselves to contain inflation, so that’s been a big area of focus for us – ensuring that costs don’t run away from us.

“But also ensuring that you have greater leverage in those commodities that do have that upside skewing as the world navigates some of the challenges that lie ahead.”

FUTURE-FACING COMMODITIES While Australia’s present day resources sector remains dominated by what could be called “traditional” resources – coal, gold, iron ore, etc – a changing industry landscape is paving the way for mining’s new frontier.

So-called ‘future-facing commodities’

BHP produced 253.5 million tonnes of iron ore in the 2021 financial year.

Source: BHP

GOING TO THE POLLS With a federal election on the very near Australian horizon, Henry understands that sweeping reform will not be straightforward for whichever party is victorious. But that doesn’t mean he believes change is impossible.

“If there was ever a time or a case to be made for reform, it’s now,” he said.

“And the thing I’ve called recently as being areas for policy focus, post-election … would be skills.”

Australia has been facing a skills shortage across a range of industries, including mining. The problem has only been exacerbated by the COVID-induced border closures – both internal and international.

Henry does see some potential solutions.

“You’ve got mobility of skills domestically here in Australia, and so looking at progressing things like the skills passport, which allows people with certain qualifications to move between the

states rather than have to constantly get requalified,” he said.

“One key thing (is) skilled migration.

Getting back to pre-pandemic levels is going to be important.

“And then, most importantly, it’s ensuring that Australia is able to attract those skills that allow us to innovate or create these new industries here in Australia.”

You only need to look at the emerging battery metals industry to understand where skills will be needed in the future.

such as copper, nickel and potash will grow in importance as the world moves towards renewable energy and into new areas of mining.

“To frame it up, the world’s going to need probably about two times as much copper over the next 30 years, 34 times as much nickel, even two times as much steel to support the energy transition,” Henry said.

Those needs, however, do not necessarily spell the end of Australia’s traditional resources.

“Two times as much steel means more iron ore and more coking coal,” Henry said.

“There’s a huge opportunity for Australia in that.

“As the world seeks to meet that need for more commodities, it’s going to be doing so with resources that tend to be smaller, deeper, more complex, lower grade.

“And so the implication of that is that for two times more copper, you’re actually going to need more than two times as much mining.”

While Australia has considerable reserves of future-facing commodities that can be mined in the future, Henry said considerable work would be required to take advantage of those resources.

“Capitalising on this opportunity is going to be nowhere near as easy as it was to capitalise on the opportunity in iron ore and coal,” he said.

“Not that that was easy, but we had both geographic and geological advantages in iron ore and coal.

– 29 –

BHP

Source: BHP

The world’s going to need probably about two times as much copper over the next 30 years, 34 times as much nickel, even two times as much steel to support the energy transition.

BHP’s Jansen potash project in Canada.

“We were closest to big markets. We had deposits that were relatively close to surface and close to tidewater. That’s not the case in copper, nickel and some of the other metals.

“We’ve got less of an advantage over other nations in those metals, so we’re going to have to work two or three times as hard to unlock this opportunity, which comes back to skills, innovation, productivity.

“All of these are going to have to be areas of focus if we’re to continue on this great trend … of the resources sector contributing to the prosperity that we’ve seen in Australia over the past four or five decades.”

BHP, for its part, has a number of new commodities in the pipeline with various operations in Australia.

– 30 –

“You’ll find examples like that, but I don’t think we should start from the perspective that all processing should happen onshore here,” Henry said. “There’ll be times when there’s better returns for that processing to occur overseas.

“But the more Australian is able to do to put the settings in place, that makes it possible to invest economically in processing here because it helps to diversify the economy.”

Globally speaking, it’s no secret Australia has fared better than many countries over the past two-plus years, and the resources industry has been a huge driver of that sustained value.

While Henry is aware of the importance today’s resource sector has played in

that strong pandemic response, he is also cognisant of the fact untapped opportunities remain.

“The resources sector remains very important, (but there’s) still lots of opportunity to be pursued there,” he said.

“If you look at the future for Australia on a multi-decade horizon, it is going to be important that we’re investing in developing new businesses, new sectors.

“And given that we’re such an exportoriented trading nation, we’re going to have to have the ability to access expert markets.

“But we will all need to lean into supporting small- to medium-sized businesses develop new products, new services that can be be leveraged here in Australia, but also overseas.”

VOL UME

2 | 2022

16 NUM BER

Australian Investment Resources & BIG RARE THE NEXT ERS EARTHS PLAY

MINING’S NEXT MEGA-CITY AUSTRA

Australia’s

bright future

UM

Austr Resources alian & Investm VOL UME

OLUME ENT | V

CHASING THE FOSTERV NEXT ILLE AUSTRA

BER 16 NUM

LIAN RE SOU

2 03

SIX KEY T H

02 -9960

mine management.

Subscribe to Australian Resources & Investment to stay up to date with the latest news on ASX-listed mining stocks and commodity prices.

australianresourcesandinvestment.com.au

THE RISE

EMES

9 772201 996000

GST $14.95 incl.

ISSN 2201

996000 9 772201

960

GST

ISSN 2201-9

$14.95 incl.

and examine investment, exploration and extraction, recruitment, engineering and

s in 2022

R 1

include the best minds in the industry

Commodit ie

16 NUM BER

1 | 202 2

ent

AUSTRALIA’S UNT COMMOD APPED ITY

E 16 N UMBE

around the world. Special feature articles

global team unified by technology a common solutions purpose: to the wor countries. creating adv ld’s Developing anced, sust new technolo water challenges acro conserved, ainable ss more than gies that will and re-used services mov 150 improve the in the futu re is central e, treat, ana way water to our wor is used, lyse, mon public utili itor and retu k. Our pro ty, industria ducts and rn water to l, residential the and commer environmen Sustainabil t and in cial building ity is at the services sett core of eve our footprin ings. rything we ts leave a do, and we positive imp community aim to ens act on the as we striv ure environmen e to build Our commitm a healthie t and the r and mor wider ent to wat e water-secu er quality and global re world. is Xylem’s scale, with fore mos our corporat aiming to t priority at provide edu e social resp both an org cation and anisational onsibility support hea equitable program lthy lives and access to Watermark help build safe water resilient com and sanitati on to munities arou nd the wor ld.

IRON ORE MINERS BOUNCE BACK

MENT | VOLUM

resource developments in Australia and

We are a

RCES & INVEST

to providing cutting-edge insights into

ENCY

VESTM CES & IN

is the country’s premier journal dedicated

A CURR CREATING OF ESG OUT

IN PL ATIN

SOUR LIAN RE

Australian Resources & Investment

E OF THE MAKING SENS ND US WORLD AROU

OF VANADIU

M

GOLD

GOLD’S CONTRIBUTION TO PORTFOLIOS – AND TO SOCIETY Geopolitical events are not the main reason investors should have a strategic allocation to gold.

As attention focuses on the devastating events in Ukraine, investors are starting to ask about geopolitics’ impact on the performance of gold.

W

hile it is seen as a hedge against risk, geopolitical events are not the main reason investors should have a strategic allocation to gold.

The fundamental roles gold plays in an investment portfolio are its contribution to returns, diversification, liquidity, and its overall impact. Unlike many other assets, gold benefits from diverse sources of demand. It’s an investment asset (for both consumers and institutions), it’s a reserve asset in the international monetary system, it’s used in jewellery, and it has technological utility.

