The battery and critical minerals boom is well and truly here as mining companies such as Pilbara Minerals, Chalice Mining and Galaxy Resources catapulted in value over the past 12 months.
As part of its 16th Aussie Mine report, PricewaterhouseCooper (PwC) unveiled updated rankings of the mid-tier 50 (MT50) – the biggest ASX mining companies outside the top 50 ASX companies (ASX50).
Lithium miner Pilbara Minerals jumped 28 places to eighth place on the MT50, with its market capitalisation enjoying a 656 per cent rise in the previous financial year.
Nickel and copper miner Chalice Mining rose 34 places to 11th place on the MT50, representing a 752 per cent increase in its market cap in the 12 months to June 30 2021.
Galaxy Resources’ market cap increased by 485 per cent to $1.856 billion at the end of the 2021 financial year (FY21), also catapulting the company up the MT50 ranks.
Other companies highlighted in the report include Lynas Rare Earths, Champion Iron, Nickel Mines and Orocobre, with their recent achievements translating to rising investor support.
PwC found that while the demand for battery minerals is booming, other minerals also enjoyed great growth in FY21.
The market value of iron ore companies increased by 178 per cent, reflective of the record price period in May.
However, since then, the price for 62 per cent Australian iron ore has experienced a new low, dropping beneath $US90 ($124) per tonne in November.
While gold companies continue to dominate the MT50, making up 36 per cent of companies and 33 per cent of overall value, in the 2020 Aussie Mine report, they made up 44 per cent of companies represented.
Critical minerals now make up 34 per cent of the MT50 and 31 per cent of overall value. Four coal companies remain in the MT50 – Yancoal, Whitehaven Coal, New Hope and Coronado Global Resources.
Only six of the mining companies in the MT50 experienced a decrease in market cap in FY21.
“In times of great uncertainty we often witness a flight to gold – and that was certainly the case in 2020 – but this year, critical minerals are catching up, reflecting changes in investor intentions on climate solutions,” PwC Australia national mining leader Debbie Smith said.
“The volatility of recent years across commodities is showing no signs of slowing down, with faster than expected declines to iron ore prices and further increases to coal and critical metals prices bearing on the Australian market since the end of our review period.”
PwC Australia partner Marc Upcroft expects the demand for critical minerals to continue rising, in line with the electrification and broader decarbonisation movement.
“Over the next decade, electric vehicle production will increase ten-fold, and charging infrastructure will need to grow by 30 times and installed renewable power will need to triple in capacity,” he said.
“Australia is poised to be a global leader in the new energy economy, due to its natural endowment of critical minerals such as lithium, nickel, copper, graphite, rare earths and cobalt – not to mention its track record and a credible and reliable exporter of commodities.”