News - Market Insights

Australian mining companies are reluctant to invest in new capacity for fear of repeating historic mistakes, according to Deloitte Access Economics, casting doubts over a major source of business investment in 2019 (reports The Australian Financial Review). “Although profits are booming within mining, miners have been burnt before by adding too much capacity in good times, and they remain cautious about spending too much,” Deloitte partner and economist Chris Richardson said.

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Lithium producer Pilbara Minerals (ASX: PLS) could be on the radar of strategic partners

Lithium producer Pilbara Minerals (ASX: PLS) could be on the radar of strategic partners such as Wesfarmers, Mineral Resources and Livent, with a “value-accretive” deal potentially crystallising in the near term, according to Sydney-based institutional broking firm Blue Ocean Equities. In a fresh note released yesterday, Blue Ocean analyst Steuart McIntyre says that given the high prices paid recently for lithium assets, he sees merit in Pilbara testing the appetite with potential strategic partners.

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A 10 million-tonne copper supply gap is forecast to open up through 2035

A 10 million-tonne copper supply gap is forecast to open up through 2035, CRU senior analyst Hamish Sampson has told the World Copper Conference during a session examining factors determining the long-term outlook for copper and the copper price (reports MiningNews). "[Brownfield] expansions will keep pace with demand until early next decade ... but as demand increases to 22.5Mt by 2025 the gap will be 2.5Mt and then it will quadruple as production from existing operations falls to 15Mt," he said. Last year copper production was 20.9Mt.

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The surging iron ore price has sparked renewed investor interest in long-dormant iron ore assets

The surging iron ore price has sparked renewed investor interest in long-dormant iron ore assets, with juniors such as Centaurus Metals (ASX: CTM) well placed to benefit given its ownership of an advanced iron ore development project in Brazil capable of moving into production quickly. This is the key conclusion of veteran Sydney-based resource analyst Gavin Wendt.

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Sydney-based institutional broker Blue Ocean Equities has upgraded its recommendation on copper-zinc developer Venturex Resources (ASX: VXR) to “Top Pick” and lifted its price target for the stock to 70c – a healthy premium to its closing price on Friday of 21.5c. Blue Ocean analyst Steuart McIntyre – who made some big (and accurate) early calls on stocks like Pilbara Minerals (ASX: PLS) and Dacian Gold (DCN) – said in a new research note released last week that Venturex is pursuing two key opportunities which could “materially enhance” its value proposition.

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Construction will start on Australia's biggest lithium ion battery plant in Townsville next year if an Australian-led consortium secures debt funding when it completes a feasibility study at the end of September (reports The Australian Financial Review).

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Nickel is the clear winner in a three-stage minerals and metals “beauty parade”, scoring top marks as an investment over the next 12-months, 24-months, and a shared second place in the five-year category with its battery cousins, lithium and cobalt (reports Tim Treadgold on Stockhead). Interestingly, lithium and cobalt are not expected to join nickel as short-term winners because the current glut of material is overwhelming the market for electric cars which received a fresh setback this week when China cut subsidies for battery-powered vehicles.

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About 85-113 million tonnes of global iron ore production will be lost this year, according to BMO Capital Markets, following updates from major producers Vale, Rio Tinto and BHP (reports MiningNews). However RBC analyst Tyler Broda noted Vale's ability to draw down on stockpiles and tipped the Brazil-based miner would ship more tonnes into the seaborne market this year than in 2018, also pointing to the iron ore price easing.

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4th - 5th Jun 2019

Gold Coast Conference

The 2019 Resources Rising Stars Conference will be held on Tuesday 4 and Wednesday 5 June 2019 at the scenic RACV Royal Pines Resort on the Gold Coast. 

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