These areas of demand have different economic and financial drivers – technology, jewellery and consumer investment tend to be more pro-cyclical, whereas institutional

– 32 –

investment tends to be counter-cyclical.

Put simply, this means that gold can behave differently to other asset classes.

This is demonstrated through its lack of strong correlations to other asset classes, particularly in downturns. There are market and structural characteristics that play a role, too. Gold is highly liquid – over $145 billion is traded every day – it’s no one’s liability, carries no credit risk, and is scarce, historically preserving its value over time.

It’s these reasons – liquid nature, diversification potential, ability to generate returns, and overall portfolio impact – that are the foundation of gold’s strategic role as an asset class.

So while being a hedge against risk is one of the key reasons for investing in gold, it’s far from the only reason.

In addition to geopolitical events, inflation, supply chain concerns and further COVID uncertainty have driven interest in gold. Inflation, in particular, seems to be a long-term driver.

As the global economy and financial markets begin the COVID recovery, a chief concern for many investors is the somewhat novel prospect of “high” inflation. This is particularly true in the US, where investors have been used to low levels of inflation for more than three decades.

Many monetary authorities initially felt inflation would be temporary, but that consensus has shifted, with some central banks now acknowledging that inflation is here to stay.

Although the output gap and unemployment remain high, a quick

AUSTRALIAN RESOURCES & INVESTMENT

In addition to geopolitical events, inflation, supply chain concerns and further COVID uncertainty have driven interest in gold. economic recovery has left many areas of supply tight. Commodity prices are reflecting this situation, as are shipping rates and business inventory data. In addition, the massive increase in global government debt, as well as central bank acceptance – if not promotion – of higher inflation suggest the risks are, on balance, skewed to the upside.

The interest rate outlook is also having an impact, and while the markets expect rate increases and a strong US dollar – a negative for gold price performance – real and nominal rates should remain at historically low levels.

World Gold Council research shows that gold has been an effective inflation hedge and has performed well into central bank hiking cycles. This, coupled with healthy consumer demand (jewellery, bar and coin), means the strategic rationale for gold remains compelling.

In addition to contributing to investment portfolios, it’s important to understand the broader contributions that gold – and the gold industry – make towards societal needs.

Responsible sourcing and broader environmental, social and governance (ESG) concerns are of huge importance to investors. The Australian asset management industry is at the forefront, with some estimates indicating that close to 60% of professionally managed assets in Australia have an The WGC believes that when responsibly produced, gold mining can make a positive contribution to society.

ESG lens applied to them. Ensuring that our industry operates responsibly and has a realistic plan to reduce emissions in line with the Paris Agreement, has been at the forefront of our minds.

In response, the World Gold Council launched the Responsible Gold Mining Principles (RGMPs) in 2019.

These are a set of 51 detailed principles that define responsible gold mining. We have also published a significant amount of research regarding gold and climate change, including the steps our industry is taking to decarbonise.

We strongly believe gold makes a positive impact on society, including the positive contributions our members make in their countries of operation, including Australia. This is why we published a report, ‘The Social and Economic Contribution of Gold Mining’, setting out the contribution that our members make in terms of employment, investment, and tax contributions.

The report shows that our members contributed US$37.9 billion of gross domestic product (GDP) to the countries in which they operate. More than 200,000 people are employed directly, and 1.2 million are employed in the wider supply chain that our members support. These are just some of the parameters and it’s clear that, when responsibly produced, gold mining can make a positive contribution to society.

Andrew Naylor Andrew joined the World Gold Council in 2016 and since 2020 has led our regional office in Singapore.

Originally part of the central banks and public policy team, Andrew was responsible for our 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.

– 33 –

ESG

CREATING A CURRENCY OUT OF ESG Epiroc and MineRP have developed a groundbreaking solution that converts ESG into a tangible currency, enabling mining companies to transact their ESG performance.

E

piroc is at the forefront of innovation in the mining industry and is constantly developing new machinery and technologies to improve operational productivity.

An industry trailblazer in so many ways, Epiroc is now focused on cracking the environmental, social and governance (ESG) code and has a new solution that could change the game.

Epiroc acquired MineRP in May last year and, in doing so, brought a leading software company into the fold. Together, the two are harnessing MineRP’s renowned digital platform to pioneer a new frontier in ESG tangibility and understanding.

“A lot of companies are going out there and putting an ESG solution on the table but we’ve thought about ESG differently,” Jacques Erasmus, MineRP business transformation and ESG executive, told Australian Resources & Investment.

“Because of our experience in designing mines, planning and executing on our platform, we came to the realisation that if companies are not infusing ESG into their day-to-day operations and, more importantly, into their decision-making, they are putting themselves at a significant disadvantage.”

When a chief executive officer of a mining company goes out to the market and makes a promise about how their company will operate and build value for its shareholders., this promise might comprise various ESGlinked pillars such as building a values-based culture, optimising capital allocation or prioritising health and safety.

The company might point to its free cashflow numbers to demonstrate its growth efforts or provide its high-potential incident (HPI) figures to highlight the safety of its processes. But how can this organisation convert its ESG performance into a transactional form?

Leveraging MineRP’s platform, the Triple Balance Sheet, was born.

“The power of our platform is to enact a company’s strategy and we do that through three lenses – the science of mining, the business of mining, and the conscience of mining,” Erasmus said.

“Why the conscience of mining? Well, ESG is intangible. ESG doesn’t have a currency and therefore it is difficult to transact it or for management to enable it because it’s always something on the side.

“But if it is given a currency, it can be transacted in a balance sheet and income statement fashion.

“Hence our Triple Balance Sheet.”

Whether it be share price, market capitalisation or net present value (NPV), there are several metrics to understand the value of a company. However, does the company’s value remain the same when its ESG performance is factored in?

Epiroc and MineRP are changing the ESG game.

– 34 –

AUSTRALIAN RESOURCES & INVESTMENT

This is the first time we are linking mine planning to execution and we do that at a very granular level.

The Triple Balance Sheet converts ESG into a currency.

Erasmus used an example to flesh out the idea.

“I have three mines – mine A, mine B and mine C – all of which produce gold. And each one of those produces one ounce of gold.” he said.

“If I were now to say that each one of mine A, B and C produces one ounce, but mine A has a minus-50 carbon footprint, mine B has a net-zero carbon footprint and mine C has a plus-50 carbon footprint.

“Let’s say gold is trading at $US1950 per ounce. If I was now a stakeholder, a new investor or a purchaser of the ounce of gold, considering what ESG has changed in value, what would the cost of mine B’s ounce of gold be?

“They would pay $US1950 as that’s the recognised value today and mine B has a zero-carbon footprint. If I were now to say, what would be the cost for mine A, remembering it has a minus-50 carbon footprint?

“I would argue it would cost significantly more than $US1950 because I’m getting more value from that ounce of gold.”

Under the Triple Balance Sheet premise, when a mine has a negative carbon footprint, because it’s ESG performance is favourable, there is now a currency linked to

each ounce of gold it produces. The company can then use that to trade.

ESG currency would work the other way for a plus-carbon mine.

“If I were to go to mine C, I’m saying, sometime in the future, I have to pay carbon tax on it because it produced the ounce of gold at a positive carbon effect,” Erasmus said. “The premise we are using is by introducing ESG as a significant measure of value, we are actually changing the playing field.”

