The race down under for lithium

Image: PwC

Australia’s mid-tier mining sector is predicted to charge ahead off the back of surging and cautious demand for advanced technologies.

According to the 12th ‘Aussie Mine 2018’ report published by Price Waterhouse Coopers (PwC), the leap in technologies including electric vehicles (EVs) and smartphones is driving a rush on lithium and interest in other tech metals.

All but three of the MT50 companies experienced remarkable results in terms of market capitalisation for a second consecutive year, up 28 per cent to $58.7 billion.

The interest in lithium represents the second biggest contributor to this growth, with seven lithium-related companies breaking into the MT50 this year.

PwC Australia mining leader Chris Dodd said, “We’ve seen another year of stonking results for the mid-tiers miners due to cost-focused strategies of prior years, the continuing upward trend in commodity prices and strong interest in lithium in particular, which is used in everyday electronics and increasingly in industry applications.

“This new boom is the fruit of the fourth industrial revolution, which has brought with it rising demand for modern conveniences like smartphones, electric vehicles, lightweight engines and next-gen batteries.”

Likewise, interest in other tech metals such as manganese, nickel and rare earths is observed.

The main contributors to the growth of the MT50 revenue are, however, gold miners. This is believed to reflect increased global tensions as “investors often flight to gold in times of high uncertainty.”

Dodd said challenges remained for the group, given its increase in operating costs (10 per cent) and impairments (56 per cent), and decrease in exploration (12 per cent).

“But most concerning is the waning interest in the sector from Australia’s future workforce,” Dodd said.

“Studies show broader industry-relevant tertiary enrolments have been declining in recent years, and mining engineer enrolments have dropped each year for five consecutive years, now plummeting to less than one-third of 2013 enrolments.

“[The mid-tier group] needs to work hard to remain relevant to future talent and proactively showcase the benefits of a career in mining, especially in the face of heightened competition for a newer age, digitally aligned workforce”