Mining appears to be turning the corner, following the serious downturn of the last few years.
First, share prices of mining companies in Australia are increasing, as measured by Australian stock exchange indexes. Take the last six months (up to 4 July). The index covering companies in “metals and mining” has increased by 30%, while the index covering companies in “resources” (that is, mining, coal and petroleum) has increased by 15%. This follows more-or-less steady declines since 2011.
Second, mineral prices are recovering. Prices of nearly all minerals fell more-or-less continuously from 2013 (and in some cases earlier) to late 2015. However, in the six months to 4 July, prices of most minerals for Australian producers have risen, as follows:
– 20-40% for iron-ore, coking coal, zinc, gold and tin
– 10-20% for nickel and aluminium
– 3-10% for copper and lead
Third, project activity appears to be increasing. The gold sector is buoyant. Rio Tinto and BHP Billiton both plan the expansion of their iron-ore operations, in part to replace soon-to-be exhausted mines. In proceeding with its A$2 billion Amrun bauxite project in Queensland, Rio Tinto underlines its confidence in the outlook for bauxite (the feedstock for aluminium).
MMG, a global producer of zinc and copper, is forecasting strong increases in zinc and copper prices between 2016 and 2021. Iluka Resources (a world leader in its field) plans two major mineral-sands projects, at Balranald in NSW and Cataby in Western Australia. And there is much market excitement about lithium, used in electric-car batteries.
Many projects are still at an early-planning stage (e.g. pre-feasibility study). Over the next two years, an increasing number are likely to move to the construction stage. They will include new projects and expansions.
To illustrate, here are some of the projects in Australia that Project Monitor reported on in May and June:
| PROJECT | LOCATION | PRODUCT(S) |
| Dalgaranga | WA | Gold |
| Edna May | WA | Gold |
| Gruyere | WA | Gold |
| Mount Morgans | WA | Gold |
| Bulk Ore Transport | WA | Iron-ore transport |
| Silvergrass | WA | Iron ore |
| Yandicoogina | WA | Iron ore |
| Eastern Ridge | WA | Iron ore |
| Thunderbird | WA | Mineral sands |
| Cyclone | WA | Mineral sands |
| Pilgangoora | WA | Lithium |
| Carrapateena | SA | Copper, gold |
| Olympic Dam | SA | Copper, uranium, gold |
| Amrun | QLD | Bauxite |
| Bauxite Hills | QLD | Bauxite |
| Hillalong | QLD | Coal |
| Meteor Downs | QLD | Coal |
| Cloncurry Copper | QLD | Copper, gold |
| Dugald River | QLD | Zinc, lead, silver |
| Mount Peake | NT | Titanium, vanadium+ |
| Northern Pipeline | NT | Natural gas |
| Syerston | NSW | Scandium |
| Dubbo Zirconia | NSW | Zirconium, rare earths |
| Woodlawn | NSW | Zinc, copper, lead |