To better explain the Triple Balance Sheet, Epiroc and MineRP refer to its three core lenses – the science of mining, the business of mining, and the conscience of mining.

The science of mining showcases the unrivalled capability of the MineRP platform.

“Through the science of mining, and this is revolutionary, we are consolidating all the mining activities onto one platform. No other software does that,” Erasmus said.

“We then come up with what we call a master business schedule, which then drives everything else in the ESG space. So the platform now gives companies the capability to analyse, predict and optimise through its master business schedule.

“This is the first time we are linking mine planning to execution and we do that at a very granular level.”

Companies are then able to derive a smart bill of resource (BoR) or smart bill of material (BoM) which enables them to link their financials to their mining activities by assigning the right resource or equipment to a particular task.

This can be pre-planned or done in real-time, making the Triple Balance Sheet a dynamic platform that enables mining companies to make changes on the fly.

But how does this link back to ESG? “We started off by saying we have a CEO promise,” Erasmus said. “We then operationalise that promise into a strategy by breaking it down into the mining activities and into the standard operating procedures (SOPs).

“This doesn’t just tackle the technical specifications, nor does it just look at the business of mining, such as the finance, procurement and so forth. It now brings in the ESG commitments.

“ESG is a very broad topic but what we have been able to do is link an ESG indicator to the SOP and to the bill of material. Therefore, we can now infuse ESG into the execution.”

– 35 –

ESG

The Triple Balance Sheet enables mining companies to make real-time ESG changes.

The ESG indicators include environmental, community, carbon, diversity and governance. Along with forecasting the potential impact of mining activities and operational finance, through the Triple Balance Sheet companies can anticipate the ESG impact before it happens.

Companies can prevent potentially harmful ESG occurrences from transpiring in their activities, and if a company is not content in its ESG performance at any given time, changes can be made in real-time.

“From the CEO boardroom level to a mine overseer, the Triple Balance Sheet gives the ability to say, every mining action or activity has three impacts,” Erasmus said.

“It impacts the reserve and resource, which is R&R reconciliation, it impacts working capital and operational cost. Then there is an ESG element.

“We are now able to offer all three of those perspectives next to each other and provide the optionality to choose.

“For instance, if I’m a miner who only wants to buy from companies who have a net-zero footprint, I can identify companies who provide consumables, resources or equipment in a zero-carbon manner.

“But this only touches ESG: I don’t understand what impact that would have on

– 36 –

my costing; maybe that cost me a lot more.

So that can now be factored in.

“And let’s say, when I move from dieseloperated equipment to battery or hydro fuel, there is an efficiency differential. I can now build that into my life-of-mine, and considering my life of mine and my resource I’m going to mine differently, because timing now plays a role.

“I can now put those three dimensions – working capital and operational costs, R&R reconciliation, and ESG – together and see what the answer is,” he said.

“Nobody else has been able to do that and we believe that is the key. We are now offering an all-dimensional decisionmaking platform which considers all three critical factors and companies can decide how they want to weight it.”

The Triple Balance Sheet is currently being deployed across Epiroc and MineRP’s current client base as an update to an existing solution. The companies also understand that not all clients want to go with the big bang approach, so they have modularised the solution so it can be scaled at the client’s request.

“We have numerous scaling projects happening across the world,” Erasmus said. “The client sees the solution

operating in one area and can then scale it across their business. Then as the client does the scaling, their supply chain gets all the benefits as the solution is increasingly deployed.”

Given ESG’s current bearing in the local mining industry, Epiroc’s business line manager – technology and digital, Leon Cosgrove, said the platform would become increasingly relevant in Australia.

“It’s going to be a major component of how we sell MineRP and it’s also going to be part of Epiroc’s broader digital view and our framework on how we present to our clients,” he said.

“Every client that we’ve talked to, every one of them is being questioned about how they’re going to address ESG. A lot of that is coming from a decarbonisation directive and Epiroc is leading the batteryelectric vehicle space and so forth. But with this solution, we’ve reached a new level of operationalisation.”

ESG can be a complicated concept to understand, let alone operationalise. With the Triple Balance Sheet, Epiroc and MineRP are not only better informing the industry of ESG’s many intricacies, but they’ve fostered a new currency with which ESG can be made tangible and be transacted.

, D E E N U O ET. Y R RR .

E V E N E F O T ON IS A H W D IT RCH A N I E F ES TH

RELY ON AUSTRALIA’S MANUFACTURING, MINING AND INDUSTRIAL HUB 70,000 monthly users can’t be wrong. Find what you’re looking for with over 12,000 business listings and 8,000 specific product listings. Access relevant information and resources, empowering you to make a qualified purchase decision. You can always rely on your industry hub.

F E R R E T.C O M . AU

FERRET GROUP OF WEBSITES

MHD Supply Chain

ESG

Sustainability infused with digital expertise Xylem aims to enable the reuse of 4.3 billion cubic metres of water by 2025.

Xylem and its brands have been conquering global water problems for more than 100 years, pioneering a new frontier in sustainability and water security.

W

ith water scarcity an increasing global concern, the world needs to be smarter and more sustainable in how it uses this valuable resource.

According to UNICEF, half of the world’s population could be living in areas facing water scarcity by as early as 2025. As a waterdependent sector, mining has a critical role to play in water conservation moving forward.

Sustainable water management underlines environmental, social and governance (ESG) obligations, and as more investors side with the green transition, stagnant mining companies risk being left out in the cold.

As one of the world’s leading water technology companies, Xylem is committed to “solving water” and has cracked the most

– 38 –

difficult codes to ensure the resource is safely, sustainably and efficiently managed across industries.

As part of its 2025 sustainability goals, Xylem aims to enable the reuse of 4.3 billion cubic metres (or more than one trillion gallons) of water. Improving water reuse in the mining industry will play a key role.

According to Xylem Australia and New Zealand managing director Brian Krishna, sustaining water quality is crucial to achieving this objective.

“Most mining in this country has a large water impact, whether it be underground mining or open pit,” Krishna said. “Therefore, our view is how can we take that water and get it out of the mine site.

“Then, how can we return that water back to the environment and return it in better condition than what we’re doing with it at the source.”

Water goes through several steps before it can be successfully removed from a mine site, and the resource can easily be contaminated on the way out. Mineral sulphides can leach from excavated rock or water can mix with other chemicals used on a mine site.

To solve water on mine sites, Xylem considers an operation’s entire wastewater process. The company then recommends a holistic, modular treatment solution to ensure water can be returned to its original quality.

Xylem’s efficient water pumps can condition, filter and disinfect water, while

AUSTRALIAN RESOURCES & INVESTMENT

Xylem Australia and New Zealand managing director Brian Krishna.

reducing mining companies’ energy costs at the same time. Reclaimed water can then be used for irrigation or agriculture off-site.

Krishna said treated water can be fed back into mining operations as well.

“It’s important to consider how we reuse water back through the mine site or through other parts of the operation to ensure we’re not taking water from other sources that may put a strain on the natural environment,” Krishna said.

“Water scarcity is quite common across the Australian landscape because of the geographical country we live in.”

Many Australian mining operations are situated in some of the world’s driest, most remote locations, meaning water is often at a premium. Amid global climate change concerns, water scarcity could continue to worsen into the future.

