Australian Resources&Investment December 2021

VOLUME 15 NUMBER 4 | 2021

Australian Resources & Investment THE GOLD VS CRYPTO DEBATE

HAVIERON’S PROMISING FUTURE

DIAMOND MINING EVOLVES

Mining’s next chapter

BULLISH COPPER INDUSTRY

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04

LITHIUM MARKET SURGES

A SMALL STEP ON OUR PATH TO CHANGE

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

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

* **

in accordance with PAS 2060, see www.castrol.com/cneutral for more information.

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

AUSTRALIAN RESOURCES & INVESTMENT

COMMENT

A year worth remembering BEN CREAGH Ben.Creagh@primecreative.com.au

A

CHIEF EXECUTIVE OFFICER JOHN MURPHY PUBLISHER CHRISTINE CLANCY

The mining sector is coming off a year of significant development that has set it up for numerous opportunities in 2022.

ustralia’s mining sector should look back on 2021 fondly.

Despite the ongoing impacts of COVID-19, the industry has overcome almost any challenge the pandemic has thrown at it.

The limitations that border restrictions have placed on the industry aside, friendly market conditions have positioned Australian mining companies to make headway on their strategies.

Iron ore and copper hit record prices, coal prices surged to multi-year highs, and so-called battery metals such as lithium and nickel continued their revival.

Even gold, while maligned in some areas of the investment community during 2021, has maintained strength, particularly in Australian dollar terms.

In many ways, for part of the year at least, it was a dream environment for companies to capitalise on. And capitalise they looked to do, with production peaking across various key commodities and exploration expenditure for several metals hitting new levels.

As you will read in this edition, the number of resources industry initial public offerings (IPOs) on the ASX has increased to levels not seen since the mining boom around 15 years ago. This is perhaps the most notable sign of confidence in the mining industry.

In the boardroom, mining companies have also achieved plenty in their efforts to deliver on the industry’s now-urgent ESG (environmental, social and governance) agenda.

Leading from the front, the major miners have dismissed any accusation of ‘greenwashing’ by putting their ESG aspirations into action.

Barely an announcement from these companies is now released without this focus of ESG, and particularly decarbonisation, looming large over the outcome.

Expect more of the same in 2022 from these companies, as well as their mid-tier and junior counterparts, and companies throughout the supply chain.

While it will be difficult for 2022 to replicate the success of the past year, the coming 12 months will almost certainly accelerate the goals from an ESG perspective.

Australia can also expect its focus on critical minerals to step up even further. Private and government investment elevated to new levels in 2021, and many of the IPOs featured companies looking to advance critical minerals projects.

In another year, Australia’s place in the global critical minerals supply chain should be clearer as more opportunities with trade partners emerge.

The positivity is hard to resist and it’s bound to also deliver a golden age of opportunity for the resources investment community.

MANAGING EDITOR BEN CREAGH Tel: (03) 9690 8766 Email: ben.creagh@primecreative.com.au JOURNALIST 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: Pilbara Minerals 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.

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–3–

CONTENTS

I N T H I S I S SU E 6

28

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

Bright future for mining IPOs

F E AT U R E D

10 Analysis with Regina Meani 12 Pilbara Minerals in prime position 14 Havieron – the next great development

18 The aftermath of COP26 INDUSTRY OUTLOOK

32 The risks and opportunities ahead PROFILE

18 Dart Mining’s immense line-up of

ESG

42 BHP strengthens focus on ESG agenda

prospects

DIAMONDS

34 The next wave of Australian diamond miners

MINING SERVICES

44 SRK improves mine closure and rehabilitation

P O TA S H

20 Australia’s emerging potash producers

COPPER

36 Surging prices excite copper bulls

Melbourne

GOLD

24 The great debate: gold vs crypto 26 Fat Tail weighs in on the crypto challenge

EVENT SPOTLIGHT

46 IMARC to attract investors in

MINERAL SANDS

38 Victoria turns the sands of time FOLLOW THE LEADERS

48 The latest executive moves in the resources sector

RARE EARTHS

28 The future of rare earths in Australia

LITHIUM

40 Decarbonisation drive boosts lithium miners

EVENTS

IRON ORE

30 Iron ore mining and green steel

50 What’s happening in the resources industry?

42 –4–

2021

AUSTRALIAN MINING PROSPECT AWARDS

E L A S N O W O N S R G E T I M NIN E E R I K P M S ’ C E A I H I T L T TRA OR RY F LS ST S S U A ARD ERA NDU AW D MIN ING I au .

S om N c S .

A CE s rd O a w PR cta pr s Pre

p os

ed ent

by

e

S

s p on

or s

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

THE

Featherstone REPORT

BRIGHT FUTURE FOR MINING IPOS

BY TONY FEATHER STONE

Bull market, resource-sector strength and pent-up demand drive listings upsurge.

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 November 10 2021.

–6–

B

y volume, mining floats on the Australian Securities Exchange (ASX) are on track for their best year since the resources boom in 2007.

Dozens of mining companies have successfully listed and many more are on the way.

Australian Resources & Investments (ARI) analysis has identified 48 mining listings on ASX this financial year (to end-October 2021). After a few years where mining floats on ASX slowed to a trickle, the rebound reinforces the resource sector’s health.

The 48 listings raised a combined $351 million and had a total market capitalisation upon listing of $835 million. Most initial public offerings (IPOs) were for junior explorers raising small amounts. The average capital-raising size was $7.2 million.

The average share-price gain since listing was 38 per cent. The average was skewed by a handful of strong performers, but 25 mining floats have had double-digit gains so far this financial year (compared to their issue price). Six of those companies have more than doubled their issue price within months of listing.

The outlook for mining IPOs is strong. About 20 mining companies have applied for official admission to ASX in November and December. If all those companies successfully raise capital and list, it’s possible that nearly 70 mining companies will IPO in the first half of FY22.

On any measure, the turnaround in mining IPOs over the past few years is remarkable. Mining companies are an important part of the IPO ecosystem.

Although they tend to raise less capital on average than companies in other sectors, mining IPOs provide listings volume.

Several factors explain the boom in mining floats this year. The most obvious is the rally in global sharemarkets since the March 2020 lows when COVID-19 erupted. Historically, bull markets unleash a wave of new listings and that has been true this year with IPO strength across sectors.

Bull markets are particularly important for mining IPOs. As markets rally, more investors tend to buy shares in speculative exploration companies, hoping for quick gains. When bear markets return, mining IPOs are often among the first capital-raisings that are shelved.

Resource-sector strength is another driver of high mining IPO volumes. The Reserve Bank Index of Commodity Prices traded near record levels in November 2021. Elevated commodity prices improve the feasibility of mining projects and aid capital raisings and investor interest.

Solid expected global growth next year also bodes well for mining IPOs. The International Monetary Fund predicts the global economy will grow 5.9 per cent in 2021 and 4.9 per cent in 2022. Growth in emerging and developing markets will be 6.4 per cent, on IMF forecasts.

Buoyant global growth is good for minerals demand and commodity prices. As the world recovers from the pandemic, it’s possible that global growth could be stronger than expected. Much depends on China, which the IMF projects to grow 5.6 per cent next year.

Pent-up demand during COVID-19 for mining IPOs could be another factor. Many IPOs were postponed in the early part of the pandemic. Promoters were unable to meet investors face-to-face in many markets, due to social distancing. IPO pitches on Zoom were the norm.

As lockdowns end in Victoria and New South Wales, mining companies that delayed their floats during COVID are dusting off their prospectus and raising funds while they can. That suggests continued strength in mining IPOs over the next 12 months.

L A R G E S T C A P I TA L R A I S I N G S Minerals 260 leads the pack this financial year with its $30 million capital raising. The company (which has the James-Bond-like ASX Code of MI6), was incorporated as an Australian public company for the purpose of spinning out the Moora project and the Koojan joint venture project, as well as other minor projects including the Dingo Rocks Project and Yalwest tenement applications from Liontown Resources, an ASX-listed company.

Revolver Resources Holdings raised $12.7 million, the second-largest amount for a mining IPO so far this financial year. Revolver has copper projects in Mt Isa Minerals Province and the Hodgkinson Province in Northern Queensland.

Australian Rare Earths, the first mining IPO in FY22, raised $12 million. The company’s focus is on its

AUSTRALIAN RESOURCES & INVESTMENT

Selecting Mining IPOs on ASX so far in FY21

Selected ASX mining listings (1 July 2021 to end-October 2021)

ASX Code

Listed

KNI

24-Aug-21 Kuniko

Company

Offer Price ($) Recent price ($)** Change over issue price (%) Market value on listing Market value on listing ($m) Capital raised 0.20

1.72

Capital raised ($m)

760%

10,636,100

11

7,886,213

7.9

AR3

01-Jul-21

Australian Rare Earths

0.30

0.89

197%

33,204,000

33

12,000,000

12.0

BMM

14-Jul-21

Balkan Mining & Minerals

0.20

0.58

190%

8,500,000

9

6,500,000

6.5

CHR

09-Jul-21

Charger Metals NL

0.20

0.52

158%

10,080,000

10

6,000,000

6.0

CNR

12-Aug-21 Cannon Resources

0.20

0.51

155%

15,000,000

15

6,000,000

6.0

FRS

30-Sep-21 Forrestania Resources

0.20

0.45

125%

10,200,000

10

5,000,000

5.0

RRR

23-Sep-21 Revolver Resources Holdings

0.20

0.39

95%

46,199,996

46

12,724,527

12.7

LYK

21-Oct-21

Lykos Metals

0.20

0.38

88%

22,680,000

23

12,000,000

12.0

IND

13-Jul-21

Industrial Minerals

0.20

0.31

53%

12,610,000

13

5,000,000

5.0

PGO

08-Jul-21

Pacgold

0.25

0.36

44%

12,341,563

12

6,000,000

6.0

ALV

20-Oct-21

Alvo Minerals

0.25

0.33

32%

18,207,579

18

10,000,000

10.0

M3M

29-Jul-21

M3 Mining

0.20

0.26

30%

7,385,001

7

4,600,000

4.6

TMB

12-Aug-21 Tambourah Metals

0.20

0.26

28%

12,990,000

13

8,000,000

8.0

ITM

21-Oct-21

0.20

0.25

25%

19,216,667

19

7,000,000

7.0

MMG

06-Jul-21

iTech Minerals Monger Gold

0.20

0.25

25%

5,600,000

6

5,000,000

5.0

PFE

05-Aug-21 Pantera Minerals

0.20

0.25

23%

13,500,000

14

7,000,000

7.0

EMS

25-Oct-21

Eastern Metals

0.20

0.25

23%

10,908,533

11

6,000,000

6.0

E79

07-Oct-21

E79 Gold Mines

0.20

0.24

18%

13,014,965

13

7,000,000

7.0

EQN

13-Oct-21

Equinox Resources

0.20

0.23

15%

19,100,000

19

9,000,000

9.0

MMC

30-Sep-21 Mitre Mining Corporation

0.20

0.23

13%

6,840,020

7

5,000,000

5.0

BUR

07-Jul-21

Burley Minerals

0.20

0.22

10%

12,300,000

12

6,000,000

6.0

HVY

14-Sep-21 Heavy Minerals

0.20

0.22

10%

10,261,632

10

5,500,000

5.5

AQN

27-Jul-21

0.20

0.22

7%

16,000,000

16

8,000,000

8.0

CPO

10-Sep-21 Culpeo Minerals

0.20

0.22

7%

11,038,338

11

6,000,000

6.0

Aquirian

BMR

03-Sep-21 Ballymore Resources

0.20

0.21

5%

24,271,578

24

7,000,000

7.0

G50

06-Aug-21 Gold 50

0.25

0.26

4%

23,875,000

24

10,000,000

10.0

LKY

08-Jul-21

Locksley Resources

0.20

0.20

0%

9,200,000

9

5,000,000

5.0

1VG

22-Jul-21

Victory Goldfields

0.20

0.20

0%

9,406,886

9

5,000,000

5.0

C29

0%

12,858,333

13

MM1

07-Sep-21 Midas Minerals

0.20

0.20

-3%

12,795,427

13

6,000,000

6.0

WMG

20-Jul-21

26-Oct-21

Western Mines Group

C29 Metals

0.20

0.20

0.20

0.20

-3%

8,760,000

9

5,500,000

5.5

0.0

WC1

01-Oct-21

West Cobar Metals

0.20

0.20

-3%

8,300,000

8

5,500,000

5.5

CUS

15-Sep-21 Copper Search

0.35

0.34

-3%

28,842,780

29

12,000,000

12.0

MI6

12-Oct-21

Minerals 260

0.50

0.48

-4%

110,000,000

110

30,000,000

30.0

AS2

07-Jul-21

Askari Metals

0.20

0.19

-5%

8,504,200

9

5,729,200

5.7

RBX

12-Jul-21

Resource Base

0.20

0.19

-7%

8,718,230

9

5,500,000

5.5

WGR

23-Jul-21

Western Gold Resources

0.20

0.18

-10%

16,275,000

16

7,000,000

7.0

SMS

27-Oct-21

Star Minerals

0.20

0.18

-10%

10,600,000

11

5,000,000

5.0

NIS

18-Oct-21

Nickelsearch

0.20

0.18

-13%

20,812,804

21

10,000,000

10.0

LGM

13-Sep-21 Legacy Minerals Holdings

0.20

0.17

-15%

10,032,600

10

5,801,500

5.8

M2M

10-Sep-21 Mt Malcolm Mines NL

0.20

0.17

-18%

16,770,400

17

8,000,000

8.0

KNB

28-Sep-21 Koonenberry Gold

0.20

0.17

-18%

14,709,674

15

8,000,000

8.0

DAL

28-Sep-21 Dalaroo Metals

0.20

0.17

-18%

5,440,000

5

5,000,000

5.0

OZZ

05-Jul-21

OZZ Resources

0.20

0.16

-20%

9,027,375

9

5,000,000

5.0

MTM

15-Jul-21

Mt Monger Resources

0.20

0.16

-20%

8,590,000

9

5,000,000

5.0

GAL

08-Sep-21 Galileo Mining

0.26

0.20

-25%

55,473,398

55

6,500,000

6.5

DBO

12-Oct-21

Diablo Resources

0.20

0.15

-28%

14,900,000

15

6,500,000

6.5

REC

11-Oct-21

Recharge Metals

PLG

20-Sep-21 Pearl Gull Iron

0.20

0.15

-28%

9,112,500

9

5,000,000

5.0

0.20

0.12

-43%

20,005,572

20

4,000,000

4.0

835.10 351,241,440.00

351.24

Total raised

38,654,228,877.00

Average gain since listing

38%

Source: Dealogic for value raised, market value on listing. Morningstar for price information. At 10 November 2021. Ranked by change over issue price. Mining IPOs from 1 July 2021 to 29 October 2021. May not capture all mining IPOs in this period.

Source: ASX for listings. Morningstar for price data. Company prospectus for offer price, capital raising etc. * ranked by change over issue price ** Recent share price at 10 November 2021

fully owned Koppamurra project, a districtscale ionic clay rare-earth opportunity in South Australia and Victoria. Australian Rare Earths shares were up 197 per cent on their issue price.

Lykos Metals also raised $12 million and listed on ASX in late October. The company fully owns the Sockovac, Sinjakovo and Cajnice projects, all of which are in Republika Srpska, Bosnia and Herzegovina. Lykos is off to a strong start since its listing.

Copper Search was another of the larger mining IPOs in FY22 with a $12 million raising. Focussed on the Gawler Craton in South Australia, Copper Search has four main areas comprising the Peake and Denison, Mt Arthur, Ruby Hill and Billa Kalina projects. In its prospectus, Copper Search said it had identified more than 12 high-priority drilling targets.

BEST PRICE PERFORMERS Kuniko has been the standout mining IPO so far in FY22, its 20-cent issued shares rising to $1.72. The Perth-based company is

developing copper, nickel and cobalt projects in Scandinavia. Since listing in late August, Kuniko has announced promising exploration results.

Balkan Mining and Minerals has been another top performer. The company’s 20-cent issued shares have rallied to 58 cents since its July listing. Balkan was formed to acquire the Serbian assets of its parent company, Jadar Resources.

Balkan is currently focussed on the exploration of lithium and borates in the Balkans region of Serbia, in particular at its flagship Rekovac project.

Charger Metals has more than doubled its 20-cent issue price since listing on ASX in early July. Charger was formed late last year to acquire and explore interests in battery minerals and precious metals projects in Australia.

The company has an option agreement to acquire a 70 per cent interest in the Coates project and the Lake Johnston lithium and gold project in Western Australia; and the Bynoe lithium and gold project in the

Northern Territory.

