Critical minerals punch through

The latest PWC Aussie Mine report on Australia’s mid-tier mining sector charts the rise in importance of the critical minerals sector. There has been a significant shift in the make-up of the top 50 mid-tier miners, with rising value of critical minerals companies outshining gold for the first time. Gold companies still dominate - comprising 36 per cent of the MT50 by number and 33 per cent by value. But critical minerals companies have soared, and now represent nearly a third of the aggregate MT50 value - 34 per cent by number and 31 per cent by value. The PWC report showed critical mineral companies recorded the most significant increases in market capitalisation in FY21, largely thanks to lithium and nickel prices. The report summary noted that five of the seven new entrants to the MT50 this year were critical mineral projects. "Moreover, we expect high demand growth in critical minerals to continue for decades, presenting significant long-term value-creation opportunities," it states. "This includes opportunities to invest further along value chains, most notably in lithium chemicals." The report also noted clear evidence that environmental, social and governance (ESG) factors were starting to shapethe strategies of the MT50. "Our analysis also demonstrates that positive ESG strategies, including supporting the transition to a lower carbon global economy, aligns with long-term value creation," the authors state. "In an era where corporate trust has fallen, this focus on ESG increases the need for companies to clearly and fully communicate their strategies. It also requires companies to provide considerable additional information on their ESG ambitions, targets and performance, including data integrity and assurance." The market capitalisation of the MT50 increased by 50 per cent to a record $113 billion as at June 30. Other than gold, the values of all mineral groups increased significantly from the heightened uncertainty of mid-2020. "Record earnings and operating cash flows have supported a new period of growth in battery and critical minerals, gold, and energy transition metals (such as copper)," the report states. "This growth also provides MT50 companies with a strong platform to continue to focus on their ESG strategies and create long-term sustainable value." While coal prices had increased to record levels from the end of the financial year through to October 2021, this was expected to be temporary, and an unsettled future remained, the report noted. "Mining is critical to a low-carbon global economy. Battery minerals, other critical minerals, and energy transition metals are needed to support the considerable investment in wind turbines, solar panels, batteries, electric vehicles (EVs) and infrastructure – all of which are required on the path to net zero." Below: The Top 25 of the MT 50, showing changes in ranking and market capitalisation in the past year.

Critical minerals punch through

Industry Queensland

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