And with global warming comes more severe weather events. Krishna said sustainability was not only about water reuse but also building capabilities to better anticipate impending emergency.

“We need to build more resilience in our sustainability across mine sites when it comes to natural disasters,” Krishna said. “With some of these situations you can only plan for so much, and all of the best predictions around our climate outlook still suggest we’re going to reach a crisis point.

“How do you get ready for that? Being sustainable means we can put in digital technology now that can give us analytics linked to weather stations connected to a mine site that can help faster predict what is coming and what we need to do to prepare and mitigate those severe weather events.”

Xylem has responded to natural disasters for more than 35 years, working with countries and cities to create contingency plans to map out emergency response strategies.

The company has also provided pumping equipment and turnkey installations so people can bounce back from extreme weather events.

In flood situations, Xylem can connect its water monitoring analytics with pump infrastructure to unlock water storage on mine sites.

“With flooding, you might have pumps to pump the water but you’ve got nowhere to send the water and nowhere to store it,” Krishna said.

“We’re able to use analytics to measure the pipe storage on a mine site and know where the empty pipes are to determine where the water can be stored, because you might have to retain or store that water for five or six hours until the flood water has receded.”

Xylem continues to push the envelope of innovation in water management and the mining industry connected to that.

The company has constantly evolved to stay ahead in an ever-advancing world and become a market leader in research and development (R&D).

“Xylem has been connected to the mining industry for more than 100 years, so we’ve got a long history there,” Krishna said.

“What I’m seeing with all of our equipment and what the company is doing in the last 10 years is that we’re making everything smart, and you’ve got this term called ‘smart water’.

“So it’s using smart water monitoring methods on mine sites to measure on-site and off-site discharge limits, for example. It’s looking at infrastructure that’s been there for a long time – it’s ageing, it’s breaking, often it’s highly maintenance-intensive.

“It’s not just about replacing it because replacements often come with downtime, but also high capital costs. This is where we take our mechanical equipment and link it with something digital.

“Then we can provide analytics and talk about how we can better use or maintain that equipment. Because if we can do that, we can reduce energy consumption, our carbon footprint and, ultimately, preserve water and use it a lot better.”

Through its sustainability goals, Xylem is not only supporting customers and industries, but also combatting global poverty, providing clean water and sanitation for those who need it most.

Because for Xylem, sustainability is about creating a more water-secure world for future generations.

Water scarcity is an increasing global concern.

– 39 –

ESG

DISPROPORTIONATE IMPACTS OF DECARBONISATION Cross-border trade will play a key role in achieving sustainability targets for the global fight against climate change.

R

The journey along decarbonisation pathways has raised a number of equity issues around the world.

ealising a low-carbon economy may usher in a new era of globalisation and peace, but it first requires each nation-state to deploy a common set of scope 1, 2, and 3 standards to account for greenhouse gas emissions.

The UN Sustainable Development goal, “take urgent action to combat climate change and its impacts”, details the need to “promote mechanisms for raising capacity for effective climate change-related planning and management in least developed countries and small island developing states”.

However, the journey to achieve this goal has raised a number of equity issues for developing countries that have not been part of the dialogue on trade regulations, ultimately perpetuating the divide between high- and low-income countries.

In order to survive, developing economies will need access to supply networks for greentech solutions and trade in environmentally preferable products.

Cross-border trade will play a key role in achieving sustainability targets for the global fight against climate change.

Differentiating between emission types is fundamental to understanding how lowcarbon trade policy mechanisms work: • Scope 1 refers to direct emissions from owned or controlled sources such as

– 40 –

mobile combustion, fugitive emissions, or process emissions • Scope 2 is indirect emissions stemming from the generation of purchased electricity from a utility provider • Scope 3 includes all other indirect upstream and downstream emissions that reside in a company’s value chain A less well-explored challenge worth considering is the balance between trade and emissions reduction, and how policies implemented to reduce greenhouse gas emissions (eg the EU Carbon Border Adjustment Mechanism [CBAM]), will require greater relative sacrifices by developing nations than by their developed counterparts.

OPEN TRADE BENEFITS THE D E V E L O P I N G WO R L D While trade is traditionally associated with negative environmental implications due to transport-related emissions, it plays a pivotal role in creating more inclusive, resilient and sustainable economies.

Developing countries are often those that are dependent on agriculture and therefore extremely vulnerable to weather patterns.

Greater food insecurity is faced in dry-land areas in Africa, Asia and South America, while crop yields close to the equator have fallen.

Countries such as these urgently need to

adapt to the threats of climate change and access to new technologies, enabled by global trade systems, which can help build their economic resilience.

However, in response to growing concerns about sustainability across supply chains, tariffs on goods with high carbon content, such as the CBAM, are being implemented by the developed world in an effort to achieve low-carbon goals.

THE EU CBAM In an effort to achieve the EU’s target of a 55% reduction in carbon emissions by 2030 and to become a climate-neutral continent by 2050, a CBAM is set to be fully operational by 2026.

This measure is designed to offset the regulatory costs borne by domestically produced carbon-intensive products while preventing the risk of carbon leakage via a carbon price on imports of products.

Products most affected are those that generate significant emissions during manufacturing/production, such as cement, iron and steel, aluminium, fertilisers, and electricity.

By the end of the transition period, the effectiveness of the EU CBAM will be evaluated to determine whether an extension of its scope to include additional products and services and ‘indirect’ emissions is required.

AUSTRALIAN RESOURCES & INVESTMENT

The CBAM will ensure European emission reductions contribute to a global decline rather than pushing carbon-intensive production outside of the continent, simultaneously encouraging industries outside the EU and international partners to take steps in the same direction.

CBAM EFFECT ON THE D E V E L O P I N G WO R L D While the CBAM is designed to encourage partners to minimise the production of goods that emit greenhouse gas emissions and exports of these products to the EU, not all partners are capable.

For example, although China, Japan and South Korea have committed to CO2 neutrality targets, emerging countries like India and Indonesia have less flexibility to implement zero-carbon targets when facing acute health/safety challenges more frequently than their developed counterparts.

Indonesian perceptions of the EU CBAM will be heavily influenced by ongoing conflict over palm exports, while India perceives the EU CBAM as strongly protectionist, discriminatory towards developing countries, and contrary to international laws and agreements.

There are a number of reasons the introduction of a CBAM can be perceived as protectionist and “unfair” in the developing world.

The CBAM causes barriers to trade, unfairly penalising the exports of developing countries that do not have the infrastructure or resources to quickly and feasibly decarbonise.

While most developing countries currently have tariff- and quota-free access to the EU market due to EU unilateral preference schemes or economic partnership agreements, an EU CBAM would negatively impact this relative advantage if it applied to developing countries’ exports. Unlike the developed world, low-income countries don’t have the capital to decarbonise quickly enough to produce in a carbon-efficient manner.

The EU CBAM could also reduce opportunities for export-led development. According to the Bank of Finland, a CBAM of $28 per tonne of CO2 on imports is equivalent to an average import tariff of two per cent. However, in order to keep global temperatures below 2°C, the International Monetary Fund (IMF) estimates that a carbon price of approximately $75 per tonne of CO2 will need to be in place by 2030.