After raising $6 million and listing on ASX in early July, Cannon Resources’ 20-cent issued shares rallied to 51 cents. Canaccord Genuity and Taylor Collison were lead managers on the float. Cannon was formed to implement the demerger being undertaken by Rox Resources to maximise the value of the Fisher East nickel project and the Collurabbie nickel project in WA. Among other floats, Forrestania Resources is off to a good start after raising $5 million and listing on ASX in late September. Forrestania’s 20-cent issued shares have rallied to 45 cents.

The IPO proceeds are being used to develop the company’s Forrestania gold, lithium and nickel project; Southern Cross gold project; and Leonora gold project in WA. Other mining companies off to a good start since listing include Industrial Minerals, Pacgold, Alvo Minerals, M3 Mining and Tambourah Metals. Share prices for junior explorers can be volatile, particularly in their first year after listing, so check the latest prices.

–7–

F E AT U R E D

— ANALYSIS — WITH REGINA MEANI Indigo blue – a rare find WHEN IT WAS first discovered in 1863, indium was called “indigo blue” because there was a blue line in its spectrum which drew attention to its existence in zinc ores.

The metal melts at 156 degrees Celsius (°C) and boils at 2000°C. It is a soft, malleable silvery white metal and when bent produces a “tin cry.”

A sound typically made when tin and some other metals are bent, it is a type of crackling sound.

Indium is usually recovered from sphalerite, which is also known as zinc blende or black-jack, and is a zinc sulphide mineral and is commercially produced in the zinc refining process.

It is one of the earth’s least abundant minerals and there are only two notable producers of the metal in Australia, Red River Resources and Sky Metals.

Most of the metal’s consumption is as indium tin oxide (ITO) and has several applications, including as a transparent

–8–

electrode in liquid crystal displays and computer and TV touch-screen (LCDs).

Windshields coated with ITO can be de-iced and de-misted, and in compounds such as indium arsenide, it is increasingly being used in semiconductors, which are mostly used in photovoltaic cells for solar energy.

Indium is also used as a low melting point alloy lead free solder and radioactive indium is used in small quantities in nuclear medical tests. Examples of this is as a radio-tracer, which highlights white blood cells and the movement of labelled proteins in the body.

During World War II, Indium was used to provide a thin film of lubrication to coat the bearings in high performance aircraft.

As the chart to the left highlights, the price for indium has more than doubled from its low point in January 2020.

The price has risen within a strongly rising trend channel, but when the price surged through $US230 ($313.65) spot price in August this year and broke through the $US250 barrier in September it pushed momentum into overbought.

The subsequent pause and pullback in price may continue as the metal tries to rebalance its position, but further out the indications suggest that the price has the potential to double again.

Red River Resources boasts one of the highest-grade known silver-indium deposits in Australia in the Herberton region of northern Queensland.

The company has been granted a

AUSTRALIAN RESOURCES & INVESTMENT

number of tenements in the region, including the polymetallic Isabel and Orient projects. At the Orient East project, an identified alteration zone is associated with a number of higher-grade silverindium-lead-zinc vein systems.

The share price for Red River has led a volatile path from the early 2000s, reaching a height of 67 cents in November 2007 to sink to a low point of 0.7 cents in mid-2014. From this low point the price spiralled up, pushing through resistance to halt a few months later just below 30 cents after gaining over 40 times its price.

The steepness and magnitude of the rise pushed momentum to a peak and the price entered a significant downturn which led to the price falling to support around 8 cents at the end of 2015.

From here, the price produced a triple turning point to trend higher to reach through the previous 30 cents barrier to 41 cents by February 2018.

Tumbling again, the price produced a spike reversal at 4.2 cents in March 2020

to then swiftly rise, only to be rebuffed in the 30 cents resistance zone.

The downward trend from this point was broken in mid-October 2021 and the price began consolidating its position.

The oscillations may develop in the 18 cents to 28 cents range ahead of the price retesting both the 30 cents and 40 cents area resistance areas with the potential to move towards the all-time high zone.

The risk going forward would be an extension of the consolidation phase on a drop below 15 cents.

Sky Metals’ Doradilla project, located south-east of Bourke in western New South Wales, is considered prospective for polymetallic tin, copper, silver, bismuth, indium and zinc mineralisation and is part of the “DMK lIne”, the Doradilla-Midway3KEL skarn.

Drilling by YTC Resources has confirmed the tin laterite mineralisation at the 3KEL deposit is also rich in copper, zinc, indium and bismuth.

In a similar fashion to Red River, the

share price for Sky Metals has led a volatile path, which saw it peak at $3.57 in 2006 and then rollercoaster down to a multiple turning point at 2 cents between late 2105 to early 2016.

The first stage in a basing process was completed in March/April 2017 with the initial rise to 17 cents where it encountered resistance drawn from 2009 and registered overbought momentum.

The price pulled back to locate support at 4 cents in 2018 with the action serving to extend the development of the base.

When the price rose through 13 cents in February 2020 it broke away from the 13year downward trend and completed the second stage in the base catapulting the price to 36.5 cents in the same month and then on to 43.5 cents in May of that year.

Again, the combination of resistance drawn from 2009 and this time divergent momentum saw the price halt and decline to support around 13 cents and then more recently in June this year breaking lower.

In falling to 7.7 cents in November, there are some preliminary signs that the price may have located support and a potential turning point or may indeed be close in the 7 cents area.

As we approach the end of 2021, a price move above 9 cents and followed by a confirmation move above 11 cents would indicate the potential for the stock to establish a new upward path.

Initially the price would need to overcome old resistance areas located at 13 cents and then 17 cents with higher levels at 25 cents, 35 cents and 43.5 cents.

These levels may be used for trading or reinvesting levels as the new path develops.

The risk to this scenario would be a failure to hold the 7-cent level with a drop towards 5 cents retuning the stock to the downward path. Such an action appears unlikely at the time of writing in November 2021.

–9–

australian owned

mackay PO Box 9094, Slade Point QLD 4740 370 Airstrip Road, Nebo QLD 4742 Ph: (07) 4951 4831

F E AT U R E D

Pilbara Minerals takes the plunge With the early success of its Battery Material Exchange platform, Pilbara Minerals is reaping the rewards of an alternative route to market. So, what’s next for the company and lithium sector?

A

ustralian lithium miner Pilbara Minerals has been a success story of the global mining industry in 2021.

The Western Australian company has seen its share price balloon over the past 18 months, rising from as low as 13 cents in March 2020, to above $2 in August – a value it maintained until the time of writing.

Lithium has experienced a spike in demand as a result of the evolving renewable energy transition, with the motorised world embracing electrification, and big electric vehicle (EV) players such as Tesla and Renault continuing to expand their capabilities.

But Pilbara Minerals hasn’t just attracted the shareholder euphoria because of its offtake capability, the company has also instituted another means for which to market its spodumene concentrate.

In March, 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/dmt and $US2350/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.

The results verified a niggling curiosity for Pilbara Minerals, one which has been steadily cultivated across the past half decade or so.

“I’ve been in the industry coming up to six years, which is not very long in the lithium industry, but there have already been big changes in that period of time,” Pilbara Minerals chief executive officer Ken Brinsden tells Australian Resources & Investment.

“One of the more significant changes

– 12 –

that has emerged is the number of buyers that can now take spodumene from Western Australia.”

Brinsden says spodumene has established a broader appeal, with more buyers building the infrastructure to support its commercialisation.

“I was going up to China from early 2016 and you would only have to stop at three or four places and you probably covered where your sales were going to go,” he says.

“A big contrast now is that there’s 25 genuine buyers. So, with that as a backdrop, we started to think about the distinction between selling in longer-dated offtake arrangements versus the potential in a spot market.

“The spot market didn’t really exist, even up until arguably a year ago, but we saw its potential because of the number of buyers that were coming to market – some of them were new players to the industry; they hadn’t already secured offtake, but they’d built chemical capacity.”

So, Pilbara Minerals took a punt,

understanding that with more buyers comes more competition to access the spodumene, especially if it can’t be accessed in offtake.

And the prices speak for themselves; Pilbara Minerals sold the most expensive cargo of lithium ever when its third BMX auction took place in late October.

While the overarching appeal of the spot market is understood, Brinsden believes there’s a few specific reasons why the BMX could be drawing viral interest.

“If I was to guess what’s going on … firstly, it’s just a genuine shortage – I think we can take that as a given and it’s reflected in the price,” Brinsden says.

“Secondly, it’s also possible that the buyers are taking a view about future price, i.e. the price is still getting higher in which case we should get in now.

“And thirdly, it’s possible that the same buyer is contractually bound on the other side – having to deliver a chemical they don’t have raw material for.”

Pilbara Minerals will continue scaling up its BMX platform in 2022, something which its Pilbara Minerals’ lithium is attracting big money at the spot market.

AUSTRALIAN RESOURCES & INVESTMENT

Ngungaju processing plant will play a major part in.

Located at the Pilgangoora lithiumtantalum operation in Western Australia, Ngungaju achieved first spodumene production in October after Pilbara Minerals secured the plant via its acquisition of Altura Mining in January 2021.

Once Pilbara Minerals has ramped up Ngungaju’s coarse circuit and fines concentrate circuit, the plant will produce 180,000 to 200,000 dry metric tonnes per annum (dmtpa) by mid-2022.

Brinsden says Ngungaju will not only increase Pilbara Minerals’ total production base to above 500,000dmtpa, but because it’s not already an offtake, the company has the flexibility to sell Ngungaju’s spodumene through the spot market if it wishes.

As the BMX continues to evolve, more volume and more buyers will lead to a more multi-faceted market.

Greater volume calls for greater sophistication, and Brinsden sees the lithium spot market expanding to accommodate increased interest. Just not quite yet.

“To the broader question, does the market get more sophisticated over time in the same way that most natural resource markets do, the answer is yes,” Brinsden says.

“There will be more over the counter trades, over time there will be indices that emerge. That will facilitate financial trade which will build out hedge positions. There will be derivatives.

“All of that will come – our first step into the BMX platform I guess is demonstrative of that, but it takes more volume, and it takes more trades for the industry to build out that level of sophistication like I just described.

Lithium is an important resource in electrification.

It’s coming, it’s just going to take a bit more time.”

With Pilgangoora’s significant potential, Pilbara Minerals is content with maximising its immediate capabilities before it starts contemplating its next expansion through mergers and acquisitions (M&As).

“There’s nothing burning a hole in our pocket. We have so much organic growth ahead of us at Pilgangoora – such a massive resource, massive reserve – there’s so much that can be done there,” Brinsden says.

This doesn’t mean Pilbara Minerals isn’t keeping a close eye on global developments, however.

“So, all we do, is we watch with interest – what’s happening around the world. A couple of key themes are well worth paying attention to,” Brinsden continues.

“One of which is that the localisation of

some supply chains is going to become very important, so I can see logic and merit in a North American or even an American supply chain spanning South America as well, supporting the growth of battery-making capacity there.

“Similarly in Europe, albeit Europe’s a little bit more challenged because they don’t have quite as much raw material, but anyway, the idea that the raw material is closer to the battery, I think is an important theme.”

As Pilbara Minerals continues to evolve its BMX platform and the appetite for battery metals continues to grow, there’s enough to suggest the company’s stock will continue to increase into 2022 and beyond.

Needless to say, every Pilbara Minerals development will be observed with vested interest in Australia and beyond going forward.

Pilgangoora is made up of the Pilgan and Ngungaju processing plants.

– 13 –

F E AT U R E D

The Havieron gold project site in Western Australia.

AN OPPORTUNE TIME FOR HAVIERON

The Havieron joint venture project in Western Australia between Newcrest Mining and Greatland Gold is shaping up to be a frontrunner in Australia’s gold industry.

G

old and copper mining in Australia is showing no signs of slowing down with demand for both metals strong and exploration activity around the country peaking.

The Havieron gold-copper project in the highly prospective Paterson Province of Western Australia, adjacent to Newcrest Mining’s Telfer mine, is shaping up as one of the standout future operations that will start production in Australia this decade.

London-based explorer Greatland Gold discovered Havieron in 2018, setting the scene for a $US65 million ($86.8 million) farm-in agreement with Newcrest in 2019, followed by a joint venture (JV) being formed in November 2020.

The partnership has delivered an initial inferred resource of 3.4 million ounces of gold and 160,000 tonnes of copper from the site’s South East Crescent zone.

In October, Newcrest delivered the stage one pre-feasibility study (PFS), which focusses on the South East Crescent zone, adding

– 14 –

more promise that Havieron will enter first production in the 2024 financial year.

By completing the stage one PFS, Newcrest is entitled to 70 per cent of the JV, which is up from its initial 60 per cent interest.

With Newcrest and Greatland now entering the stage two PFS, there is already strong potential for Havieron to be developed into an operation that delivers a mining and milling rate of more than three million tonnes per annum.

“The stage one PFS is based on the currently defined indicated mineral resource located in the upper sections of the South East Crescent, which is a small portion of the existing resource inventory and excludes inferred mineral resources,” A Newcrest spokesperson tells Australian Resources & Investment.

“The feasibility study scope is expected to include the completion of a further infill drilling program by the end of calendar year 2021 to increase the indicated mineral resource base for potential ore reserve expansion,

and completion of the growth drill program immediately below the Crescent Zone for potential mineral resource expansion.

“Further opportunities include an enhanced development option which will consider increasing mining and milling rates to three million tonnes per annum or higher compared to the two million tonnes per annum assumption upon which the PFS has been based.”

Newcrest flagged in August it is aiming to find more high-grade gold deposits around the Havieron area, including the Northern and Eastern Breccia targets, which contain open high-grade mineralisation.

Both Newcrest and Greatland’s exploration foothold in the Paterson is shown through the Juri JV, an agreement which entered stage two in October.

Newcrest’s total investment at Juri could grow from $3 million to $20 million, which would see the project become the next Havieron as exploration advances next year.

According to Greatland chief executive

AUSTRALIAN RESOURCES & INVESTMENT

Aerial view of Havieron’s boxcut.

officer Shaun Day, Havieron will be leveraged by existing infrastructure at Newcrest’s Telfer gold mine, which is driven by low capital expenditure with a 27 per cent rate of return under the spot gold price.

“What’s driving that is this combination of low capex expenditure, which is provided by leveraging existing infrastructure of the Telfer mine combined with an extraordinarily low cost per ounce, where Greatland Gold would actually emerge as the second lowest cost gold producer on the planet at about $US643 an ounce, which would deliver a margin comfortably in excess of $US1000,” Day says.

The PFS also uncovered that Havieron will have 17 per cent of its revenues generated from copper production.

Copper supply is crucial to the world’s clean energy revolution with the commodity climbing to record high prices in 2021.

Newcrest managing director and chief

executive officer Sandeep Biswas noted in September the company’s copper output is increasing in importance ahead of a spike in demand this decade.

The company hopes to deliver a higher copper output after producing a record 143,000 tonnes of the red metal in the 2020-21 financial year, delivering $US4.5 billion in revenue.

“I think the best gold mines or the best gold mining companies are those that contain copper as well,” Day says.

“With Havieron sitting at around 20 per cent copper, it’s an extraordinary opportunity for shareholders.

“I don’t think there’s a better way to play the EV (electric vehicle) and battery electrification thematic than with copper, so we’re really blessed of having the benefit of gold coupled with copper as well, so I think that’s one of the great strengths of Greatland.

“Particularly in the Australian context,

it’s probably what differentiates us from a lot of our peers as very few have copper in their portfolio, so it does gives us a competitive advantage.”

Greatland has enjoyed its fair share of success on the London Stock Exchange (LSE) with its market capitalisation sitting at £693 million ($1.25 billion) in October.

The company has not ruled out a listing on the ASX in the future, but Day says it currently remains comfortable trading solely on the LSE. The ‘elephant country’ of the Paterson Province puts Havieron not only in the company of Telfer, but also Rio Tinto’s Winu project in the north, which provides promising signs for how far the JV resource can grow.

“We have 50,000 metres of drilling that hasn’t been captured in the PFS and another 90,000 metres of drilling to June 2022,” Day continues.

“It’s a a huge volume of information that will come to the market in the next coming months and gives us an opportunity to build the resource.

“We have a huge amount of growth as we unlock the value of the bulk mine sitting, not just in that South East Crescent, which is a fraction of the orebody, but rather the broader zonation of Havieron.

“Looking at larger bulk mining methodology that not only takes advantage of the size of the Havieron orebody, but also takes of the availability of processing space at Telfer.”

With a feasibility study for Havieron on the horizon next year, Greatland and Newcrest will be gearing up to sustain Australia’s gold and copper output with a resource that holds eye-catching promise.

