Diggers: Buoyant mood as battery minerals take centre stage
MPI’s Scott Deakin is in Kalgoorlie this week for Diggers and Dealers. Here’s what he had to say about the mood and what people are talking about.
Is mining’s centre of gravity shifting towards the battery minerals that we’re told will be so crucial to humanity’s future?
If day one of Diggers and Dealers 2023 is anything to go by, you might think so.
The MPI team is in Kalgoorlie this week for the mining industry’s annual get-together, talking to people from across the industry and all over the world about recruitment, skills, and mining’s state of play.
Investors excited about lithium
MPI General Manager of Corporate Development and International Mining Scott Deakin said much of the talk at the forum so far had been around battery minerals, especially lithium, after Pilbara Minerals Chief Executive Dale Henderson had been given top billing on the main stage.
“Certainly for the share market and investors, they’re gravitating towards battery metals because many of the projects that are moving towards development are battery metals,” Scott said. “As a proportion of the overall mining industry, they’re starting to become more prevalent.”
In June this year, analysts from McKinsey suggested battery minerals, especially lithium, were a significant opportunity for the Australian resources sector.
They said: “The opportunity for Australia is twofold: rising lithium demand and the country’s capacity to produce lithium hydroxide. The lithium hydroxide market may generate up to $10 billion per year in additional revenue for market participants by 2030—with the potential to create jobs, diversify Australia’s raw-materials industry, and support Australia’s push toward green energy”.
Current annual global lithium demand is 0.72 million metric tons of lithium carbonate equivalent (LCE) and is forecast to rise by 20% annually (31% for lithium hydroxide; 13% for lithium carbonate) to reach 3.06 million metric tons of LCE by 2030.
No wonder battery minerals have investors excited.
Gold feeling a little unloved
But Scott said while the gold sector might be feeling “a little unloved”, he sensed at Diggers that a change of sentiment was just around the corner.
“It’s still a really tight labor market, so a lot of the gold producers are still struggling with finding people and some of the inflationary pressures that pervaded the market over the last 12 to 24 months,” he said. “It’s still pretty tough for most of the gold producers and gold explorers, but I think there’s definitely a view that is pervading a lot of commentary that says that it will turn at some point soon. I think once the interest rates start plateauing in the US and globally, then all the gold prices will start to take off again. And I think then the gold space, after a tough couple of years, will start to gain some more prominence again.”
Mood buoyant despite mining’s ongoing labour shortage
While the mood around gold was still subdued, Scott said overall the atmosphere in Kalgoorlie was buoyant.
“It’s not all-out euphoria like probably two or three years ago when everything was post-COVID and we had the rebound in the economy, where it was just anything and everything was spiking and going stratospheric, but it’s still pretty buoyant,” he said.
Another factor was the “really tight labour markets”.
“A lot of clients are coming to us to either find people for them or ask what we’re seeing in the market, but it’s still structurally incredibly tough to find good people,” he said. “So we’re in a very similar space to where we were 12 months ago and I think that’s probably going to continue into the future as well.”
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