Further, while the CBAM currently only targets imports that result in scope 1 emissions of greenhouse gas emitted during the production process, the EU could potentially expand this to cover other sectors and indirect forms of emissions (ie scope 1 and 2 emissions), leaving them more exposed to tariffs.

According to the Centre for European Reform, if agricultural emissions were targeted, as an example, an additional $3.6 billion of developing country trade could be subject to the CBAM.

T H E D E V E L O P E D W O R L D – W H AT D O E S T H I S M E A N F O R AU S T R A L I A? Conversely to the developing world, the EU CBAM will have a limited impact on Australian export revenue in the short term, as few Australian goods compete directly with local industries that are covered within the EU Emissions Trading System.

While Australia’s largest export to Europe is metallurgical coal, the EU scheme does not currently cover “fugitive” methane emissions released during coal mining, where emissions emitted from coal are expected to be counted in the location where it is burned, not the location it is mined.

In addition, according to the Australian Bureau of Statistics, carbon-tax-exposed goods only make up a small portion of the whole economy, with Australian emission-intensive exports only worth five per cent of total export value in 2019–20. Only one per cent of the total value of these emissions intensive commodities went to EU countries.

Complete and accurate greenhouse gas emissions disclosures provide greater clarity to investors, enable better decision-making, and help guide capital towards companies consciously addressing their impact on climate change. Given Australia has greater traceability and transparency across supply chains, as an exporter, investors have a degree of comfort. Australia’s leadership in this capacity could help illuminate a path for developing countries.

However, Australia could be indirectly affected by the CBAM if large amounts of local metallurgical coal are used to make polluting steel in China, for example. If EU demand for iron and steel from economies such as China declines due to the CBAM, demand for Australian thermal coal will also decline along with it.

There are also 43 manufacturing processes that are considered to be Emissions Intensive and Trade Exposed (EITE) in Australia. Primary metals account for the vast majority of Australia’s EITE exports (88 per cent in 2018–19 and 87 per cent in 2019–20).

The underlying issue is that some of these primary metal goods are produced for the sole purpose of the export market. On average, 83 per cent of alumina and 92 per cent of aluminium produced in Australia are exported, taking up over 50 per cent of EITE exports to countries where carbon prices are in place or under consideration.

A CBAM is therefore a serious risk for some goods in Australia, and potentially a serious opportunity for those that decarbonise production methods.

While all countries should accept responsibility for tackling a shared threat like climate change, it is perhaps unreasonable to expect developing countries to shoulder the same burden as those that are more developed and have contributed a larger share of cumulative carbon emissions.

Alexandra Colalillo is an economist and manager at a multinational professional services firm in Western Australia. A key part of Alexandra’s role involves assisting global and mid-tier mining companies respond to risk, fluctuating economic conditions and building strategies to minimise financial and operational uncertainty.

She also hosts her own economics podcast, The Shady Economist, designed to break down topical Australian economics and geopolitics.

Alexandra writes about the local, national, regional, and international economy as it relates to the mining and oil & gas sector.

– 41 –

ESG

CONQUERING ESG FROM ALL ANGLES Backed by its esteemed software division, RPMGlobal has developed an end-toend ESG solution that considers the project lifecycle from start to finish.

F

or more than 50 years, RPMGlobal (RPM) has been the mining industry’s trusted partner for advisory, consultancy and soft ware.

The company has constantly evolved its capability and on its path to fostering better and more sustainable mining practices, RPM has also become a leader in industry training.

RPM’s next development sees it harnessing the world of environmental, social and governance (ESG) to assist companies in understanding their business profile and reputational risks.

While RPM has provided ESG-specific services for years, it acquired Australiabased ESG services company Nitro Solutions in June 2021 and established its dedicated ESG division, before adding environmental consultancy services firm Blueprint Environmental Strategies in September 2021.

Acquiring a copy of ESG-focused soft ware RPMGlobal is the mining sector’s trusted partner for advisory, consultancy and software.

– 42 –

Eden Suite in December 2021, RPM has a world-leading platform at its disposal with the flexibility to further extend, integrate and develop soft ware specifically aimed at the sustainability space.

With the foundations set, the company’s ESG service offerings are now in high demand and, according to RPMGlobal executive consultant David O’Brien, it’s supporting clients on both the operator and investor sides of the coin. “(The challenge) can be approached from two sides. There’s the operator/issuer side – the people with mining projects that are looking to raise capital. Then there’s the investor/lender side,” he said. “(The investment side relates) to people with money looking for a home. And there’s been a huge investor focus on ESG in recent years – nobody wants to end up in the papers for the wrong reasons – but

it now goes beyond that to issues like climate commitments that various banks or investment funds have made. “(Investors are looking to) exclude any investments from their portfolio that they don’t consider to be meeting their standards on ESG.” ESG can be considered from hundreds of angles. When it comes to advising on a framework, RPM sits down with its clients to understand their immediate landscape.

“We workshop with companies to identify the frameworks that best reflect their values and the issues they’re dealing with,” O’Brien said. “We look at their stakeholder concerns, whether that’s investors or lenders, their customers … and the community, however you define that and whoever is impacted.

“Then the next step is to look where they are on the road to alignment with those frameworks.

AUSTRALIAN RESOURCES & INVESTMENT

“Where RPM is unique is and offers competitive value is the advantage of truly understanding the issues related to mining, and mining’s investors and customers.

“We understand where there are gaps in clients’ alignment towards specific projects that need closing. Things like a decarbonisation study or haulage analysis, to provide value you need to deeply understand mining and associated processes, and this is where RPM can go the step further and help with the implementation.”

Having supported the mining industry through decades of evolution and advancement, RPM understands the sector’s workings back to front. It’s an expertise of the entire mining value chain, from the mining companies to the mining equipment, technology and services (METS) companies, investors and beyond.

This is just one trait that separates RPM’s ESG solution from the competition.

“It is our deep domain expertise in mining and mining-related infrastructure that makes us stand out,” O’Brien said. “We also have the technology to support it. We have a very sophisticated soft ware business that we are able to lean on to support the strategy that’s developed.

“This could be simulations to see how your mine will run with electric trucks, financial modelling to see what the cost of that upfront investment will do to your life-ofmine financial model, or mine scheduling to determine the optimum ground disturbance.”

In an ever-digitising mining industry where expertise in soft ware and technology is at a premium, RPM’s ability to provide both ESG and digital expertise is a significant differentiator. O’Brien elaborated on RPM’s soft ware capabilities.

RPMGlobal’s ESG solution uses a world-leading digital platform.

“Our ESG knowledge and these types of criteria and decisions are feeding into the ongoing innovation of that soft ware and adding features that support decision-making around these aspects,” he said.

Whether RPM is consulting a mining or METS company, a lender or investor, ESG poses many different questions that necessitate critical thinking, creativity and flexibility. In many situations, having access to a versatile soft ware offering is critical.

“When talking about mine decarbonisation, not all mines are necessarily suited to electric trucks,” O’Brien said. “It depends on the maturity of the pit, the type of mineralisation and maybe certain pinch points. It needs careful consideration; if all your trucks are queuing up waiting to replace their batteries, then you’re not moving dirt.

“So it’s about looking at those kinds RPMGlobal’s ESG solution harnesses a deep domain expertise in mining.

of issues, making the most of the existing soft ware offering and adopting it to some of these challenges.”

RPM recently completed a haulage decarbonisation analysis for a major international mining company to assist in the decarbonisation of its operations. It was imperative for the miner to reduce its diesel-fuel usage.