Through efficient collaboration in a prospective region, Havieron is on its way to becoming a monolith in Australian mining.

Havieron’s decline entrance.

– 15 –

F E AT U R E D

Will Australia’s ‘technology, not taxes’ approach to lowemissions energy deliver net-zero target by 2050?

A

ustralia’s new Long Term Emissions Reduction Plan to deliver net-zero emissions by 2050 will rely on two trends: economies of scale to facilitate cheaper low-emissions energy production; and industry and consumers making the switch to an energy mix dominated by low-carbon sources.

A $20 billion investment in new technology by the Australian Government over the next decade may not be enough to precipitate at least $80 billion of total private and public investment in clean hydrogen, carbon capture and storage.

This plan, presented at the Conference of the Parties (COP26), is underpinned by the following principles: ‘technology, not taxes; expanded choices, not mandates; driving down the cost of new technologies; keeping energy prices down with affordable and reliable power; and being accountable for progress’.

These principles sound fair, but will this plan be fit for purpose to establish our nation as a leader in low emissions technologies, while simultaneously preserving existing industries, regions and jobs at risk?

There are three fundamental concerns: (a) the plan rules out taxes or a legislated mechanism to avoid costs on households, businesses and regions.

However, alternate plans to raise revenue in an effort to service new technology investment isn’t comprehensive; (b) while Australia intends to reduce emissions, it will continue to serve traditional markets that will ultimately dampen our ability to reach a netzero target, such as coal; and (c) the strategy behind protecting Australian jobs is granted through continuing to operate mines in these traditional markets with little consideration to ensure current skill sets are transferable to serve the energy transition of the future.

Australian Prime Minister Scott Morrison

– 16 –

BY ALEXANDR A COLALILLO stated: “The plan will deliver results through technology, not taxes … it guarantees that we keep downward pressure on energy prices and secures reliable power. It will ensure Australia continues to serve traditional markets, while taking advantage of new economic opportunities.”

This objective seems challenging amid concerns that Australia’s energy policies are not integrated, nor coherent.

There is uncertainty that Australia’s electricity networks are not designed, governed and operated to tackle increases in electricity demand as we undergo a significant energy transformation in Australia.

Australia’s emissions reduction plan was presented to the world at COP26.

Key elements absent from the plan are: specific measures to reduce emissions; estimates of their effectiveness and their impact on existing industry and employment; and measures to reduce such impacts. This leaves Australia’s plan open to criticism.

( A ) T E C H N O L O GY, N O T TA X E S Minister for Industry, Energy and Emissions Reduction, Angus Taylor, noted: “Our plan is built on a set of key principles; the most important being technology, not taxes ... we won’t introduce a carbon tax that drives Australian jobs overseas and punishes the most vulnerable in our community through higher prices for electricity and other essentials.”

How realistic is the net-zero emissions target if we continue to serve traditional markets that ultimately produce emissions?

The idea of an Australian green revolution depends on creating demand for a concept and a product in its infancy, while simultaneously soliciting support from the government.

The US Special Presidential Envoy for Climate, John Kerry, acknowledged that approximately 50 per cent of the “technology” required for net-zero doesn’t yet exist.

Therefore, $20 billion isn’t likely to fund critical technologies domestically, many of which require 15-20 years to come to fruition.

While the Australian Government has a plan to invest $20 billion into new technologies, such as carbon capture and storage and hydrogen production, where is future revenue coming from in the absence of a carbon tax? We are instead placing our reliance on future taxpayers and investors for support.

Andrew Forrest recently pledged to produce 15 million tonnes a year of green hydrogen by 2030 and announced that Fortescue Metals Group would no longer just extract and ship 180 million tonnes of iron ore. Instead, it would zero out its own carbon emissions and become a renewable energy powerhouse.

However, are Australian billionaires the solution to this environmental problem?

Australia’s reliance on investors is a cause of concern if lower-profile investor confidence in

AUSTRALIAN RESOURCES & INVESTMENT

Image: Fortescue Metals Group.

Fortescue is leading mining’s charge to cut emissions.

new technology dissipates.

Ultimately, if investors pull out and alternate government revenue streams dry up, there is a risk that Australia will be left with a large debt and a heavy burden on future taxpayers.

This is very possible given Australia’s incoherent energy strategy to achieve the 2050 goal. Instead, investors may turn to other countries whom they deem to have a clear plan to drive down emissions.

(B) W E ’ R E S T I L L S E R V I N G TRADITIONAL MARKETS Minister for Industry, Energy and Emissions Reduction, Angus Taylor, noted: Our plan “will not shut down coal or gas production, or require displacement of productive agricultural land.”

Australia is the world’s biggest exporter of coal and the resource is often cited as a cheap form of energy.

However, the environmental impacts are considerable on air quality and the climate. In 2020-21, export revenue for thermal coal equated to $16 billion and $23 billion for metallurgical coal alone.

Given we rely on a large proportion of coal export revenue to serve the productive capacity of the Australian economy, a global decrease in coal demand will hit hard.

Countries globally drive their own agenda to reduce emissions and we can therefore speculate that future tariffs may be imposed on Australian exports of coal in an effort to support global environmental agendas.

For example, America is aiming to switch off its coal-fired power stations in 14 years which will contribute to a deteriorating coal market, driving down coal prices and ultimately placing pressure on coal producers.

Will the demand reduction stemming from the lack of popularity in coal be the catalyst to drive away

production of unclean energy sources? This is a future consideration and if we are serious about net zero emissions, the federal government needs to determine how best to transition communities in coal regions towards other forms of energy export.

(C) P R E S E R V I N G E X I S T I N G J O B S Minister for Industry, Energy and Emissions Reduction, Angus Taylor, also noted: “Our plan continues the policies and initiatives that we have already put in place and that have proven to be successful, while preserving existing industries and jobs, and supporting regional Australia.”

The question is, how do we deliver on net zero emissions while preserving Australian jobs?

Preserving existing industries and jobs may be perceived as a short-term solution to a long-term problem. If industries and consumers globally intend to switch to low emissions technology, the forces of supply and demand will inevitably drive out traditional markets, such as coal. Given Australia is heavily reliant on our resources export revenue, this shift could be damaging.

Therefore, those employed within those markets will be unemployed unless there are strategies in place to train and retain our pool of skilled labour.

Around 1.2 million people are already on JobSeeker and Youth Allowance benefits payments, yet businesses and the NSW Premier are calling for more immigration due to skills shortages.

It is the responsibility of governments, businesses and the education sector to develop strategic and operational plans in an effort to preserve Australian jobs amid the new energy transition.

However, if we call upon our leaders to make Australia the world’s leading exporter of renewable energy by 2030, this could be one step in the right direction.

Alexandra Colalillo Alexandra 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.

– 17 –

PROFILE

Dart on target in Victorian mineral hunt Advancing its Granite Flat, Buckland and Dorchap exploration projects, Dart Mining’s pursuit of production is well positioned heading into 2022.

D

art Mining has one of the largest tenement footprints in Victoria, with a diverse exploration portfolio spanning orogenic gold, strategic and technology metals such as lithium and tantalum, and porphyry base metals such as copper and zinc.

Across 6000 square kilometres, Dart has several projects at different stages of development, including its Granite Flat copper-gold project near the town of Mitta Mitta, its Buckland gold project in the Buckland Valley and its Dorchap lithium project in the Dorchap Range.

Dart general manager and chairman James Chirnside has high hopes for the Granite Flat project, which continues to undergo exploration.

“The Granite Flat copper-gold porphyry project is the focus of our efforts. We did some RAB (rotary air blast) drilling there towards the end of last year, we’ve done some more RC (reverse circulation) drilling and we’re using our own in-house diamond drill rig as we speak,” Chirnside explains during the 2021 NWR Resources Series.

“We are convinced that we are dealing with a porphyry-style deposit. There’s lot of hard evidence of that. The only thing that will prove it ultimately is some deep drilling – the deepest we’ve been to on Granite Flat to date was an RC hole recently completed to 184-odd metres.”

Completed in November 2020, Dart’s RAB drilling at Granite Flat saw 33 of the 42 holes record intersections of significant mineralisation, with seven of them mineralised throughout.

A 19-metre intercept attracted 9.39 grams per tonne (g/t) of gold, including three metres at 41.1g/t. This was taken from a 28metre drill hole (EMPRAB28).

EMPRAB28 also drew encouraging copper results, led by a nine-metre intercept of 0.61 per cent copper, including three metres at 1.52 per cent copper.

– 18 –

Gold-copper mineralisation has been identified at Granite Flat.

“Albeit fairly low-grade copper and in some parts fairly low-grade gold too, but we’re seeing very big metres (from Granite Flat). So that’s all pointing from our perspective to a bulk-tonnage type discovery, and we’ve got a lot more work to do on it,” Chirnside says.

Dart is working through a 3500-metre RC drilling program at Granite Flat. Chirnside says Dart is making good progress on this program, with 400 metres of an initial 1000metre diamond drilling program having been completed using its in-house drill rig.

The company has completed approximately 7500 soil samples at its Buckland gold project, identifying disseminated gold along a 17.5-kilometre strike.

There are instances of thick mineralisation up to 180 metres below the surface, with the shearhosted, orogenic gold system bearing similarities with Bendigo and Fosterville

gold mineralisation.

“The scale of Buckland, again low grade, but the potential tonnage there is fantastic.

Our model has worked for us very well and we’ll be getting back to Buckland in early 2022 after we’ve done a bit more work at Granite Flat.”

Dart is taking the plunge into lithium at its Dorchap project, also boasting the potential for other technology metals such as tantalum, tin, tungsten and caesium.

Initially emerging with pegmatite hits in 2016, Dart put the project on pause due to the lithium price crunch, a contrast to today’s strengthening market environment.

Dart believes there are about 3000 pegmatites at Dorchap.

“Dart was the first company to discover lithium pegmatites in any quantity on the east coast of Australia in 2016. We did quite a lot of work on it in 2017 and 2018. We completed various aerial surveys, rock chip

AUSTRALIAN RESOURCES & INVESTMENT

sampling etc,” Chirnside says.

“We parked the lithium prospects for a time when the lithium carbonate price collapsed. About six months ago, we resumed work on our lithium prospects.

“We have had some very good hits particularly in tantalum (at Dorchap); we’ve had some great hits up to about 1.62 per cent lithium oxide on a couple of these dykes.

“This year, we completed a LiDAR survey of the area which has uncovered a lot more lithium pegmatites, as well as tracks, unused drill pads and more.”

Chirnside says LiDAR surveying at the Eagle spodumene dyke extended its potential by approximately 300 metres, culminating in up to 500-600 metres at this deposit.

Looking to 2022, Dart will return to Buckland to complete further RC drilling and geophysical surveying, buoyed by the results from its Granite Flat geophysical surveying from early 2021.

Continued work will take place at the Dorchap lithium project, with further RC drilling, mapping and sampling take place.

To accommodate its continued exploration, Dart recognises the need for

Dart has a diverse exploration portfolio spread across north and north-east Victoria.

additional capital with further raising forecast at some point in the future.

Notwithstanding, Chirnside says Dart has never been busier on the ground than in the past 12 months.

With a valuable board addition in Carl

GOLD AND TECH METALS IN NORTH EAST VICTORIA • Extensive polymetallic tenement package, over 6000km2 • Substantial Li prospectivity in North East Victoria

Swensson, who was chief of exploration at Normandy Mining for over a decade, and with the prospects of its Granite Flat, Buckland and Dorchap projects, among others, the company is well placed to attract further investor interest in 2022.

Renewable energy transition is underpinning demand for the entire metals complex and many of these are represented within Dart’s tenement package Dart has accumulated an exceptional and commanding position in a highly prospective under-explored region FLAGSHIP PROJECTS INCLUDE: Granite Flat Cu-Au Porphyry Project Dorchap Lithium Project Buckland Orogenic Gold Project

• Copper-Gold porphyry drilling underway

Find out more: dartmining.com.au

+61 2 9597 1198 info@dartmining.com.au dartmining.com.au

– 19 –

P O TA S H

AUSTRALIA SEEDS FIRST POTASH PRODUCTION D

The Australian potash industry is on the verge of entering its maiden years of production across multiple sites thanks to a wave of rapidly developing projects in Western Australia.

emand from the agricultural industry for an effective plant fertiliser boils down to one mineral:

potash.

Potash is crucial for ensuring the pH level of soil is stable, which allows for more crops to grow – and with world populations increasing, more crops must be harvested for consumption.

In addition, mining companies must find more sustainable methods to extract a critical mineral such as potash.

The resource is currently mined and processed predominantly in countries like Canada and Russia using the Mannheim process. This is regarded by some as an inefficient way to produce potash as it converts muriate of potash (MOP) into

Kalium Lakes celebrating its milestone of reaching production.

– 20 –

sulphate of potash (SOP) by mixing it with sulphuric acid and heating it to 600 degrees.

However, in salt lakes such as what exist in Western Australia, SOP occurs naturally.

There has been a push for domestic potash projects to come online over the past decade, with companies like Australian Potash, Kalium Lakes and Agrimin ramping up developments.

The flagship projects from all three companies are aiming to produce – or have already produced – SOP. Australia’s first wave of potash developments can be traced back to 2013 when Geoscience Australia’s identified a series of potential potash deposits from salt lakes across the country as part of its

Mineral Systems of Australia project.

The aspiring Australian developers are aiming to extract potash from brine in salt lakes rather than using the Mannheim process to enable a lower carbon footprint.

By introducing a domestic supply of potash, Australia will be self-sufficient in providing locally extracted potash for its agricultural industry.

Kalium Lakes took the baton as the first-ever mining company in Australia to produce SOP in October.

The SOP product was produced at the Beyondie project in Western Australia.

Despite the recency of the milestone, the company is already looking at expansion, raising $50 million in October to boost its annual production from 90,000 tonnes per annum (tpa) to 120,000tpa.

“It sets us up now from being a project developer to producer,” Kalium Lakes chief executive officer Rudolph van Niekerk tells Australian Resources & Investment.

“It’s been seven hard years of working towards something new that’s never been done in Australia.”

Kalium Lakes was founded in September 2014 after the company formulated plans following the release of Geoscience Australia’s report.

Within years, the company had taken its first steps in moving Beyondie towards production, establishing a 50-year mine life at the project site.

The project comprises 16 exploration licences and two mining leases across 1800 square kilometres, and unlike the Mannheim method, Kalium produces SOP using an evaporation and processing method after sub-surface brine is extracted through trenching and bores.

According to van Niekerk, this puts Kalium Lakes ahead of overseas producers in terms of cost benefits and quality.

“I think primary producers of potash have a major advantage over the Mannheim

AUSTRALIAN RESOURCES & INVESTMENT

Kalium Lakes achieved first production in October this year.

producers,” van Niekerk says. “The cost of Mannheim SOP production is significantly more expensive.

“Many of the Mannehim facilities that operate globally operate at zero to 50 per cent capacity because they cannot compete with primary SOP producers.

“It does become a question of supply and demand, but it really comes down to the cost of producing SOP – and we are producing at a substantial cost benefit compared to Mannheim producers.”

Australian potash producers are also in a strong position given the forecast 2022 average standard grade SOP price is $US617 ($846.47) per tonne.

The European Union, United States and Canada have enforced potash sanctions on Belarus, which is one of the world’s major producers of MOP. These sanctions are impacting about 15 per cent of Belarus’ exports.

Van Niekerk says this puts Kalium Lakes in a position to help meet the shortage of supply overseas.

“Very healthy crops in Australia are resulting in a large demand from Australian

farmers and also farmers in other regions,” van Niekerk says.

“They have to replace those nutrients taken out of the soil, which is putting huge demands on fertiliser.”

The capital raising to increase Beyondie’s output also falls in line with a potash deficit that van Niekerk is anticipating from 2025 and beyond.

“From 2025 onwards, global demand in growth in SOP exceeds your supply capacity and you see that continuous upward trend in pricing,” van Niekerk says.

“What that means for us and other players is between now and 2025 we can not only expand production to 120,000tpa, but we can also look at expansion in excess of this and it could potentially offer opportunity for other producers to enter the market.”

In 2018, Kalium Lakes secured a 10-year offtake agreement with German potash company K+S, which supplies more than 50 per cent of Australia’s market.

This agreement will allow Kalium Lakes to also tap into a steady stream of local potash demand.

“From a Kalium Lakes point of view, it is a great time for us to achieve first production and the right timing to be there for the Australian market in particular,” van Niekerk says.

Australian Potash is another local potash project developer that is rapidly moving towards joining Kalium Lakes as an Australian producer.

