South East Asian mining projects are an appealing investment to some ASX-listed companies that are looking to uncover low-cost developments in underexplored regions.
The importance of tapping into future critical mineral supplies is a challenge that the world is preparing for.
The Australian Government is aware of this, creating the Critical Minerals Facilitation Office in 2020.
Last year, resources technology and critical minerals were also signposted as the top priority in the government’s $1.3 billion Modern Manufacturing Initiative and National Manufacturing Priorities.
While major mining companies are securing export deals for renewable energy and electric vehicle (EV) supply chains, smaller companies are also looking abroad to ride the critical minerals wave.
Pan Asia Metals is one of those companies. Listed on the ASX in October 2020, Pan Asia Metals has three tungsten and lithium projects in Thailand, in addition to a tungsten project in New South Wales.
Tungsten is widely considered a critical mineral and is generally used to produce hard metals.
Lithium, also a critical mineral, is primarily used for ceramics, lubricants and polymers. The future of lithium is anticipated to increasingly move towards its key use for lithium-ion batteries.
Pan Asia Metals was formed in 2017 by then directors Paul Lock, David Hobby, David Docherty and Thanasak Chanyapoon.
Lock, Pan Asia Metals managing director, says the company finished up exploring in Thailand partially “by design and part by accident.”
After initially targeting projects in Myanmar, a move held up by policy and licencing roadblocks, Pan Asia Metals developed a deep understanding of the South East Asian tin-tungsten belt.
“This belt contains some of the biggest tin producing regions historically, particularly Perak in Malaysia and Phang Nga in Thailand, where our Reung Kiet lithium project is,” Lock tells Australian Mining.
The company’s other sites include the Khao Soon tungsten project, and Bang Now lithium project, both in Thailand, along with the Minster tungsten project in New South Wales.
With the vision of becoming a low-cost speciality metals miner, Lock says South East Asia and East Asia both offer a cost-effective environment for junior explorers.
“Being in South East Asia, we have cost advantages and our markets are literally next door,” Lock says.
“We are looking for opportunities to secure projects which have the potential to be situated at the bottom of the opex (operational expenditure) and capex (capital expenditure) cost curves, and which offer the potential for value adding.”
With a joint ore reserve committee (JORC) mineral resource estimate scheduled for release this year, the company is also planning to undertake further drilling.
“We have been drilling at the Khao Soon Tungsten project and just released final assays, which are peer group leading,” Lock says.
“We will do some further drilling with the aim of delivering a JORC mineral resource later this year.”
Pan Asia Metals also plans to build off the EV momentum as it grows. The company is intending to use its lithium for lithium carbonate or lithium hydroxide, both used in lithium iron phosphate (LFP) batteries.
“For lithium, we will be targeting lithium carbonate or hydroxide, we don’t feel that there is any urgency for this decision as lithium-ion battery (LIB) chemistry is evolving and where it was until recently all about lithium hydroxide,” Lock explains.
“The LFP batteries, which will be used in lower end applications, use lithium carbonate, so there will be strong demand for lithium carbonate – we will make this decision closer to completion of our PFS (pre-feasibility study).”
Asia Pacific Metals sees Thailand as an adequate buyer for its future lithium supply.
“In Thailand, there is a big focus on EV and LIB production. Thailand may not be as large a manufacturer of these as China, South Korea and Japan, but it will be large enough for our purposes,” Lock says.
“For tungsten, this is a harder question, it is a growth area and there is a lot of development happening in additive manufacturing and specialty alloys, and hence new applications.”
Lock says there are unique advantages to South East Asia compared with major mining countries.
“I don’t see South East Asia as a metals producer like we see in Australia, Canada, Africa or South America, but for the metals producers in South East Asia they are generally low cost and very close to their markets,” he says.
“There are huge advantages to this geography that most exploration and mining companies do not have.”
Minerals Council of Australia (MCA) chief executive officer Tania Constable says Australian-based mining companies have the ability to grow projects in South East Asia.
“Developing the potential for mining in South East Asia and encouraging Australian mining expertise in the region will ensure that mining is able to combine social contribution, responsible environmental management, leading practice governance to deliver positive local and regional community, environmental and economic outcomes,” Constable says.
On the other hand, the MCA has flagged Asia’s overall demand for Australian commodities and METS (mining, equipment, technology and services) companies.
“The Australian METS sector is focused on exports and has long experience in meeting the particular needs of different regions and geologies,” Constable says.
“Increasingly, equipment is digitally integrated, allowing more data to efficiently target resources, operate more safely and minimise environmental impacts.”
Australian-based Medusa Mining is a gold mining company looking to expand its foothold in the Asia Pacific region by taking advantage of these conditions.
The company has operated the Co-O gold mine in the Philippines since 2006 and owns multiple exploration projects set up within the area. The CO-O mine reached its million-ounce production milestone in 2020.
“(The) Co-O mine has a proven history of successfully mining and developing a narrow-vein high-grade deposit,” Medusa Mining chief financial officer Patrick Warr says.
“The tenements are in the right geological address with the surrounding areas very prospective.”
Warr believes the Philippines is a prospective area for mining, saying it is a historically proven country that is endowed with rich mineral deposits.
Corporate tax rates in the Philippines have been reduced to 25 per cent, while the government has also lifted a ban on new mining and exploration licences through Executive Order 130.
“The Philippines is a known rich area of mining,” Warr says. “(The) government recently lowered corporate tax rates, and Executive Order 130 may further boost the economic development in the mining industry.”
According to Constable, the MCA supports these efforts from Australian-based miners.
“The MCA champions and supports a strong mining sector in Australia and at operations around the world,” Constable says.
“The mining industry continues to sustain economic growth and prosperity in Australia, at operations around the world and in the countries which import mined products and are developing their own mining sector.”
This story also appears in the June 2021 issue of Australian Mining.