The company suggested the possibility of electrifying its haulage operation, through technologies not just limited to the trucks, but also the overhead trolley line infrastructure and other integrations.

This specific combination of technologies had never been applied to mining and RPM had no existing reference on which to base its solution.

Nevertheless, RPM adopted a dynamic and strategic approach to the project scope that enabled solutions to be developed and changed in response to study results and client feedback.

RPM was able to utilise its open-pit metals scheduling solution, OPMS, and discrete event simulation tool, HAULSIM, to model options to chart the volume of diesel that could be saved, and the depth of battery discharge required.

This was just the beginning of RPM’s solution for the mining company and while it addressed one key concern for the client, RPM has ESG capabilities built into its soft ware solutions.

RPMGlobal considers the project lifecycle from start to finish and nothing is unachievable, whether a client needs assistance on initial approvals, requires advice on mine closure and rehabilitation, or anything in between.

– 43 –

IRON ORE

Hawsons Iron’s green steel opportunity As steelmakers adapt to decarbonise their operations, they will require high-grade iron ore for ‘green steel’ production. Hawsons Iron has this in spades.

J

ust outside Broken Hill lies one of the world’s most promising undeveloped iron ore projects.

The Hawsons Iron project in New South Wales is gaining global attention for its Hawsons Supergrade product which, at 70 per cent iron (Fe), is poised to be one of the highest-grade Fe products on the seaborne market.

McKinsey & Company partner Christiaan Heyning didn’t mince his words when he spoke about the market at the 2021 AusIMM Iron Ore Conference in November.

“Demand for products will differentiate depending on what is sold and, to make it very simple, the purer the better and the higher Fe grade the better,” he said.

The backdrop to the conference was “green steel” and the important role Australian iron ore producers can play in the world’s netzero aspirations.

Steelmakers have an obligation to reduce their emissions and can only do so if their steel is derived from a high-grade Fe product.

Up to seven drill rigs are mobilised at the Hawsons Iron project.

– 44 –

This is what makes the Hawsons Iron project so important, not to mention intriguing.

Hawsons Iron’s magnetite orebody sits within siltstone, making it a softer resource than the hard-rock orebodies found in Western Australia and internationally.

The fact the ore is soft means less power is required to extract and process the magnetite to a higher grade, but the absence of clay in the orebody also means less water is needed in the processing phase.

Using less power and water means a lowercost operation and a more sustainable project.

“We’ve got a very soft ore compared to the mines in the west,” Hawsons Iron executive chairman Bryan Granzien said.

“Our studies are showing, and we’ll confirm, that the energy consumption for crushing and grinding our magnetite could be up to 75 per cent less than the magnetites in the west.”

Magnetite is lower grade in the ground compared to hematite but results in a higher-grade end product. This is because

magnetite has fewer impurities – another key differentiator of the Hawsons Iron orebody.

“Magnetite has been a bit of a poor cousin to hematite in the past, but magnetite is very much the future because of the higher grade,” Granzien said. “To reduce carbon you need higher-grade products and ours at 70 per cent is top of the tree.

“Hematite is diminishing in terms of resources available, but clearly it’s not as good of a feedstock for low-emissions steelmaking.”

Located 60km south-west of Broken Hill in mining heartland, the Hawsons Iron project is close to key infrastructure such as solar and wind power, meaning the project has established renewable energy sources on its doorstep.

In February, the company expanded its bankable feasibility study (BFS) to include an option with a potential production capacity of 20 million tonnes per annum (Mtpa), an extra 10Mtpa from the project’s 2017 prefeasibility study (PFS).

The option will explore a direct-to-port

AUSTRALIAN RESOURCES & INVESTMENT

As the world’s most essential construction material, steel is responsible for seven per cent of global carbon emissions, and that figure is rising. underground slurry pipeline and port opportunities within the eastern Spencer Gulf of South Australia, with the potential to further improve the project’s environmental, social and governance (ESG) credentials.

The original PFS transport option included a slurry pipeline from site to Broken Hill and then rail to port, which could be a more carbon-intensive pathway.

The Hawsons Iron BFS is due for completion in December 2022.

“This is a compelling opportunity to maximise the value of the Hawsons Iron project,” Granzien said in a statement. “The 20Mpta option has been enabled by the mineral resource upgrade announced on

Hawsons Iron executive chairman Bryan Granzien inspects samples with the team.

Due to the ‘softness’ of the Hawsons orebody, rigs are achieving 200–250m per shift.

October 19 2021, which increased indicated and inferred resources by nine and 18 per cent, respectively, compared to the 2017 PFS. “Whilst the expanded scope will assess the economic viability of this option, we expect the transport cost savings may be significant and we also expect a reduced-carbon logistics footprint and other ESG benefits.”

The BFS budget would be increased by $12.4 million to cater for the 20Mtpa option, with an extra $7.4 million attributed to an associated environmental impact study and $5 million for the pipeline and port component.

Hawsons Iron has received letters of intent and potential offtake interest for 12Mtpa of its Hawsons Supergrade product.

Granzien said the market knew a quality product when it sees it.

“Buyers will strongly influence which projects get developed,” he said. “They will be willing to support new high-grade supply

that is sustainable through the value chain and they will pay a premium for it. This makes Hawsons Iron economically viable despite iron ore price fluctuations.

“There are cutting-edge steelmakers producing low-to-no-carbon-emission ‘green steel’. They need this ore and we’re ready to provide it.”

In December 2021, Hawsons signed an equity funding agreement with LDA Capital.

As part of this deal, Hawsons can draw down up to $200 million by issuing ordinary Hawsons shares to the US investment group.

In the lead-up to the BFS, Hawsons continues to advance discussions with other potential financiers, including financial institutions, steel mills and commodity trading houses.

Hawsons upgraded its mineral resource to 400 million tonnes in October and drill programs continue to shore up the deposit.

With up to seven drill rigs mobilised on-site, the project’s BFS is advancing on schedule and rigs can achieve 200–250m of drilling per shift due to the soft ness of the orebody.

As the world’s most essential construction material, steel is responsible for seven per cent of global carbon emissions, and that figure is rising.

And as steel demand continues to increase in an ever-urbanising and -industrialising world, steelmakers are reaching a fork in the road. They must consider the variables that contribute to their carbon footprint, and what iron ore product and emerging technologies they will need to embrace.

In an industry that’s becoming high-grade or the highway, Hawsons Iron has the unique opportunity to not only be a participant in the green steel revolution, but to be a catalyst for positive change.

– 45 –

FOLLOW THE LE ADERS

FOLLOW THE LEADERS

THE LATEST EXECUTIVE APPOINTMENTS Keep up to date with the latest executive movements across the mining sector, featuring Mineral Resources, Pilbara Minerals and Energy Resources of Australia.

Peter Wade has announced his retirement as non-executive chairman of Mineral Resources (MRL), paving the way for James McClements to take over in the role.

Wade was MRL’s inaugural managing director and appointed executive chairman in 2008 before becoming nonexecutive chairman in 2012.

MRL founder and managing director Chris Ellison said the company wouldn’t be what it is without Wade’s contribution.

“When Peter joined us in 1999, he arrived with a reputation as a distinguished and impressive leader in Australia’s engineering, contracting and construction sectors,” Ellison said.