The company is set to include a 35-megawatt renewable microgrid for its Lake Wells SOP project in Western Australia, which further adds to the greener approach of Australian produced SOP. “We see the wave of investment into environmental, social and governance (ESG) aligned companies and ESG aligned investment opportunities as being like a tsunami,” Australian Potash managing director and chief executive officer Matt Shackleton says.

“We don’t think it’s a little thing, we think we’re going to be swamped with it (ESG) and we’re preparing for that outcome – it’s a short-term outcome.”

Lake Wells is 100 per cent developed and the site contains the largest measured

– 21 –

P O TA S H

Agrimin is developing the Mackay potash project in WA.

resource of potash in Australia.

Rather than relying on trenching, Australian Potash uses a bore-field drilling technique to extract potash, further driving the company’s ESG strategy.

This method allows potash to be transported to evaporation ponds that use the sun to produce potash.

Australian Potash is on the verge of receiving organic certification for its product in Australia (at the time of writing) after already receiving the certification in the United States and Europe.

“The reason we’re focussing on our environmental, social and governance strategy so intently is our customers are telling us that the jurisdictions they work in are already mandating they have to report the carbon chain through the supply chain,” Shackleton says.

“If you were to supply a tonne of SOP fertiliser into Europe, the day is imminent where the regulatory authorities are going to request that you are able if asked to

– 22 –

provide a thorough supply chain carbon footprint starting January 2022.”

Lake Wells is located 500 kilometres northeast of Kalgoorlie in the Goldfields region of Western Australia.

The project has established a 30-year mine life and is targeting 170,000tpa from its resource, which comprises 18.1 million tonnes of SOP. Australian Potash aims to deliver a final investment decision by December or potentially early next year, with the project expected to cost around $300 million to be constructed.

Shackleton says the aftershocks of COVID-19’s first wave has shown the importance of self-sufficiency and agrees the local agricultural market needs a local supply source.

“If COVID has done one thing, you do need to be able to be prepared to be self-sufficient of your domestic food production,” Shackleton says.

“You can only do that if you have

domestic fertiliser supply or secure fertiliser supply. A lot of us read the Geoscience Australia (report) and went looking for potash – some of us found it.”

Potash is also proving to be an important future commodity for the blue-chip mining companies.

BHP approved a $US5.7 billion ($7.8 billion) investment to fund development of the Jansen stage one potash project in Canada this year.

The company also expects potash to increase in demand in the late 2020s, a promising forecast for BHP with Jansen designed to operate for up to 100 years.

“Potash provides BHP with increased leverage to key global mega-trends, including rising population, changing diets, decarbonisation and improving environmental stewardship,” BHP chief executive officer Mike Henry explains.

In its latest commodity outlook released in the September quarter, BHP noted that a recovery in potash prices in the second half of

AUSTRALIAN RESOURCES & INVESTMENT

Lake Mackay’s shallow water table allows for simple extraction of potash.

Agrimin aims to become the world’s lowest cost SOP producer.

2020 had gathered pace in calendar 2021, with a dramatic acceleration emerging in June.

BHP attributes the rise in prices to a combination of tight product availability and buoyant farm economics on the back of booming crop prices.

“With robust demand again in calendar 2021, inventories being lean and little succour as yet from expected greenfield start-ups in Belarus and Russia, the industry has been struggling to meet demand from their active capacity,” the outlook states.

Longer–term, BHP views potash as a future-facing commodity with attractive fundamentals.

“Demand for potash stands to benefit from the intersection of a number of global megatrends: rising population, changing diets and the need for the sustainable intensification of agriculture,” the company adds in the commodity outlook.

BHP is developing Jansen to produce 4.35 million tonnes of potash per year.

The company plans to produce MOP from Jansen, which is less organic than the SOP products being developed in Western Australia.

This adds another benefit for local SOP production for the ‘green’ attributes if offers throughout the supply chain.

Agrimin, which is developing the Mackay potash project in Western Australia, has noted that the global agricultural industry is looking for alternative sources of SOP. “The majority of SOP produced through the Mannheim process has environmental issues that are becoming more recognised by small farmers and customers that buy SOP,” Agrimin chief executive officer Mark Savich says.

Agrimin will target a global base of customers with one third of Mackay’s potash production going to China and the remaining two thirds spread across the Americas and Europe.

The company aims to become the world’s lowest cost SOP producer with the project

based on Lake Mackay, the world’s largest undeveloped SOP brine deposit, containing 123 million tonnes of SOP. Mackay’s net present value using an eight per cent discount rate is $US655 million and has an initial rate of return of 21 per cent.

After securing an offtake agreement with major Chinese importer Sinochem Fertilizer Macao (Sino), Savich says overseas customers are looking at Australia’s upcoming SOP industry with a keen eye.

“When we were talking to Sino, we were trying to understand why they were interested in importing SOP from Australia,” he says.

“It was very clear that they were looking to source organic environmentally friendly SOP for use in China to customers who value those ESG credentials, and they were happy to export their poorer quality SOP to a variety of countries.

“It just shows a market such as China is still placing huge importance on the organic credentials of fertiliser and they understand how important it is to maintain good soil balance to farm for generations to come, so I think that awareness is going to grow throughout more developing countries as food security issues emerge.”

Lake Mackay’s shallow water table allows for simple extraction through a trenching process before being transferred to evaporation ponds.

From Agrimin’s point of view, this is a low-risk approach combined with the company’s integrated logistics solution across a 940-kilometre stretch between Lake Mackay and the Port of Wyndham.

Agrimin plans to begin developing Mackay next year after receiving lead agency status from the Western Australian Government’s Department of Jobs, Tourism, Science and Innovation.

“The critical path item for us is the environmental approvals and we’re hoping to have those full approvals in place by the middle of next year and that would then allow us to move forward in the development of the project,” Savich says.

The economic benefits of Australian SOP production may be yet to materialise, but the supply chain advantages presented in the full gamut of Western Australian potash projects is set to give a positive shake-up to global supply.

And thanks to the low-emission methods of extraction, Australia is well-positioned to serve the domestic and international agricultural potash industries for decades to come.

– 23 –

GOLD

THE GREAT GOLD VS CRYPTO DEBATE

ich is the

used in

BY ANDR EW NAYLOR, WOR LD GOLD COUNCIL R EGIONAL CHIEF EXECUTIVE OFFICER, APAC AND PUBLIC POLICY

The recent performance of cryptocurrencies coupled with year-to-date outflows from gold ETFs has led to questions about whether cryptocurrencies are displacing interest in gold. Andrew Naylor, regional CEO APAC (ex China) of the World Gold Council, explains why this is not the case.

G

OLD AND CRYPTO CURRENCIES ARE FUNDAMENTALLY DIFFERENT ASSETS A question often asked is the impact of cryptocurrencies on gold as an asset class, and whether interest in crypto will displace interest in gold.

The short answer is no – they are fundamentally different asset classes. Gold is also a physical asset and by definition crypto-currencies are not. But arguably one of the most significant differences is the very different nature of demand for both assets.

Unlike crypto, gold has a very diverse demand profile and use-case(s). It also has intrinsic value. If you look at the sources of demand for gold over the period 2010-2020, investment demand accounts for approximately 42 per cent of annual demand, jewellery 34 per cent, central banks 17 per cent, and technology about 7 per cent.

Each of these sectors of demand has

– 24 –

different drivers – jewellery and tech demand often increase in times of economic expansion.

Investment demand is driven by uncertainty, and central bank demand by a combination of both. The unique and diverse nature of demand for gold, underpinned by different drivers, means gold performs differently from other asset classes, including crypto.

The result is that gold is often not significantly correlated to most other assets, particularly in downturns, making gold a potential diversifier.

There are other factors that distinguish gold from crypto – its liquidity, volatility profile and its role in a portfolio.

Crypto assets can be volatile and are not without risk so an argument can be made that the higher the exposure to crypto, the greater the need for an asset that can mitigate risk such as gold. It is therefore important to consider the different roles

that cryptocurrencies and gold play.

Earlier this month bitcoin futures were launched. Whilst an interesting development, they are structurally different to physically-backed gold ETFs. The bitcoin ETF does not hold the underlying asset – it is based on cashsettled bitcoin futures. Physical gold ETFs hold the underlying asset – physical gold.

The final point to consider on cryptocurrencies is the regulatory framework. This is constantly evolving and is not yet settled, adding another element of risk to the cryptocurrency market.

SO IF CRYPTOCURRENCIES A R E N O T D I S P L AC I N G G O L D, W H AT A R E T H E R E A S O N S F O R GOLD’S MIXED PERFORMANCE S O FA R T H I S Y E A R ?

It has been an interesting year for gold.

From last year’s record high gold price and inflows into ETFs, gold has so far had

TR AP A U S T R A L I A N R E S O U R C E S & I N V E S TSM EN T

a more mixed year. The World Gold Council’s latest Gold Demand Trends Q3 report showed an overall decline in demand of seven per cent year-on-year.

Retail demand has started to pick up as the ending of COVID restrictions and recovery of economic activity in many markets has increased consumer sentiment – jewellery demand increased 33 per cent year-on-year and bar and coin demand – a category of physical gold products overwhelmingly bought by retail investors – saw a year-on-year increase of 18 per cent.

But despite consumer demand starting to recover, ETF outflows, albeit modest, were enough to place overall gold demand into a year-on-year decline. This is a reflection of gold’s dual nature.

Economic growth is a primary driver of consumer demand. But institutional investment demand has other drivers, including the interest rate outlook and market uncertainty.

Gold ETFs have experienced outflows in six of the first 10 months of the year as ETF investors have generally followed gold price trends. The picture though is mixed – European and North American ETFs have seen outflows, but Asia-based ETFs have seen modest inflows this year.

Outside of slightly negative Q2 flows, Asian gold ETFs have consistently stood out as the often lone growth driver among global funds, having added nearly $US1.3 billion ($1.8 billion), or 18 per cent, in the year to end-October as concerns mount around regional economic growth.

Australia has similarly seen inflows where (as at October 31), gold ETFs saw inflows of 6.5 per cent.

Despite the overall modest outflows from ETFs in the last quarter, gold is once again regaining its shine. In October, gold gained 1.5 per cent in the face of a surge in inflation expectations, higher bond yields, and a weaker dollar. More recent news suggests that this will be sustained, meaning institutional interest in gold could once again pick up.

Andrew Naylor I N F L AT I O N M AY D R I V E I N T E R E S T I N G O L D As countries emerge from lockdowns and economies continue to recover from the impact of COVID, consumer demand (jewellery, bars and coins, and technology demand) is likely to be supported. When it comes to institutional investment demand, the shifting policy environment may be a challenge.

While gold has been inversely correlated with nominal interest rates over recent years, gold strengthened during October despite higher nominal rates. One of the reasons for this could be inflation expectations.

In the United States, CPI and wages grew the most in 30 and 20 years respectively. Here in Australia, core inflation jumped higher than forecast at the end of October, the quickest increase in six years.

Inflation will be a consideration in the minds of policymakers, businesses and investors for some time to come. This may renew institutional interest in gold.

Andrew joined the World Gold Council in 2016 and since 2020 has led the regional office in Singapore. Originally part of the central banks and public policy team, Andrew was responsible for the 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.

– 25 –

GOLD

Preparing for the next gold rush Despite stagnate gold prices amid a cryptocurrency threat, Fat Tail Investment Research gold investments editor Brian Chu believes a market correction beckons and there’s never been more reason to stick with the investment mainstay.

T

he constant commotion that surrounds cryptocurrency and its wider fanfare has thrown the resolute gold market into the limelight.

Investment analysts see a future for cryptocurrency as a long-term store of wealth, which some believe could usurp gold’s position as a portfolio backbone.

Stagnating prices haven’t helped gold’s cause in 2021, yet the market is still trending at three-year, five-year and 10-year highs.

It’s been easy to forget that only a year ago, gold topped $US2000 ($2697) per ounce for the first time ever.

Gold hasn’t earned a reputation as an investment mainstay for nothing, and according to Fat Tail Investment Research gold investments editor Brian Chu, it’s important to not get carried away by the

crypto euphoria.

“I believe that there is a lot of merit in investing in cryptocurrencies but as to the claim in the crypto camp that gold is finished, where the central banks are calling gold a ‘barbarous relic’ and that cryptocurrencies are going to replace gold, I politely and respectfully disagree,” Chu says.

“I want to point out to the people who are of the same viewpoint as me, who are invested in gold and are wondering, ‘Have we done anything wrong? Should we change sides? Should we abandon gold?’, I emphatically say no.”

Starting his investment journey during the 2013-14 gold bear market, Chu has accumulated enough funds to turn his investments into a full-time career.

Chu leveraged his investment success

Fat Tail Investment Research gold investments editor Brian Chu.

and capability to establish the Australian Gold Fund in August 2019, which he says is outperforming the ASX gold index by 15 to 20 per cent per annum.

He believes that despite gold’s current languor, the market will rebound as banks choose to step in.

“I will disclose that I have started investing in one cryptocurrency ... but I am still predominantly invested in gold, and I will remain so because the central banks have begun to taper their currency supply,” Chu says.

“For example, the Reserve Bank of New Zealand, they raised interest rates (in October). So, the central banks are starting to act on trying to normalise the monetary and economic cycle.

“The talk of raising interest rates normally puts a dampener on gold but after

The best run gold mining companies tend to pounce on competitors during lean times.

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AUSTRALIAN RESOURCES & INVESTMENT

the banks actually act on it, it is providing tailwinds for gold because as the economy faces higher interest rates, you’re going to see asset prices begin to pare back.”

Typically, when interest rates increase, greater economic stability is achieved in regulatory eyes, and stock prices begin to drop as businesses and consumers cut back on spending.

As investors turn their attention to safe havens, capricious markets such as crypto might then feel the pinch.

“Given that many asset markets have moved well ahead of themselves in valuation terms, and the VIX index (volatility index), which represents the level of confidence or fear in the market, is near 52-week lows, my suspicion is that people that are very bullish and exuberant in the market are going to be caught short in this tightening cycle,” Chu says.

“They’re going to start taking massive hits while the smart money is moving to safe havens and instead of cryptocurrency, which is often considered an exuberant asset market, I think gold and gold mining companies are going to be beneficiaries of this tightening cycle.”

While not ordinarily considered safe havens, Chu suggests some cryptocurrencies will offer similar attributes to a reliable asset class such as gold and could be relied upon in the instance of a market correction.

“There are certain cryptocurrencies that are very speculative and perform well in a bull market but there are also cryptocurrencies that are quite conservative and maintain their price in the market regardless of the market situation – those are also safe havens,” he says.

“I believe there will be funds that move out of exuberant and overheated asset markets into gold and some into the safer part of the cryptocurrency market.

“That’s why I hold to my quiet confidence in my gold investments, and I encourage other people to consider this perspective if they don’t want to be caught holding the bag in the upcoming market correction.”

At the base of the gold market are the gold mining companies which generate the resources to drive this particular asset class.

In Australia, the most successful gold mining companies work 10 steps ahead to ensure they have the foundations to not only weather market storms but capitalise on them.

Chu believes it’s important to not get carried away by the crypto euphoria.

“Some of the best run gold mining companies manage their balance sheet so well that in the soft part of the cycle, when everyone else is struggling to keep their lights on, these are the companies that are making offers to buy up and take over their competitors at a discount,” Chu says.

With the stagnating gold price, midtier gold mining companies Westgold Resources, Gold Road Resources and Ramelius Resources have gone tit for tat in two separate takeovers.

Between September and November, Westgold was watching Gascoyne Resources like a hawk, making two separate plays for the junior gold miner.

The company initially offered one Westgold share per four Gascoyne shares for a value of 44 cents per Gascoyne share, before raising its bid to three Westgold shares for every 11 Gascoyne shares, valuing Gascoyne at 53 cents per share.

Gascoyne remained defiant, rejecting Westgold’s first offer before proceeding with its original plan to merge with Firefly Resources, which shut the door on any Westgold incursion.

Gold Road and Ramelius Resources tussled for a takeover of Western Australia gold explorer Apollo Consolidated throughout October and November.

At the time of writing, Ramelius’ $181 million bid was the highest offer and had been unanimously recommended by the Apollo board.

Chu runs two gold stock investment services through Fat Tail, including the

entry-level Rock Stock Insider and Gold Stock Pro. Rock Stock Insider is focussed on mining companies in the more established end of the mining life cycle.

As the gold market lull continues, Chu has advised his Rock Stock clients to start shuffling their portfolio.

“This is a very good time to stand your ground and allocate more of your stocks into gold mining companies now as the other sectors and other asset classes are starting to get to that exuberant bubble phase,” he says.

Chu’s Gold Stock Pro premium subscriber service is focussed on the more speculative junior gold mining companies.

“For my (Gold Stock Pro) investors, I made some recommendations of companies that managed to withstand this period of time and they’re actually in the black in the last six months,” he says.

“Typically, in a market that’s hitting the bottom and is about to turn towards a bull market, it’s the smaller companies that move along with the largest companies, and then it’s the middle companies that follow afterwards.”

While cryptocurrency is likely to remain a threat for gold, it’s not all doom and gloom for the investment doyen.

Languishing markets incite stress but there’s always a rush on the other side – you just need to know where and when to jump.

To learn about Chu’s publications at Fat Tail Investment Research, head to fattail.com.au.

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RARE EARTHS

The future of rare earths in Australia

A

Demand for rare earth minerals is set to skyrocket by 2030 in response to an uptick in automotive and computer production. Here’s why.

ustralia holds the third largest rare earth oxide resource globally at 3.19 million tonnes, according to Geoscience Australia.

Despite this ranking, Australia is dwarfed by China, which holds around half of the world’s rare earth resources at 55.2 million tonnes.

However, the Australian Government is looking to boost the country’s position in the rare earths market with new projects progressing through the development stage, including Arafura Resources’ Nolans rare earth project in the Northern Territory.

The government will need to advance the country’s critical minerals projects through approvals as commodities such as coal begin to dwindle and decarbonisation becomes increasingly important to stakeholders and supply chains.

The only scale producer of separated rare earths outside of China is ASX-listed Lynas Rare Earths, which operates the Mt Weld mine in Western Australia.

Mt Weld is one of three rare earths mines in Australia, alongside Northern Minerals’ Browns Range site in Western Australia and Iluka’s Eneabba operation in Western Australia.

The push for development of more rare earths projects in Australia comes at a time when China is plotting to increase its stranglehold on the rare earths market even further.

According to Arafura managing director Gavin Lockyer, China’s Made in China 2025 strategy aims to transform the Asian superpower from a low-end producer to a high-end manufacturer.

This includes ambitions of a strong foothold on the electric vehicle (EV) market through the manufacture of components and production that require a steady supply of rare earth metals.

“Naturally the typical carmaker jurisdictions of Japan, South Korea and the European Union are extremely concerned about this,” Lockyer explains during a

– 28 –

Sydney Mining Club presentation.

Lockyer says these carmakers are looking for alternative rare earth supply outside of China, with Arafura hoping to cash in on this growing demand by starting production at the Nolans project in late 2024.

Most rare earth mines have the minerals processed overseas in countries like China and Malaysia, but Lockyer hopes Arafura can show how Australia can be selfsufficient as a producer of them.

“Australia no longer wants to dig things up and ship it out – and the way we can change that, because we do have the critical minerals in this country, is by starting to do downstream processing,” Lockyer says.

“EV is the growing area (for rare earths) Mt Weld is one of the highest-grade rare earth deposits globally.

and most analysts are forecasting between eight-to-10 to 40 times of growth in demand over the next 20 years, and this will require six to 15 times more rare earth elements.

“China is becoming a much larger importer of raw materials and that is simply to meet its own demand requirements. There may be a point very soon where China can’t even produce material that it can export because it needs it for itself.”

Rare earths are used for magnets in EVs and require a small amount that is crucial to delivering an EV off the production line.

According to Wood Mackenzie battery raw materials director David Merriman, rare earth demand has moved more towards the magnet space

AUSTRALIAN RESOURCES & INVESTMENT

instead of the ceramics industry.

“Between 2005 and the mid 2010s was seen as a fundamental change in the rare earths industry transitioning away from an industry largely dominated by the use of rare earths in ceramics in small volume but high value elements … and in the catalysts used in ICE (internal combustion engine) vehicles,” Merriman says.

Wood Mackenzie states that total rare earths production will reach almost 230,000 tonnes in 2021.

Adding to Australia’s downstream capabilities is Lynas’ proposal to commission a rare earth processing facility to support the Mt Weld mine.

The Western Australian Environmental Protection Authority (EPA) has recommended environmental approval for the company’s proposal for this project.

Lynas has sent its rare earths concentrate from Mt Weld to its processing plant in Malaysia since 2012. However, an Australian processing facility would crucially provide the company with an onshore alternative.

Perth-based Lynas has also signed agreements with the United States Government to develop a heavy rare earth plant and light rare earth plant, which

would enable more downstream processing outside of China.

This aligns with Lynas’s 2025 growth vision, which focusses on delivering upstream processing close to its mine sites and downstream processing close to its customers.

The company’s growth will also focus on increasing Mt Weld’s rare earth supply in the coming years, with a new exploration campaign under way in the 2021-22 financial year.

“We are excited to have completed a onekilometre-deep exploration drillhole into fresh carbonatite below the current Mt Weld open pit mine,” Lynas states.

“This is the first time we have drilled to this depth. Further detailed analytical work is being conducted and the drilling report for this exploration is expected to be completed in early 2022.

“The Mt Weld orebody is recognised as one of the richest known rare earth deposits and expanding our knowledge of the orebody will help us to plan for future expansion.”

An increase in rare earth demand will strengthen Lynas’ position as the only scale producer of rare earths outside of China.

This footprint is set to expand as it engages with the Australian, Japanese and United States Governments to build a larger supply of rare earths.

Lynas achieved a record $185.9 million in sales revenue in the June 2021 quarter due to strengthening demand for the NdPr oxide.

“Critical minerals, including rare earths, are essential to the manufacturing supply chains for future facing green technologies such as hybrid and electric vehicles and wind turbines,” Lynas states.

“We are already seeing market demand accelerating as economies recover and consumers choose lower carbon technologies.

“Rare earths provide excellent exposure to global megatrends that will shape economies and consumer behaviour over the next decade, such as sustainable mobility, electronics and industrial automation and renewable energy.”

Rising demand for rare earths will require more mines to be commissioned, and with ASX-listed companies such as Arafura moving forward in their developments, Australia is strongly positioned to provide a steady supply of the materials outside of China.

Lynas’ Mt Weld rare earth processing plant.

– 29 –

IRON ORE

EMBRACING THE GREEN STEEL PHENOMENON Steelmakers are becoming more discerning on their path towards a net-zero future, and low grade or less sustainable iron ore producers risk being left out in the cold.

T

here is an awkward conundrum facing today’s tenaciously growth-minded world – how do you balance a desire for expansion with the necessity to reduce one’s footprint?

The iron ore industry faces this concern, with record production levels marred by ballooning emissions and the reality that investors, regulators, customers and employees are siding with the green transition.

While the global production of iron ore decreased by three per cent to 2.2 billion tonnes in 2020, led by reduced outputs in Brazil and India, the industry is expected to bounce back.

According to Fitch Solutions, worldwide iron ore output is set to average 2.4 per cent

from 2021 to 2025, with Australia’s iron ore production set to grow at an annual average of 1.7 per cent over the same timeframe.

Given the role iron ore plays in steelmaking and broader industrialism, there’s going to be a continued need for this resource; the mining industry just needs to be smarter with how it is extracted.

McKinsey & Company partner Christiaan Heyning believes iron ore miners need to be more fastidious with the quality of their product before putting it to market.

“Demand for your products will differentiate depending on what you sell and to make it very simple – the purer the better and the higher Fe (iron) grade the better,” Heyning, speaking at the 2021 AusIMM Iron Ore Conference, says.

Heyning suggests this will lead to tougher decisions regarding lump and fine iron ore products, with the former being a more sustainable option as it doesn’t need to be sintered, but a more expensive commercial product at that.

Then there’s direct-reduced (DR) pellets, an even more premium product, delivering an Fe grade of up to 67-68 per cent.

“There’s going to be huge growth in DR (direct-reduced) pellets. You already see some companies already moving into that space and starting to produce pellets even if they don’t produce the steel themselves,” Heyning says.

Brazilian major Vale is the world’s leading producer of iron ore pellets, producing 55.3 and 41.8 million tonnes (Mt) in 2018 and 2019 Pelletising is important to the green steel value chain.

– 30 –

AUSTRALIAN RESOURCES & INVESTMENT

respectively, before dropping to 29.7Mt in 2020 due to disrupted dam operations across some of its mines in Brazil.

In February 2021, Vale executive director Marcello Spinelli forecast the company would recover its iron ore pellets production to between 50-60Mt per annum in 2022.

Despite being a global iron ore fortress, pelletising isn’t a prominent practice in Western Australia, and Heyning believes the state has an opportunity to further embrace this sustainable method.

“That is one of the questions I would have for Western Australia. It seems quite obvious that if the world wants hydrogen-based pellets that they could be made in WA,” he says.

“It’s not immediately obvious who would do that – would that be done by the miners, would that be done by the steelmakers or would you get dedicated pellet makers.

“So how the value chain will play out there is still very much open for debate.”

Pelletising is already an important method in the sustainable steelmaking value chain and the continued decarbonisation of this will continue to benefit net-zero pursuits.

Global mining technology developer Metso Outotec is at the forefront of sustainable pelletising developments and continues to explore opportunities in this regard.

“Pellet plants are likely to play a prominent role in the future and what can be done to support a carbon-neutral future as far as this particular technology is concerned?”

Metso Outotec Asia Pacific president Stuart Sneyd says.

“Things that we consider are alternative burner fuels such as biofuel and hydrogen in pellet plant powering, process modifications for energy efficiency and new hoods for electrification – all of these things under development are being considered.”

Metso Outotec recently added a digital solution to its iron ore pelletising process with the aim to improve production capacity and quality, while reducing energy and costs.

The company has iron ore pellet plants in Brazil, China and Africa but not in Western Australia, according to public contracts.

Pelletising is just one piece of the green steel puzzle and there are many other possible considerations to decarbonise this important value chain.

Many of the unanswered questions that encircle the future of green steel revolve around hydrogen – coal’s potential replacement in steelmaking.

At this point in time, hydrogen is expensive to produce, difficult to transport

Western Australian iron ore miners have an opportunity to embrace green steel.

and store, and highly flammable and dangerous.

While green steel can also be produced through renewable energy or alternative reducing agents, hydrogen is going to play an important role in the future viability of this sustainable practice.

In November, the Western Australian Government awarded a contract to GHD Group to investigate the role the state’s iron ore can play in the global green steel movement, unpacking hydrogen capabilities as part of that.

In partnership with ACIL Allen, GHD Group will initially identify opportunities and current barriers for Western Australia to support this revolution.

The next step will be to examine infrastructure needs, market dynamics and policies to solidify the state’s understanding of the green steel value chain.

Minerals Research Institute of Western Australia (MRIWA) chief executive officer Nicole Roocke says the state’s examinations would be centred around its Pilbara and Mid West regions.

When understanding the market dynamics for green steel, it will be important to understand the costs involved – a particular barrier for the implementation of hydrogen. “(By analysing future market dynamics) we’ll be looking at what the demand for low

grade and high grade ores are going to be into the future, and look at the jurisdictional and mineral endowment differences,” Roocke says during the AusIMM conference.

“Also, to understand that if hydrogen is to be part of the solution, where does it have a role to play and what do production costs need to be to be able to make it economic.”

Roocke says the examinations will establish the clarity Western Australia needs to explore a green steel opportunity intelligently and efficiently.

“The whole intention of doing this work is to be able to ensure that both from a Western Australian Government and industry perspective, we have an understanding of what the opportunity is, and we have a better understanding of what the risk is to the state,” she says.

“But importantly, we understand what’s needed from industry, government and the research community to be able to embrace that (green steel) opportunity.”

Whether it’s evolutions in pelletising, the implementation of hydrogen across the value chain or any other green steel development, the future of the iron ore industry hinges on its embrace of steelmaking’s new frontier.

Those unable to adapt are likely to be left behind as steelmakers discern which mining companies will best assist them in meeting their net-zero obligations.

– 31 –

INDUSTRY OUTLOOK

Gold Fields has added solar grids to its WA gold mines.

Mining execs seek opportunity amid green risk A

Global mining executives consider environmental and social issues as the top risk and opportunity in the year ahead.

s the mining industry moves towards a greener future, emissions targets and stakeholder pressure are playing a part in the changes the mining industry is undertaking.

The EY report, Top 10 Business Risks and Opportunities for mining and metals in 2022, outlines how environmental and social risk has jumped to the top of the agenda for mining executives.

It includes a survey of 200 global mining executives who have given insight into the most significant risks the industry is facing in the next year.

The report reveals that 25 per cent of mining executives list environmental and social issues as the number one risk and opportunity for the industry, after it placed fourth in last year’s survey.

This is followed by decarbonisation in second place and licence to operate, which ranked as the most significant risk last year.

EY global mining and metals leader Paul Mitchell says stakeholder pressure has

– 32 –

brought environmental and social risk to the forefront.

“The biggest factor has been the influence of the capital markets. Those capital markets reflect more and more what society is thinking,” Mitchell tells Australian Resources & Investment.

“The other factor is just change in leadership ranks and just a better recognition of what people are looking for.

“The average CEO (chief executive officer) tenure is five years but 50 per cent of them turn over in two to three (years) and so you can almost get generational change in CEO attitudes every two or three years, and so those factors have been playing out and meaning this is much higher up the agenda for people and a much higher focus.”

Mining companies have been pushing a greener focus in recent years as stakeholder demands for environmental, social and governance (ESG) factors increase.

Fortescue Metals Group launched Fortescue Future Industries, which was established

in 2018 and has created high purity iron ore using 100 per cent green energy, as one of its ESG initiatives so far.

BHP has shown a similar focus at its polymetallic Olympic Dam mine after signing a renewable energy supply agreement with Iberdrola as part of its zero-emissions position for 50 per cent of its electricity consumption by 2025.

The diversified mining giant has also joined forces with South Korean steelmaker POSCO under a $US10 million ($13.5 million) memorandum of understanding (MoU) to reduce greenhouse gasses in steelmaking.

The MoU aims to improve coking coal quality used to power steelmaking processes and explore emission reduction technologies such as using biomass in steel creation.

“I don’t think (ESG) is catching the mining industry off guard anymore at the top end,” Mitchell says. “If you went back to three or four years ago, they were surprised by how rapidly the change happened.

“Investor and community relations have really changed. If you went back in time,

AUSTRALIAN RESOURCES & INVESTMENT

community relations were down the flagpole and now it’s a factor that boards and CEOs ask questions about, and the importance of that role has increased.”

EY states that stakeholder pressure across biodiversity and water management will continue to increase, which will require progressive mine closure plans.

The most significant environment and social risks and opportunities listed in EY’s report include local community impact, water management and green production.

“There’s probably jurisdictions that are ahead of us in terms of what they’ve done with decarbonisation and water management,” Mitchell says.

“The one that always surprises me is how far some of the South American countries have gone in terms of decarbonisation.

They’ve really taken advantage of the natural benefits of sunlight and flicked the switch on renewables at mine sites.”

The mining industry has also been dealing with the COVID-19 pandemic for almost two years, yet it has not impacted the progress of sustainability initiatives.

According to EY, the pandemic has also driven up the importance for mining companies to go beyond their regulatory obligations.

Forty-one per cent of mining executives surveyed are aiming to reduce their Scope 1 and 2 emissions between 2030 and 2040, while 49 per cent are aiming to reduce their Scope 3 emissions by 2041 to 2050.

The report states that incentives and grants may be on offer for early switches and capital markets are also expected to reward companies who make the move.

“Abating Scope 3 will be the real game changer in miners’ quest for long-term sustainability and performance,” EY states in the report.

“Our message to companies still hesitating over the issue is simple: unless you can control these emissions, you risk losing value and competitive advantage.”

New risks and opportunities in this year’s survey include uncertain demand (sixth) and new business models (ninth).

The pandemic has brought a newfound focus on digital technologies with digital and innovation being the seventh risk and opportunity listed in EY’s report.

For Mitchell, mining companies must apply a digital transformation strategy or risk falling behind the pack.

“They’ll lose competitive advantage without a doubt,” he says. “I always say that

productivity or costs come on our lists every year, but the reality is every year mining gets more expensive every day.

“The tonne tomorrow taken out is more expensive than today. As time goes on it gets harder and harder as mines get deeper and grades get lower.

“If you don’t keep driving innovation and improvement you either go out of business or you fall significantly behind.”

The report states that the pandemic has also lent itself to the need for more automated technologies due to hard border closures.

Mitchell says the next edition of EY’s report will once again have societal-based risk and opportunities at the front of the minds of mining executives.