“Peter leaves MRL with all the acclaim he deserves for the leadership, expertise and guidance he has provided to our company – and its foundation subsidiaries – to enable us to become the wellrespected market leader we are today.”

Co-founder and managing partner of Resource Capital Funds, McClements joined the MRL board in 2015 and has served as the company’s lead independent non-executive director.

– 46 –

Pilbara Minerals has announced Ken Brinsden will be stepping down as managing director and chief executive officer by the end of 2022 after approximately seven years at the helm.

Brinsden has steered Pilbara Minerals through many challenges amid the lithium undulations, yet the last 12 months have been an undeniable success.

Pilbara Minerals launched its Battery Material Exchange in 2021 under Brinsden’s watch and the company is positioned to benefit from a rising lithium demand in the future.

The ASX 200 miner delivered its first halfyear profit in the back half of 2021, accruing an interim profit after tax of $114 million.

“After many exhilarating and, at times, challenging years at the helm of Pilbara Minerals, the company is now in an excellent position with a strong balance sheet, strong cash-generating capacity from our flagship asset and an exciting suite of growth projects,” Brinsden said.

Pilbara Minerals said it had commenced the search process for the next CEO. Brad Welsh has been appointed as the new managing director and chief

executive of Rio Tinto subsidiary Energy Resources of Australia (ERA).

From the Muruwari tribe of northwestern New South Wales, Welsh presented as an ideal candidate to lead the company in the rehabilitation of the Ranger uranium project in Northern Territory. He had been the acting chief executive of ERA since October.

Welsh has been appointed at a critical juncture for ERA. The company recently added an additional $600 million to the Ranger rehabilitation cost and extended the project’s timeline.

“Brad came highly recommended by Rio Tinto and was selected because of his qualifications (and) background, along with relevant experience and skills, which are all highly complementary to ERA’s existing needs,” Mansell said.

Welsh held several roles at Rio Tinto, including chief advisor closure strategy nonmanaged assets, chief advisor to the CEO – Indigenous Affairs, and acting general manager of the Weipa bauxite operation.

Agnico Eagle Mines’ chief executive officer Tony Makuch stepped down just over two weeks after completing the Agnico

AUSTRALIAN RESOURCES & INVESTMENT

Eagle and Kirkland Lake Gold merger.

Ammar Al-Joundi has taken over in his position with immediate effect, bringing with him more than 20 years’ experience in the resources industry, with particular expertise in finance and business strategy.

Al-Joundi has been Agnico Eagle’s president since 2015 and will continue in this position going forward. Al-Joundi has also served as chief financial officer of Barrick Gold Corporation.

As part of the merger, Agnico Eagle CEO Sean Boyd became executive chair, with the then Kirkland Lake CEO Makuch appointed as the combined company’s CEO. Former Newcrest Mining chief financial officer Gerard Bond has joined OceanaGold Corporation as its president and chief executive officer.

Prior to his 10 years at Newcrest, Bond spent 14 years with BHP, where he held several different senior positions during his tenure, including in the aluminium and nickel fields and as the head of human resources.

OceanaGold chairman Paul Benson said Bond was well and truly the person for the job.

“Following an extensive search, we are pleased to have attracted such an accomplished and recognised executive to lead OceanaGold forward,” Benson said.

“Gerard has demonstrated strong leadership during his career, brings a wealth of commercial and industry experience and has a proven track record of driving performance and delivering on business potential.”

New Hope Group has found its replacement for outgoing CEO Reinhold Schmidt, with acting CEO Robert Bishop taking over the role in a permanent capacity.

After joining New Hope as a financial controller in January 2021, Rebecca Rinaldi has become the company’s new chief financial officer.

Schmidt resigned in January following a period of personal leave and Rinaldi has been acting CFO since the beginning of February.

New Hope chairman Robert Millner said Bishop and Rinaldi had the capacity to lead the continued growth of the coal miner.

“Rob and Rebecca’s appointments to

the permanent roles are an endorsement of their leadership capabilities, extensive industry experience and commitment to the New Hope Group,” he said.

Guy Debelle has been appointed as chief financial offer of Fortescue Future Industries (FFI) as the company continues to advance its global green energy vision.

As the deputy governor of the Reserve Bank of Australia, Debelle will play an important role in facilitating FFI’s ambition of producing 15 million tonnes of green hydrogen per annum by 2030.

“Bringing in someone of Debelle’s economic credibility goes to the heart of our vision for FFI,” Fortescue Metals Group chairman Andrew Forrest said. “Not only are we committed to arresting climate change, we are also committed to creating economic growth, increasing jobs and growing our business profitability.

“With the leadership team, (Debelle) will drive the most optimal financial solutions for FFI’s vast technology and energy portfolio. This will be instrumental in Fortescue’s journey to become the best green hydrogen, energy and resources company in the world.”

– 47 –

EVENTS

AN UNPARALLELED OIL AND GAS ADVENTURE

There are networking opportunities aplenty at APPEA.

The Southern Hemisphere’s biggest annual oil and gas event – APPEA 2022 – brings together industry professionals from all across the world. So what’s in store for the latest instalment?

W

hen the Australian Petroleum Production & Exploration Association (APPEA) Conference and Exhibition takes place in Brisbane from May 16–19, it will do so at a crucial time for the oil and gas industry.

The Russia–Ukraine conflict has had a significant influence on the market, with global sanctions affecting oil and gas supply from one of the sector’s most prominent jurisdictions.

Yet while the discord has presented its challenges, many of these matters were already embedded in today’s oil and gas landscape.

This is what makes the APPEA Conference such an esteemed and influential event.

APPEA isn’t afraid to tackle the proverbial elephant in the room, knowing that more can be gained from confronting the big issues than ignoring them.

– 48 –

“From an APPEA Conference point of view, it (the Russia–Ukraine conflict) doesn’t change any of the thematics that we’re running with,” APPEA chief executive Andrew McConville told Australian Resources & Investment.

“Put aside the immediacy of the conflict, the issues of access to capital … as we go through the energy transition, the role of oil and gas in ensuring energy security stability.

“These were already issues.”

Driven by the theme ‘Positive Energy for a Changing World’, APPEA 2022 will tap into the sector’s financial future, while the global decarbonisation imperative also looms large.

“Thematically, we are very focused on oil and gas’ investment environment this year,” McConville said.

“That’s been writ large by the unfortunate circumstances unfolding in Ukraine, but a number of those elements were already there.

And related to that is the decarbonisation

pathway, which was a very strong theme at last year’s conference.

“What we’re seeing in Europe we were starting to see before the (Russia– Ukraine) situation, where Europe was starting to find the transition to a loweremissions future difficult.

“With Ukraine and Russia, that’s been magnified. So the conference represents a very important juncture to say, what is the role of oil and gas as we transition to net-zero?

“Or what is the role of oil and gas in ensuring any emissions reduction pathway minimises the impact on energy security, reliability and affordability?”

APPEA’s panel series was a huge success last year and will return in 2022.

This is where the conference tackles upand-coming or recent events with the help of expert voices.

AUSTRALIAN RESOURCES & INVESTMENT

APPEA brings together industry professionals from across the world.

One of the sessions will unpack the Russia–Ukraine war, while APPEA’s Energy Leaders’ Panel will see KPMG Australia Geopolitics Hub director Merriden Varrall explore the conflict in further detail.