ESG requirements for mining companies fall into maintaining a licence to operate, and with shareholder expectations rapidly evolving, mining companies must be active in various stakeholder groups to ensure their stream of support remains steady.

“People are seeing the opportunity that these risks give this year as chance to demonstrate that they’re worthy of getting the capital and mining resources and they are seeing it as an opportunity,” Mitchell concludes.

EY’s top 10 business risks and opportunities for mining and metals in 2022.

– 33 –

DIAMONDS

A NEW ERA BECKONS FOR AUSTRALIAN DIAMOND MINING The next wave of ASX-listed diamond miners is emerging with ambitions to put Australia back on the map as a producer of these elusive gems.

W

hen Rio Tinto closed the Argyle diamond mine in 2020 it was not only the end of an era for the major miner but also for Australia as a producer of the resource.

Rio Tinto operated Argyle in the East Kimberley for 37 years, producing more than 865 million carats of diamonds, most notably the coveted pink diamond.

Argyle kept Australia at the forefront of global diamond mining until the end, including as the world’s second largest producer last year, according to the Western Australian Department of Mines, Industry Regulation and Safety (DMIRS).

The DMIRS revealed in its latest statistics digest that Western Australia’s diamond sales increased to 17.4 million carats ($225 million) in 2019-20, which was the state’s highest level in more than a decade after an increase in Argyle’s final output.

Lucapa’s Mothae plant in Lesotho.

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However, the DMIRS also expects domestic diamond production to reach near zero following Argyle’s closure.

And while Australia diamond production may remain almost non-existent in the foreseeable future, there is hope on the horizon that the country will again rise up the ranks of producers.

The ASX still hosts a handful of diamond companies, with Lucapa Diamond Company one that has successfully pursued international operations in recent years.

Lucapa has, however, increased its diamond interests closer to home with the acquisition of the Merlin project in the Northern Territory.

According to the Territory Economic Reconstruction Commission’s final report from December 2020, the Northern Territory hosts the second highest amount of known diamond resources in Australia.

This could see diamond miners take advantage of the government’s support for growing its mining industry.

In May, Lucapa agreed to acquire the Merlin diamond project from Merlin Operations for $8.5 million.

The Merlin mine has a storied history in the Territory, being home to the largest diamond ever discovered in Australia in 2002.

It still contains a 4.4-million-carat joint ore reserves committee (JORC) compliant resource, which represents an acquisition cost equal to $2 per resource carat.

Lucapa aims to bring the mine back into production in 2023.

“When Merlin is brought into production it will be Lucapa’s third operating mine and when fully operational, it will significantly increase the quantity of diamonds being produced by Lucapa as a group and elevate Lucapa to a mid-tier producer,” Lucapa chief

AUSTRALIAN RESOURCES & INVESTMENT

executive officer and managing director Stephen Wetherall says.

“At throughput levels currently being scoped in the development plan, Merlin will also become the largest primary source diamond mine in Australia following the closure of Argyle.

“It has the distinction of being the source of the largest known diamond recovered in Australia when it recovered a 104-carat type IIa D colour diamond, and from what we see, there is potential for further large highvalue stone recoveries in the run of mine production, which itself has a value well above the world average.”

Lucapa is undertaking scoping studies at Merlin for the 10 kimberlite pipes contained in the resource.

The company’s development plan will adopt an innovative vertical pit mining methodology along with open pit and underground mining across the pipes.

Wetherall is confident that Australia remains a strong country for diamond discoveries, with the company also actively exploring its Brooking tenements in Western Australia.

“History has shown that Australia can produce high-quality high-value diamonds, and the closure of Argyle has left Australia without a commercial scale producing diamond mine,” Wetherall says.

“We are looking forward to changing that. Australia has vast areas that have not been fully explored and we see potential for further discoveries at Brooking and on the Merlin mining tenement and surrounding exploration tenement as identified

anomalies and targets are drilled and further exploration is conducted.”

Western Australia’s attraction as a diamond mining jurisdiction has also been improved by a reduced diamond royalty rate, with the state government cutting diamond royalties from 7.5 per cent to 5 per cent in 2020.

The DMIRS states this was implemented to ensure all diamond miners have the same royalty rate as Argyle did, boosting the attraction for further diamond mines to come online in the absence of the historic Rio Tinto site.

Burgundy Diamond Mines is also growing its Australian focus after Argyle’s closure.

The company this year secured an agreement with Gibb River Diamonds to acquire the Ellendale project in Western Australia.

Ellendale is a globally recognised site, with its past production including more than half of the world’s fancy yellow diamonds.

Burgundy’s plan is to restart production of fancy yellow diamonds at Ellendale in 2022 and cut and polish them at a purpose-built facility that it acquired in Perth this year.

According to Burgundy managing director and chief executive officer Peter Ravenscroft, the company will take an unconventional approach with its growth strategy, including the establishment of the cut and polish facility.

“It was an evolution of ideas, actually.

As we started looking at Ellendale, we realised a lot of margin went to downstream as it always does in diamond processing,” Ravenscroft says.

“If you focussed on fancy colour

Image: Rio Tinto.

Rio Tinto workers at the Argyle mine.

diamonds, you’re working in a very small niche and there’s opportunity to do things differently in that niche.”

Ravenscroft says Burgundy followed the blueprint of Rio Tinto’s processing facilities for its Argyle pink diamonds with the move into downstream cutting and polishing.

Burgundy received great support from the market in raising $50 million earlier this year to fund the evolving strategy.

Until production restarts at Ellendale, the company will start cutting and polishing fancy colour diamonds from third parties and will continue to offer this service after Ellendale is operational.

“We’re very excited about the potential and this focus on the small niche sector gives us the opportunity of establishing a unique end-to-end diamond business. We are now seeing ourselves as a company that produces and sells polished fancy colour diamonds, with an upstream business growing a supply of fancy colour rough stones,” Ravenscroft says.

So while Australia may no longer be a global diamond producer of note, the country does have prospects on the horizon through the likes of Lucapa and Burgundy.

And Australia’s pink diamonds from Argyle remain as popular as ever, with the inaugural Australian Diamond Portfolio Pink Diamond Index (ADPPDI) showing they have increased by 30 per cent since the site was closed.

Argyle has left a legacy that looks set to continue growing as the emerging next generation of diamond miners look to build a sustainable sector for the future.

– 35 –

COPPER

Surging prices excite copper bulls A record market for copper is giving junior Australian miners a major opportunity to capitalise on. Anthony Fensom writes.

Superior started a major drilling program in September.

S

oaring prices have sparked excitement among copper bulls, with the red metal hitting record highs amid low stockpiles.

Known as “Doctor Copper” for its ability to predict global economic activity, the metal has enjoyed rising demand as the world economy recovers from the coronavirus pandemic.

On October 15, copper for delivery in December hit a record high on New York’s Comex market, touching $US4.781 per pound ($US10,518 per tonne, or around $14,200) on the back of a global energy shortage and as stockpiles hit a 47-year low.

London Metal Exchange warehouses reportedly held just 14,150 tonnes of available copper, in an industry that consumes around 25 million tonnes a year.

Production from Chile and Peru, the

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world’s two largest copper producers, has also dropped due to disruptions including the suspension of output from Peru’s Antamina mine due to protests.

Although prices have since eased to below $US10,000 on fears over China’s property sector, analysts point to the increasing green demand driven by ‘net zero’ targets of major economies, together with the infrastructure spending plans of the Biden administration in the United States and other economies.

Analysts Fitch Solutions project that green demand from the power and renewables sector as well as autos will each account for 7.9 per cent of total copper demand by 2030.

It notes that renewables are “12 times more copper intensive” than traditional energy systems, while an electric vehicle

contains around five times more copper than its internal combustion engine rival.

“With its significant use in solar photovoltaic panels, wind power generation and electric vehicle production, copper will be the key beneficiary of the energy transition,” S&P Global analysts Aline Soares and Mitzi Sumangil explain in a November 2 report.

“We forecast global copper demand from solar and wind energy generation to reach 852,000 tonnes in 2022 and the growing electric vehicle market to account for 1.1 (million tonnes) in 2022.

“In addition, we expect rising demand due to expanding electrification infrastructure and upgrades to telecommunications infrastructure, particularly in China and the U.S.” NEW DRILLING For copper explorers such as Brisbanebased Superior Resources, the timing could not be better.

On September 17, it announced the start of drilling at its Bottletree copper prospect, with four diamond core holes totalling 2300 metres planned.

Located around 210 kilometres west of Townsville, Queensland, the company describes Bottletree as its “most exciting copper prospect.”

“Bottletree is a standout copper target, both in terms of its size and grade potential and is a key part of the company’s copper strategy,” Superior managing director Peter Hwang says.

The company has also established an exploration target for its Wyandotte copper prospect, with a resource definition drilling program and mining studies planned. The prospect has not seen any exploration since 1975.

Superior also aims to deliver a JORCcompliant resource at its Cockie Creek copper prospect by year-end, which is seen having the potential to host a significant

AUSTRALIAN RESOURCES & INVESTMENT

porphyry copper deposit.

The company could also benefit from the “clean and green” power provided by Genex Power’s Kidston project, making Superior a low carbon producer.

“Copper is benefitting from strong energy metal markets and rising demand for world-class deposits in Tier 1 jurisdictions,” Hwang says.

“We look forward to advancing our exploration activities over the year ahead, unlocking value from these highly prospective areas of Queensland.”

EXPORT EARNINGS RISE Ranked number two in the world for copper resources and currently the sixth-largest producer, Australia’s copper industry is set to benefit from the upturn.

Australia’s export earnings from copper reached $11.4 billion in fiscal 2021 and are projected to reach $14.4 billion by fiscal 2023, according to the Australian Government’s Office of the Chief Economist.

Mine output is projected to reach 910,000 tonnes by fiscal 2023, up 3.6 per cent from the 878,000 tonnes produced in fiscal 2021.

Exports are expected to be supported by a number of new or redeveloped projects, including Golden Cross Resources’ Copper Hill project, KGL Resources’ Jervois project, Havilah Resources’ Kalkaroo project and Cyprium Metal’s Nifty copper mine, according to the Resources and Energy Quarterly for September 2021.

Adding to majors BHP and Rio Tinto and other current ASX-listed producers including OZ Minerals, Sandfire Resources, Copper Mountain and Aeris Resources, a number of copper explorers have emerged in addition to Superior Resources.

These include Stavely Minerals, which is targeting western Victoria’s Stavely Volcanic Belt; Sultan Resources, focussed on the Lachlan Fold Belt of New South Wales; and Sky Metals, which acquired the Galwadgere copper-gold project in New South Wales.

In Papua New Guinea, Mayur Resources spin-off Adyton Resources has developed a portfolio of copper and gold projects within Papua New Guinea’s prolific Pacific Rim of Fire, including its Feni Island copper-gold project.

Miners’ increasing bullishness is shown by surging exploration spending, which reached $120 million in the June quarter 2021, up 44 per cent year-on-year.

Nevertheless, the government forecaster

sees prices easing back from $US9122 a tonne in 2021 to a “still strong” $US8650 a tonne by 2023, amid concerns over the strength of China’s post-COVID recovery and expected pick-up in South American production.

NEW IPOS Initial public offerings (IPOs) are another indicator of investor sentiment and a number of copper-focussed IPOs have reached the Australian bourse in 2021.

Among them, Revolver Resources has announced the start of field work at its Dianne project in North Queensland, with the mine having previously produced more than 63,000

tonnes of high-grade copper during the 1980s.

Other new listings include Askari Metals, which has reported high-grade copper results from its Horry copper project in Western Australia; Copper Search, focussed on South Australia’s Gawler Craton; and Kincora Copper, with its Trundle Park prospect in NSW. Will the positive momentum for copper continue into 2022?

“Copper is the key ingredient in manufacturing and major economies’ decarbonisation drive,” Hwang says.

“Boosted by COP26 targets, there is every sign this push is only going to further accelerate.”

Drilling activities at Superior’s Greenvale prospect.

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MINERAL SANDS

VICTORIA TURNS THE SANDS OF TIME

The Victorian mineral sands industry holds the potential to satisfy a growing market on a global stage. How will the state make the most of this opportunity?

V

ictoria may be historically known as a gold mining state, but it is the mineral sands sector that could shape its future.

Australia’s mineral sands endowment includes an estimated 274 million tonnes (Mt) of ilmenite, 79Mt of zircon and 35Mt of rutile.

Of these resources, Victoria holds 23 per cent of the country’s ilmenite, 42 per cent of its zircon and 55 per cent of its rutile – ranking second, first and first, respectively, among Australian states.

Once processed, the minerals are widely used in products such as paint, paper, plastics, ceramics and welding materials, plus a range of clean energy technologies.

Reasons both environmental and economic are what motivate companies like Iluka Resources and Astron Corporation to develop their respective resources in western Victoria.

Iluka owns the WIM100 zircon and rare earth minerals deposit in the Wimmera region, 300 kilometres west of Melbourne, and has operated in the state for almost 20 years.

The company also owns several similar WIM-style tenements nearby – known for their fine grain characteristics – but industry has been stalled by the difficulty in processing such resources.

As the zircon within some of western Victoria’s mineral sands deposits contains impurities – including the 200Mt WIM100 deposit – companies like Iluka are faced with a significant technological challenge.

Iluka chief financial officer and head of development Adele Stratton says the ability to process the minerals is key to the project’s feasibility.

“Without purification, the zircon is ineligible for the ceramics market. Ceramics account for approximately 50 per cent of the global zircon market and a zircon project that is ineligible for this market is not viable unless an economic means of purification is confirmed,” Stratton says.

“Iluka has invested considerably in

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developing such a solution over a number of years and continues to make pleasing progress.”

Nearby, Donald Mineral Sands (DMS) was created as a subsidiary of Astron, which has owned the Donald mineral sands project since 2004.

Just 90 kilometres northeast of WIM100, the Donald project has its own 5.4Mt of zircon, 9.2Mt of ilmenite, 8Mt of titanium products rutile and leucoxene, and 491,000 tonnes of rare earth elements.

DMS managing director Tiger Brown says the company has so far been happy with its efforts to develop a processing solution.

“Through the advancement of spiral technologies, commercial recovery questions

have been addressed,” Brown says.

“Using specially adapted spirals for the fine-grained material, Astron has conducted pilot test work to concentrate the ore to a heavy mineral concentrate and then undertake mineral separation to final products with high recovery levels.”

Not only can these resources be a cause for the state’s economic growth, but their end-use could be vital for the wider environment and society.

Brown says DMS would be proud to see its resources put towards the production of a range of green technologies, which in turn could facilitate the ongoing development of the 40-year mine resource.

“These elements have many different

AUSTRALIAN RESOURCES & INVESTMENT

applications but are particularly important in their role in renewable and green energy transformation,” Brown says.

“Whether it may be for windmills or electric vehicle motors, rare earths are a critical element.

“The Donald project, given its significant rare earth element component, can be expected to play a valuable role in assisting Australia achieve its critical mineral objectives.”

The growing demand for these products is just one reason miners and regulators alike forecast a positive outlook for the Victorian mineral sands industry.

Iluka already has proven prowess in minerals processing, with operations in Western Australia, South Australia and Sierra Leone in West Africa.

Stratton says the company will use this experience to take advantage of opportunities which arise over the coming years.

“Concerns around future industry supply are increasing as the supply outlook for quality mineral sands declines,” Stratton says.

“We are seeing the high grade and quality of Iluka’s products being more and more

sought after; and we are well positioned to address supply over the near and longer terms by deploying our operations, technical resources, product suite and development pipeline.”

The Victorian Government’s Head of Resources John Krbaleski says the development of the state’s mineral sands projects could one day feed into a circular economy for these green technologies.

“With several solar and wind projects being evaluated in northwest Victoria, there may be opportunities for future heavy mineral sand operations to be powered by renewable energy that enables the responsible production of the metals required,” Krbaleski says.

However, with various miners in the same development boat where processing solutions pose one of the biggest hurdles, significant opportunity arises for collaboration within the region.

Krbaleski expects industry to work together towards a shared goal in this way, saying there is a collection of projects that enable an opportunity for shared processing facilities to arise.

“Given that we have a world-class METS (mining, equipment, technology and

A test pit at Iluka Resources’ WIM100 mineral sands deposit.

Astron has completed mineral sands concentrating and processing test work.

services) sector, I’m confident we have the people to deliver that innovation and bring down processing costs,” Krbaleski says.

Overall, the economist by trade is buoyed by recent growth shown in the Victorian mineral sands industry.

He believes the state is taking a strong mining history and turning it into an even stronger future.

“I’m seeing a gold rush transition into a mineral sands rush. It’s looking really promising and what I’ve seen is several projects on both the west and the east of the state progressing at a significant pace,” Krbaleski says.

“These projects have been around since the 80s and 90s, but some things have really changed lately which could see them progress through the approvals process into operation.”

Another potential hitch for the Victorian mineral sands sector, however, is the regulation surrounding new mining proposals in the state.

MCA Victoria executive director James Sorahan says the removal of duplicate hurdles and a more efficient administrative process will allow for a more prosperous mineral sands industry.

“Victoria ranks poorly on perceptions of public policy on mining investment according to the Fraser Institute’s Annual Survey of Mining Companies, with Victoria ranking behind every state other than Tasmania,” Sorahan says.

Sorahan says government action will be key to improving this process, for the benefit of the mining companies, as well as the state’s economy and communities.

“The development of the pipeline of mineral sands projects would involve hundreds of millions of dollars in direct regional investment and create hundreds of direct operating jobs, while supporting indirect jobs and other businesses in Victoria,” he concludes.

– 39 –

LITHIUM

Drilling for lithium at Lake Resources’ Kachi project in Argentina.

Decarbonisation drive boosts lithium miners COP26 has reinforced the key role the global lithium mining sector will play in the decarbonisation efforts of the future. Anthony Fensom writes.

T

he global decarbonisation drive has picked up speed, with the COP26 conference highlighting the need for the transportation industry to curb emissions.

With battery metals such as lithium key to the electric vehicle (EV) and battery revolution, lithium miners worldwide are eyeing another wave of demand growth amid record high prices and limited supply.

Transportation accounts for 23 per cent of global emissions, giving the lithiumion battery sector a crucial role to play in achieving COP26 targets of global net zero by 2050.

Consultancy Benchmark Mineral Intelligence (BMI) forecasts battery demand

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from the auto sector alone will rise by 40 times between 2020 and the 2040s, as EVs become mainstream.

Another forecaster, Wood Mackenzie also sees decarbonisation sparking “unprecedented” demand growth for battery metals such as lithium, cobalt and nickel. It projects the world will need “an aggressive uptake in EV sales in all regions” to limit global warming.

“The lithium market would require 20 new mines the size of Greenbushes – currently the largest in the world – in operation by 2030,” the consultancy explains in its October 13 report.

The demand surge together with lagging supply have led to forecasts of a structural

lithium supply deficit widening from 2022 and potentially a “perpetual deficit” through to 2030.

“COP26 has highlighted the importance of industry stepping up to contribute to the global decarbonisation drive. Lithium has a crucial role to play and our projects will make a major contribution to electrifying transport in North America,” Sayona managing director Brett Lynch says.

The Brisbane-based company has rapidly grown its international footprint in 2021, developing in the Canadian province of Quebec a lithium resource base which it describes as the largest in North America.

In June 2021, Sayona announced with its bidding partner Piedmont Lithium the

AUSTRALIAN RESOURCES & INVESTMENT

successful acquisition of North American Lithium (NAL).

The lithium mine had been through three previous owners and had some $C400 million ($436 million) invested, including a spodumene concentrator and downstream refinery, but had failed due to the mine’s poor grades.

By blending spodumene (lithium) ore from Sayona’s nearby Authier lithium project with ore from NAL, studies indicated it could become profitable.

Lynch describes the acquisition as a “pivotal point,” not only for Sayona but also for Quebec. Sayona intends to build a “lithium hub” in Abitibi, Quebec, based on NAL, Authier and its emerging Tansim project.

The successful integration of Authier and NAL would position Sayona in 2023 to become the first and largest North American producer of spodumene concentrate.

The dust had barely settled on the NAL deal when Sayona announced on September 30 it was acquiring a 60 per cent stake in the Moblan lithium project in northern Quebec.

“There is a huge opportunity for Sayona to develop a new lithium asset base in northern Quebec, adding to our Abitibi lithium hub,” Lynch said.

Lynch points to Quebec’s advantages, including its low cost, renewable

hydropower and proximity to North American battery markets.

The provincial government has banned the sale of new petrol cars from 2035 and flagged billions of dollars of investment in a domestic lithium-ion battery chain, as it strives to curb greenhouse gas emissions.

The Canadian auto centre of Ontario has attracted billion-dollar EV investments from U.S. automakers such as Ford, General Motors (GM) and Chrysler parent Stellantis.

The automakers have pledged to reach a goal of 40 to 50 per cent U.S. EV sales by 2030, committing more than $US100 billion ($137 billion) to electrifying their line-ups.

LITHIUM TRIANGLE Another Australian lithium miner is also eyeing international demand, with its projects based in South America’s ‘Lithium Triangle.’

Lake Resources sees direct lithium extraction (DLE) technology as key to developing its “clean lithium” projects in Argentina, focussed on its flagship Kachi project.

Developed by its partner Lilac Solutions, DLE has the potential to produce a batterygrade concentrate within just a few hours compared to the traditional one to two-year period of conventional brine projects.

It also achieves higher recovery rates and reinjects water back into the aquifer, facilitating the sustainable supply chain Sayona has expanded in Quebec with the North American Lithium deal.

sought by EV makers.

The company is advancing a definitive feasibility study for Kachi together with an expansion study, having already secured undertakings for up to 70 per cent of project finance from the British and Canadian export credit agencies.

Its Cauchari and Olaroz projects offer added potential for expansion, with scoping studies and drilling planned over the next year.

The region has attracted intensifying competition for resources, with a bidding war erupting for Canadian miner Millennial Lithium, following the earlier acquisition

by China’s Zijin Mining of Canada’s Neo Lithium.

Other Australian companies active in the Lithium Triangle include Orocobre and Galaxy Resources, which completed a $4 billion merger in August.

“Lithium assets in the Lithium Triangle have great potential to fill part of the global supply deficit in coming years given the region’s attractiveness with large, proven brine assets. Lake is well positioned as a low cost, reliable source of lithium supply across a number of projects,” Lake managing director Steve Promnitz says.

“With one of the world’s highest purity lithium products and a sustainable extraction process that provides significant ESG benefits, Lake aims to advance our clean lithium development and become an independent new producer of this key battery metal.”

Lithium prices have tripled in 2021 to hit new record highs, with BMI predicting lithium carbonate prices could soar above $US40,000 per tonne in 2022 amid a growing structural shortage. In November, battery-grade lithium carbonate topped $US30,000 a tonne, after having dropped to just $US6100 a year earlier.

REST OF THE WORLD Australian lithium miners are active worldwide, including in the United States, with Piedmont Lithium’s North Carolina project and Arizona Lithium’s Lordsburg project in New Mexico.

In Europe, projects include European Lithium’s Wolfsberg project in Austria; Vulcan Energy’s “Zero Carbon Lithium” project in Germany; and European Metals’ Cinovec lithium/tin project in the Czech Republic.

With the world’s net zero drive accelerating, there is no sign of a slowdown anytime soon for Australia’s next wave of lithium miners.

– 41 –

ESG

BHP stays hungry As the world’s largest mining company, BHP understands its responsibility to inspire and incite the decarbonisation hunt. And with infrastructure and investments mounting, the company has started to walk the talk.

L

ike most mining companies, BHP isn’t dubious about the path ahead. The world needs to decarbonise, and as society’s inherent foundation, the mining industry is going to be at the summit of the renewable energy transition.

Validating BHP’s ambitions to reduce its operational emissions by at least 30 per cent by 2030, preceding the ultimate objective of a net zero operation by 2050, are initiatives and innovations to drive down emissions.

In 2021, BHP has invested capital into decarbonising its current operations, supporting future advancements and pledging its commitment to organisations committed to developing new-age strategies to combat the stark climate reality.

During the 2021 financial year, iron ore made up the highest level of Scope 3 emissions at BHP, producing 260.7 million tonnes of CO2e across this timeframe.

By March 2021, BHP had instituted

partnerships with three separate Chinese steelmakers to investigate ways of decarbonising steelmaking, an industry intrinsically fuelled by iron ore.

Backing the green innovations of HBIS Group, China Baowu and JFE, BHP had invested a combined $US65 million ($89 million) across the three companies, not to mention its support of Boston Metal’s $US50 million initiative to develop a separate decarbonised passageway for iron ore.

BHP chief executive officer Mike Henry says decarbonising steelmaking will offer the mining industry some of its biggest challenges.

“With our recent ‘Say on Climate’, we have come out and committed to a target of net-zero Scope 3 for both shipping and the supply into BHP. But of course, that leaves steelmaking out there,” Henry, speaking at the 2021 Financial Times Mining Summit, says.

“Steelmaking is going to be quite hard to decarbonise. That is point number one. With known technology, it is still not economic to do so.”

BHP holds a grand position in the world’s steelmaking enterprise, but grandeur doesn’t necessarily lead to regulation.

“Point number two is that BHP’s ability to determine that outcome as the seller of product rather than the procurer of product, given the position that we occupy in the industry, is not an absolute or as significant as it would be in the case of shipping or supply into the company,” Henry continues.

BHP’s engagement with others in the supply chain demonstrates the company’s belief in collaboration.

Its partnerships with HBIS Group, China Baowu and JFE will assist these steelmakers in reducing their Scope 1 and 2 emissions, while BHP in turn works to drive down its Scope 3 emissions.

Image credit: BHP.

BHP’s Nickel West operation in Western Australia.

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Image credit: BHP.

AUSTRALIAN RESOURCES & INVESTMENT

Through BHP Ventures, which is solely focussed on developing early-stage technology companies and start-ups, there are other decarbonisation endeavours in the works.

Henry hesitates from disclosing information on any immature workings, however.

“We also have, through our Ventures arm, some investments in even more bleedingedge or cutting-edge technologies to enable steelmaking decarbonisation,” he says.

“I cannot go out with integrity and commit to something that is still as earlystage as the decarbonisation of steelmaking is.

“I want to ensure that anything we are specifically putting a target out there on is something that we have a high degree of confidence in our ability to achieve and that we have a real understanding of both the technologies and the costs required for doing so.”

Decarbonising steelmaking is one piece to the net-zero puzzle, and forms part of BHP’s broader environmental, social and governance (ESG) strategy.

The ESG movement has separated the sheep from the goats, highlighting the ethical investors while exposing those less inclined to embrace the climate reality.

Henry believes the ESG movement is going to bring out the best in us, however, like introducing anything new of this scale, there’s going to be hiccups.

“In any time of significant rapid change

Olympic Dam is using renewable energy to decarbonise.

like we see on the ESG front, of course there are going to be unintended consequences and imperfections in the way the system operates along the way,” Henry says.

“The challenge for all of us is to come together and get the system operating in the way that the world needs it to operate as quickly as possible.”

In the event that the push for decarbonisation escalates the demand for certain resources, there’s also the potential for an unbalanced market.

“In the strong push for decarbonisation with the ensuing implications in terms of copper demand, nickel demand and so on, the world does need more copper supply to be brought to the market more quickly, and the same for nickel,” Henry says.

“Without a concurrent focus on community, water stewardship, biodiversity and so on, you could see unintended or bad consequences on those ESG fronts.”

Henry believes the mining industry must take a bird’s eye look at its ESG strategy before going all in.

“As we all look to grow supply in those commodities, it is important that it is done with a broad-based focus on ESG,” he says.

“Yes, the commodities supply decarbonisation, but we need to ensure that the standards are set around things like water stewardship, biodiversity, community engagement and Indigenous cultural heritage.”

With clear standards comes clear benchmarks, and in a perfect ESG world,

mining companies would be answerable to an overarching criterium. But there’s still work to be done in this regard.

“Right now, in certain areas the standards still have further to improve. They need to be as global as possible. The way that companies get benchmarked against them still has opportunity for improvement,” Henry says.

“If we can get all of that right, the world will be able to meet the needs of decarbonisation efficiently, timeously and in a way that sees concurrent improvement in absolute performance in other areas of ESG as well.”

BHP offloading its 80 per cent stake in BHP Mitsui Coal (BMC) – the joint venture representing the Poitrel and South Walker Creek metallurgical coal mines in the Bowen Basin – could demonstrate the company’s contracting embrace of this fossil fuel.

Initially flagging its intentions to offload BMC in August 2020, Henry says the assets have not provided the company sufficient profits.

BHP Minerals Australia president Edgar Basto says the divestment forms part of the company’s net-zero transformation, suggesting the need for higher quality metallurgical coal is imperative to align with steelmakers’ low-emissions obligations.

Elsewhere, BHP is on the decarbonisation hunt at the polymetallic Olympic Dam mine in South Australia, announcing it will enter renewable energy supply arrangements with Iberdrola to reduce emissions at the operation.

In October, BHP produced the first nickel sulphate crystals from its Kwinana nickel sulphate plant in Western Australia.

Nickel sulphate is a key material in the lithium-ion batteries that power electric vehicles (EVs), with more than 85 per cent of BHP’s current production sold to the futurebattery supply chain.

The production follows an announcement in July that BHP will supply Tesla with nickel from its Nickel West assets in a collaboration which will aim to make the battery supply chain more sustainable.

Again, Nickel West is another demonstration of BHP’s overarching ambition to suppress its carbon footprint.

Decarbonisation is not just a prevailing trend at BHP; it underlines every discussion and every investment.

With the fervour to act and the infrastructure mounting, the stage is set for BHP to inspire a decarbonised mining industry going forward.

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MINING SERVICES

OPPORTUNITY TO IMPROVE MINE CLOSURE AND REHABILITATION Through collaboration and knowledge sharing, Australian mining can continue to protect the environment when projects close – and leave a positive legacy for communities.

T

he global mining industry is yet to fully understand the magnitude of failed mine site closures. Companies need to develop multi-disciplinary skills to better identify, measure and manage closure risks, and share learnings from successful and unsuccessful site closures.

That is the view of Katina Strelein, a principle mine closure consultant at SRK Consulting.

“Failed mine closures are a significant long-term risk for mining companies,” says Strelein. “Site-remediation costs can last decades or centuries, and be far greater than expected.”

Energy Resources of Australia’s (ERA) problems with rehabilitating the Ranger project area reinforce the risks in mine-closure planning. In October 2021, ERA announced “material” cost and schedule overruns in Ranger’s closure and rehabilitation.

Ranger is Australia’s longest continually operating uranium mine. Located on Aboriginal land and surrounded by (but separate) from Kakadu National Park, Ranger has been a complex project to close.

Final site rehabilitation, at this stage, is expected by January 2026.

“Cost blowouts at rehabilitating Ranger should encourage the mining industry to increase its focus on mine-closure analysis and implementation,” says Strelein.

“Despite all the planning, ERA is still struggling to understand what is required to successfully close Ranger.”

Strelein recently wrote a paper on the early lessons of cost closure overruns at Ranger - Australia’s most studied mine on rehabilitation and closure.

“Ranger’s problems reinforce the complexities of understanding mineclosure risks, their potential costs and over what period those costs will be borne,”

Strelein continues.

Other Australian mines have had closure problems. The old Mount Morgan gold mine in Central Queensland is predicted to generate acid mine drainage problems for up to 500 years. The mine’s full rehabilitation is expected to cost hundreds of millions of dollars, possibly more .

United States mines have also had closure problems. Some superfund sites (abandoned waste sites) have had problems because of misunderstood and managed geochemistry.

Strelein believes mine-closure risks will increase this decade. “A large number of mines built in the ‘80s and ‘90s in Australia will likely close this decade. Some could face very costly problems. The United States is ahead of Australia in terms of the increase in mine closures, and the early evidence suggests many mines there have had rehabilitation issues,” she says.

A rehabilitated tailings dam with vegetation.

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AUSTRALIAN RESOURCES & INVESTMENT

Load and haul activities in a mine pit.

NINE TIPS FOR BEST-PRACTICE MINING CLOSURE: 1. R ecognise the importance of mineclosure planning: Ensure the issue has significant internal attention and resources. Find the right balance between planning for a new mine and a strategy for successful closure and rehabilitation.

2. F orm a multi-faceted team. Mine-closure planning is an issue for engineering, environmental studies, finance, community engagement, investor relations and other disciplines. Encourage a mix of views.

PL ANNING CHALLENGES Strelein says companies can underestimate the complexities of mining-closure planning.

“Consider a mine that opened in the early ‘90s and will close this decade. Conditions are very different now than in the early ‘90s when the closure strategy was devised.

The climate is changing, as are community expectations with site rehabilitation. It’s hard to know what will be required of a mine closure in 30 or 40 years’ time,” Strelein says.

Strelein believes the mining industry is still learning about site closure and rehabilitation. “Compared to other aspects of mining, mine-closure planning hasn’t been around that long. There’s a real opportunity for academic and industry research that contributes to the continued development of best-practice in mine closure and rehabilitation. Australia can be a leader in this field in the global mining sector,” she says.