Alongside themes of investment, decarbonisation and geopolitics, APPEA 2022 will also focus on workforce solutions and initiate dialogue around attracting, recruiting and retaining personnel. Technology and innovation will also be front and centre.

“We’ve got one exciting plenary called ‘The Shape of Things to Come’. We’ve invited original equipment manufacturers (OEMs) and exploration and production (E&P) companies to give us an insight into what’s around the corner,” APPEA director of events and member relations Julie Hood told Australian Resources & Investment.

“Often attendees will see the current technology on the expo floor. But what we’ve done is nudge companies to provide insight into what’s coming because we know technology is going to play a big part in a decarbonised future.

“Attendees can expect plenty of environmentally-focused exhibitors this year.

You’ve got the big players promoting how they’re innovating in that area.”

The Hydrogen Pavilion, a new addition for 2022, will showcase one of the most rapidly emerging industries in the sector. Delegates can meet, learn and conduct business with the likes of Worley, ABB Australia, Draeger, Synergen Met, and more, all of whom will be exhibiting their innovations.

Then there’s the KPMG Meeting Zone, where attendees can book adhoc meetings to discuss business opportunities and sign partnerships.

A jam-packed program of speakers will be attending the conference, including some of the biggest names in the business.

“We’ve got the likes of Meg O’Neill (Woodside chief executive officer), Dylan Pugh (ExxonMobil chair) and Kory Judd (Chevron Australia director of operations).

“Lucy Snelling (State Gas head of corporate and commercial) will be there.

Although it’s a national conference, we thought it was important to bring in a Queensland flavour.”

Santos managing director and chief executive officer Kevin Gallagher and Shell Australia executive vice president and country chair Tony Nunan will also present.

While it’s important to prepare a program with stature, APPEA also strives to include voices geared to the present.

“One of the great things about APPEA is, yes, we can get the big names, but it’s more important to get the relevant names,” McConville said.

“I’d much rather have someone who’s able to talk about our industry in depth and add value than have someone who reads a speech developed by the corporate affairs department and is a bit bland and vanilla.

“So what we try and do is not always go for big name X. But it might be big firm X, but the person in big firm X who has a more specialised take on a topic.

“That’s a slightly different take on the way we do things, but it’s important people get

information they can use, as opposed to some sort of corporate presentation.”

APPEA 2022 will be presented in a hybrid format, ensuring those who can’t attend inperson can still experience the conference.

Digital access will give attendees live access to the five plenary showcases, the APPEA panel series and the acreage release session. All other APPEA 2022 sessions will be made available 48 hours later and for a month following the event.

As the oil and gas industry navigates uncertain times, the APPEA Conference and Exhibition provides the perspective and insight needed to translate challenges into opportunities.

A conference for industry by industry, APPEA returns as one of the most important dates on the 2022 oil and gas calendar.

“It’s about addressing the real issues impacting our industry, with access to the best people who know the most about the issues,” McConville said.

“Every year, I’ve thrown down the gauntlet to the team and said, ‘How can we do it different and how can we make the experience even better?’, and every year the team rises to the occasion.

“It’s the biggest event of its kind in the Southern Hemisphere. There is nowhere else you can get what you get at APPEA, so we’re extraordinarily proud of it.”

The APPEA 2022 Conference and Exhibition is presented alongside principal partners, Woodside and ExxonMobil.

Full information and registration available at www.appeaconference.com.au.

A jam-packed program of speakers will attend APPEA 2022.

– 49 –

EVENTS

A PPEA CONFER ENCE A ND EXHIBITION | BR ISBA NE | M AY 16 –1 9

As the key event for Australia’s energy industry, the Australian Petroleum Production and Exploration (APPEA) Conference and Exhibition plays a major role in influencing debate and decisions, providing thought leadership and challenging the status quo.

The event also facilitates collaboration among industry members, and advocates for the issues that matter to industry, governments and the community.

In 2022, the APPEA Conference and Exhibition will be a hybrid event, meaning you can attend virtually. So if you are unable to attend the event in person, you won’t miss out, no matter where you are in the world.

The conference will highlight and discuss the important issues and challenges of upstream petroleum exploration and development on a national and international level. The conference program includes international keynote presentations, case study presentations, updates and panel discussions.

In addition, a full business and technical program, including more than 100 papers and presentations, will be delivered throughout the conference.

• appeaconference.com.au T H E 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 | J U N E 14–1 5

Australia’s largest precious metals conference and exhibition comes to Crown Sydney in June.

The two-day Australian Gold Conference brings together every aspect of the precious metals investment industry to promote and assist everyday Australians alongside those alreadyinterested investors.

Keynote speakers will share their investment insights and look at ways one can grow and preserve their wealth going forward.

ASX-listed mining companies will be present as they provide updates on their mining investment opportunities. Bullion dealers will also be on hand for those keen to know more about how and when to purchase physical metal.

Representatives from the likes of De Grey Mining, Evolution Mining, Calidus Resources and Kin Mining are locked in to present at this year’s conference.

• goldindustrygroup.com.au D I G G E R S & D E A L E R S | K A L G O O R L I E | AU G U S T 1–3

In 2022, Diggers & Dealers is celebrating its 31st year as a leading Australian mining investment event.

Diggers & Dealers combines corporate presentations by listed mining and exploration companies, alongside a large exhibition area housing more than 150 exhibitors from the sector.

Delegates include miners, explorers, brokers, bankers, investors,

– 50 –

financiers and mining service industries from around the world.

The event provides a unique opportunity for industry professionals to meet and network, visit regional mine sites, engage with media, raise finance, invest in projects and engage with the resources sector at an executive level.

An entertainment program ensures that delegates experience the best of the style and hospitality of Kalgoorlie, the unofficial gold mining capital of Australia.

• diggersndealers.com.au 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 | AU G U S T 2 5

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 last two years.

With prior events postponed, finalists from 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 August 25, 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 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 | O C T O B E R 1 7–2 2

The eighth IMARC comes to Melbourne Showgrounds in Victoria from October 17–22 after being postponed from its previous date in January and February.

Isuzu, Newtrax Technologies, Murray Engineering and Australasian Metals have confirmed their support and participation for the event, in addition to major sponsors Caterpillar, Toronto Stock Exchange and Sandvik.

The IMARC team continues to build content and themes to attract global leaders from across the mining, investment, and METS communities across the value chain.

Leading into October 2022, chief executive officers that were due to speak at the conference at the end of January will take part in a series of virtual interviews and keynote presentations as part of a brand new IMARC Insights series.

For those who registered for the previous event dates, the tickets will have automatically transferred to the new dates.

• imarcglobal.com

B U L K H A N D L I N G E X P O . C O M . A U

AUGUST

SCAN THE CODE TO GET MORE DETAILS ABOUT EXHIBITING OPPORTUNITIES.

24-26

2022

LIMITED STANDS

REMAINING SECURE YOUR STAND NOW AUSTRALASIA’S LARGEST DEDICATED BULK HANDLING CONFERENCE & EXHIBITION

AUSTRALIAN BULK HANDLING EXPO

PLATINUM SPONSOR

SUPPORTING SPONSORS

ASSOCIATION PARTNER

CONFERENCE SPONSOR

IN CONJUNCTION WITH

MEDIA PARTNERS

MHD Supply Chain Solutions