Government regulation is another issue, says Strelein. “Governments and the global mining industry haven’t quite got their head around an agreed definition for closure criteria, or an agreed process for site relinquishment. Our industry would benefit from greater clarity on what constitutes a successful mine closure and rehabilitation.”

That is changing. The importance of understanding closure liability associated with a mine site is highlighted by the US Securities and Exchange Commission Rule S-K 1300, which came into effect in January this year. US-listed mining companies

when reporting closure liabilities will be required to disclose any uncertainties regarding their proposed closure methodology and cost estimates.

Strelein believes this and other changes will lead to greater awareness and appreciation of mine-closure planning. She wants there to be more focus on community needs with mine closures.

“It’s not enough just to close a mine.

We should strive to leave a positive legacy for communities. For example, repurposing open-cut pits to hold water for energy storage, and building renewables infrastructure that can power local communities,” she says.

The former Kidston gold mine in North Queensland, for example, is now being utilised as the site for the Kidston Clean Energy Hub combining pumped hydro energy storage system with solar and wind farms. The hub is currently under construction with completion of the project on track for 2024.

“Mine-closure planning is not just about minimising future risks and costs,” says Strelein. “Done well, it can identify commercial opportunities.”

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.

3. E xternal support: Large resource companies that have in-house mineclosure teams still need external technical support. Smaller miners might outsource this planning to a consultant. Ensure the consultancy has strong expertise.

4. Plan from the start: Implement a process for mine-closure planning at the start of new projects. The earlier this process starts, the greater the likelihood of developing a robust strategy.

5. S ensitivity analysis: Understand the risks in a mine-closure strategy and assumptions behind them. Model risks and conduct sensitivity analysis to understand the cost outcome if assumptions change.

6. Climate change: Model how different climate scenarios could affect mineclosure and rehabilitation strategies.

How would a proposed tailings dam fare if there are more floods or drought in the future? What would happen to site geochemistry?

7. Progressive updates: Implement a process of ongoing studies and trials, and progressive rehabilitations, to test mine-closure assumptions and reduce uncertainty. More testing along the way increases the probability of success when the project ends.

8. Process: Ensure mine-closure and rehabilitation is part of the organisation’s risk register, adequately reported on, and a boardroom issue.

9. S trive to leave a positive legacy: Plan beyond technical mine-closure and rehabilitation. How can the organisation leave a positive legacy for a community from the project? How can the community be engaged in the process?

– 45 –

E VENT SPOTLIGHT

IMARC unites the investment community Where global mining leaders connect with technology, finance and the future, IMARC is shaping up as a must-attend event for the industry in early 2022.

IMARC will exhibit cutting-edge technology and innovation.

A

s the leading international event series connecting sophisticated investors from around the world with mining company management teams both online and in person.

Mines and Money will leverage off the scale of the International Mining and Resources Conference (IMARC) and bring its unrivalled network of thousands of investors in-person to Melbourne, and online for those that cannot attend in-person.

Being co-located alongside Australia’s largest mining event, will not only put mining companies in front of the hundreds of investors that attend Mines and Money events, but will also reach thousands of private investors, with the event expecting upwards of 8000 attendees.

Mines and Money @IMARC provides an excellent opportunity to identify and compare new investments.

With professional investors meeting exciting explorers on the cusp of the next big discovery, near-production development companies and cash generative producers to discuss their next big mining investment.

GAIN INSIGHTS INTO COMMODIT Y T R E N D S T H AT W I L L G U I D E YO U R I N V E S T M E N T S Gold, silver, copper and battery metals are just some of the commodities you can expect to hear about from some of the greatest leaders in mining, investment and finance with more than 250 mining and resource experts providing the latest market commentary, project updates and insights into current commodity trends that can shape investment strategy.

– 46 –

CONNECT WITH SENIOR M A N AG E M E N T O F M I N I N G C O M PA N I E S More than 800 mining and energy companies are expected to attend the event. From diversified majors such as BHP, Rio Tinto and South32; to gold mid-tiers including OceanaGold and Evolution Mining; through to some of the most compelling exploration and development companies such as Multicom Resources and Wiluna Mining.

You will be able to assess and compare a range of companies from around the globe, across the commodity spectrum and at all stages of the life cycle by connecting with the senior management of mining companies directly on the expo floor.

H U N D R E D S O F N E T WO R K I N G OPPORTUNITIES Whether you’re looking for private equity, or private investors, there will be ample opportunity for you to meet thousands of decision makers, mining leaders, investors and financiers with more than 70 hours of networking opportunities.

Our bespoke AI-driven matchmaking platform pre-qualifies your investment needs and gives you the power to search investors by type, commodities, project stages, regions and stock exchanges of interest.

Enabling you to identify the right investors for your projects so you can schedule lucrative meetings, leading to more deals and opportunities.

IN-PERSON AND ONLINE As a hybrid event, you can expect more meetings, more connections and to meet more

international investors than ever before.

The hybrid event will welcome Australian attendees in-person to Melbourne, and international attendees from more than 130 countries online from January 31 – February 2, 2022.

Claim your complimentary investor pass at minesandmoney.com/imarc. Not an investor?

Not to worry - receive 10 per cent off delegate passes by registering with the discount code AUSRI.

Listen to insights from some of mining’s greatest leaders at IMARC, including: • Johan van Jaarsveld, chief development officer, BHP • Sandeep Biswas, managing director & chief executive officer, Newcrest Mining • Wendy Holdenson, chief operating officer, Mitsui & Co (Australia) • Troy Hey, executive general manager – corporate relations, MMG • Rohitesh Dhawan, chief executive officer, International Council on Mining and Metals (ICMM) • James Agar, group procurement officer, BHP • Mark Cutifani, chief executive officer, Anglo American • Lisa Ali, chief people & sustainability officer, Newcrest Mining • Rt The Hon. Helen Clark, chair, Extractive Industries Transparency Initiative (EITI) • Ian Hamm, chair, First Nations Foundation • Tom Palmer, president & chief executive officer, Newmont • Chris Griffith, chief executive officer, Gold Fields • Joanne Woo, global VP, division head of marketing & communications, ABB • Tony Makuch, president & chief executive officer, Kirkland Lake Gold • Michael Nossal, chair, IGO • Robyn Dittrich, VP, procurement – technology, communities & enterprise, BHP.

7 APRIL 2022

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THE LATEST EXECUTIVE APPOINTMENTS Keep up to date with the latest executive movements across the mining sector, including at Anglo American, Rio Tinto and Newmont.

Anglo American has appointed Duncan Wanblad as chief executive of the company following the retirement of Mark Cutifani.

Wanblad brings 30 years of international mining experience to the role, along with a deep understanding of Anglo American, having served in both executive and non-executive roles at the company.

He will commence as chief executive as of Anglo American’s annual general meeting on April 19 2022.

“Following a rigorous global process to identify Mark’s successor, including those on our internal succession plan, the board felt that Duncan is uniquely qualified to take Anglo American on the next phase of improvement,” Anglo American chairman Stuart Chambers said.

Rio Tinto group executive, strategy and development Peter Toth has stepped down, with his responsibilities to be divided between current executives.

He will leave the company on April 5 2022 and remain in an advisory role until the end of 2021.

Rio Tinto chief executive Jakob Stausholm said Toth has assisted in corporate strategy, portfolio restructure and climate change initiatives. Toth has

– 48 –

spent seven years at Rio Tinto.

Newmont will be the lucky recipient of Toth as he takes up a similar role as head of strategic development from July 1 2022.

Newmont president and chief executive Tom Palmer said Toth would contribute 25 years of industry knowledge to position the company for a strong future.

“Peter brings a wealth of global commodity experience that will benefit Newmont as we enter our next 100 years as the world’s leading gold company,” Palmer said.

“Peter’s extensive background in corporate, operational and sustainability strategy will ensure we deliver our purpose of creating value and improving lives through sustainable, responsible mining.”

Fortescue Future Industries (FFI) has appointed Paul Browning as president and chief executive officer of FFI North America, which will see him champion FFI’s aspirations of building large-scale green hydrogen energy production in North America.

Browning has been the president and chief executive officer of Mitsubishi Power Americas since 2016, where he has overseen a team of 2300 people.

According to FFI chief executive officer

Julie Shuttleworth, Browning comes with proven renewable energy experience and the entrepreneurial track record to advance FFI’s North American operations and grow its team.

Newcrest Mining non-executive chairman and non-executive director Peter Hay has retired, with the company appointing nonexecutive director Peter Tomsett to Hay’s role effective from the 2021 annual general meeting.

Tomsett joined Newcrest’s board in September 2018 and also serves as a member of the audit and risk committee, safety and sustainability committee and nominations committee.

He brings extensive gold mining business experience to the non-executive chairman role and has served in similar roles for Kidston Gold Mines, Equinox Minerals and Silver Standard Resources.

He also spent most of his recent career in North America and holds both Australian and Canadian citizenship.

Newcrest has also appointed Sherry Duhe as chief financial officer of the company. Sherry takes over from the departing Gerard Bond.

Duhe has spent the past four years as chief financial officer and executive vice

AUSTRALIAN RESOURCES & INVESTMENT

president of Woodside Energy, where she has established extensive finance and leadership experience.

She has also held senior international roles at companies such as Shell Exploration & Production, Royal Dutch Shell and ExxonMobil.

“Sherry has extensive international experience across capital intensive and complex industries and is also a proven top 20 ASX-listed company chief financial officer who will bring her extensive financial expertise and leadership skills to Newcrest as we execute our growth strategy,” Newcrest managing director and chief executive officer Sandeep Biswas said.

Duhe will join Newcrest in early 2022.

Diatreme Resources has appointed former Australian Deputy Prime Minister and Treasurer Wayne Swan as chairman and non-executive director.

With connections across all levels of government, Swan offers Diatreme a strong advocate for economic development, Indigenous engagement, environmental protection, and health and safety.

The addition will see Diatreme’s current chairman Greg Starr return to the role of a non-executive director at the company.

Diatreme is an emerging silica sands explorer and miner with a portfolio of projects spanning Western Australia and Queensland.

Chalice Mining chairman Tim Goyder has announced his retirement from the board, effective from the company’s 2021 annual general meeting.

Goyder founded Chalice in 2006 and has been crucial to the company’s growth into its development studies phase.

He has agreed to consult the company in a part-time advisory role until the end of June 2022.

The company has appointed Derek La Ferla as non-executive chair of the company from October 1 and will seek reelection at the upcoming annual general meeting.

Following its merger with Firefly Resources, Gascoyne Resources has scooped up Firefly managing director and chief executive officer Simon Lawson as its managing director and chief executive officer.

Lawson brings a wealth of relevant experience and familiarity with the Gascoyne asset base, in addition to having intimate knowledge of the Yalgoo assets

in Western Australia previously held by Firefly, including the Melville deposit, which Gascoyne plans to integrate into the Dalgaranga mine plan.

Having completed the merger, Gascoyne has now increased its landholding in the Murchison region to approximately 1200 square kilometres, with exploration projects currently underway.

Fenix Resources has appointed John Welborn as its non-executive chairman, effective from the company’s 2021 annual general meeting.

A highly accomplished and internationally respected mining company director and senior executive, Welborn has more than 20 years’ experience working in the resources sector.

Welborn was managing director and chief executive officer of Resolute Mining across a five-year period which saw the company’s market capitalisation grow from below $200 million to more than $1 billion, alongside a 300 per cent jump in its share price in the same timeframe.

Fenix stated that Welborn would assist in elevating the company’s iron ore capability which is currently represented by its Iron Ridge mine in Western Australia.

– 49 –

EVENTS

I N T E R N AT I O N A L M I N I N G A N D R E S O U R C E S C O N F E R E N C E ( I M A R C) | M E L B O U R N E | J A N UA RY 3 1 F E B R UA RY 2

After going virtual last year, IMARC returns in 2022 with a hybrid event – welcoming thousands of guests from Australia and overseas, in-person and online.

More than 130 countries will participate in Australia’s most influential mining event, with over 200 exhibitors and 70 hours of networking opportunities to take advantage of. The event encompasses a three-day conference diving into topics of exploration, investment, production optimisation technology and global opportunities.

Additionally, the expo floor will cover 13,000 square metres to accommodate the bigger-and-better machinery and equipment on show this year.

Tickets range from free passes through to premium delegate passes, so visit the site below to book your spot now. Please note, IMARC has been postponed from its original dates in 2021 to next year due to the impact of COVID-19.

• imarcglobal.com

– 50 –

A U S T R A L I A N M I N I N G P R O S P E C T AWA R D S | BR ISBA N E | M A RCH 17 The most esteemed and prestigious awards for the Australian mining and minerals processing industry, the Australian Mining Prospect Awards, return in March of 2022.

Mining has always been a part of Australia’s landscape, playing a major part in the development of this nation from its early days.

The sector remains vibrant and innovative, and for more than a decade the Australian Mining Prospect Awards have been the only national awards program to stop, take a look at what the mining industry is doing, and reward those who are excelling and going above and beyond, recognising and rewarding innovation.

The Australian Mining Prospect Awards were established in 2004 to recognise and reward excellence and innovation across the Australian mining industry.

• prospectawards.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 | F E B R UA RY 10 -1 1

I N T E R N AT I O N A L M I N I N G G E O L O G Y C O N F E R E N C E 2 0 2 2 | B R I S B A N E , S Y D N E Y, M E L B O U R N E , A D E L A I D E A N D P E R T H | M A R C H 2 2 -2 3

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

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

The event will kick off with an ‘Introduction to Gold’ pre-event on February 9, hosted by The Perth Mint, before the festivities unfurl across the following two days.

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.

At the time of writing, representatives from the likes of De Grey Mining, Evolution Mining, Calidus Resources and Kin Mining were locked in to present at the conference.

• goldindustrygroup.com.au

AusIMM’s International Mining Geology Conference will focus on maximising orebody value and increasing productivity through mining geology.

Hosted both in-person and online, the event will bring geologists, consultants, decision-makers, metallurgists, engineers, professionals and students together to explore new techniques and emerging technologies to enhance operations.

The conference will feature keynotes, a high-quality technical program, exhibition, virtual booths, interactive workshops and mine site tours.

Attendees can also network both in-person and virtually through a networking function, conference dinner, discussion groups and on-demand content.

This includes Geologize chief executive officer and founder Haydon Mort, who last year launched an on-demand training course, Practical Geocommunication, which teaches geoscientists how to connect with the public to encourage positive perceptions of the field.

• ausimm.com/conferences-and-events/mining-geology

, D E E N U .

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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.

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WHERE GLOBAL MINING LEADERS CONNECT WITH TECHNOLOGY, FINANCE AND THE FUTURE. The International Mining and Resources Conference (IMARC) is where global mining leaders connect with technology, finance and the future. As Australia's largest and most influential mining event, IMARC creates a global conversation, mobilises the industry for collaboration and attracts some of the greatest leaders in the mining, investment, and technology industries for three days of learning, deal-making and unparalleled networking.

Hear from more than 250 mining leaders and resource experts with a conference program that covers all aspects of the mining supply chain. From exploration, to investment, production to optimisation through to new technologies and global opportunities. Alongside discussions on health and safety, renewable energy, critical minerals, and sustainability.

IMARC is the only place where you can see cutting-edge equipment, technologies, innovations, and services for all your mining needs. Find new solutions from ground-breaking companies and the biggest names in the industry, discuss your specific challenges with knowledgeable technical experts, and get what you need to transform your operations. Whether it’s for exploration, mine development, sustainability, or safety, you’ll find it at IMARC with more than 200 leading companies exhibiting across the 13,000m2 expo floor.

With over 70 hours of networking, there will be ample opportunity for you to meet more than 8,000 decision makers, mining leaders, policy makers, investors, commodity buyers, technical experts, innovators, and educators at Australia’s largest mining event.

Due to ongoing travel and gathering restrictions, and the resurgence of COVID-19 around Australia, the 2021 edition will take place from January 31 - February 2, 2022. The hybrid event will welcome Australian attendees in-person to Melbourne, and international attendees from more than 130 countries via an online platform. Attendees will be able to log in online to stream live and on demand conference presentations, participate in virtual meetings and interactive networking

VISIT IMARCGLOBAL.COM TO REGISTER FOR AUSTRALIA'S MOST INFLUENTIAL MINING EVENT AND RECEIVE 10% OFF WITH THE DISCOUNT CODE AUSMINING

IN-PERSON & ONLINE 31 Jan - 2 Feb 2022 Melbourne Showgrounds