Powering the future with Australian Lithium, Copper, Cobalt

I came across these charts below that show the top ten critical mineral powerhouses of the energy transition. Check out Australia. Not number one but we have significant reserves. We also have the advantage of being reliable, low cost producers with stable governance, excellent infrastructure and stringent environmental and workplace regulation.

I'm showing these charts and some larger companies on the ASX that provide exposure to these minerals. Remember to do your own research and don't buy a stock just because of the story. These minerals are commodities and can fluctuate wildly in price. In this episode of the podcast, Mathew Hodge from Morningstar Australia explains some of the intricacies of the resources sector. He makes the point that copper is easily recycled. This may have an effect on future demand.

There are many ETFs that provide exposure to these minerals, internationally as well as in Australia. Here's an interview with Cameron Gleeson from Betashares about XMET, an ETF that aims to track the performance of an index (before fees and expenses) that provides exposure to a portfolio of global companies in the Energy Transition Metals (‘ETMs’) industry.

You may also be interested in this interview with Jordan Eliseo who was then working at Perth Mint. He's a gold kindaguy but his views on commodities make for interesting listening.

Lithium: Powering the Green Revolution

• Rio Tinto Ltd (ASX: RIO): The iron ore giant is buying up land in Western Australia's lithium zone and has a market capitalisation of $44.46 billion .
• Mineral Resources Ltd (ASX: MIN): The diversified mining services and commodities producer has lithium projects in Western Australia and a market capitalisation of $11.62 billion.
• Pilbara Minerals Ltd (ASX: PLS): The leading pure-play lithium company owns 100% of the world’s largest, independent hard-rock lithium operation, the Pilgangoora mine, and has a market capitalisation of $8.48 billion .
• Allkem Ltd (ASX: AKE): A leading producer of lithium hydroxide and carbonate, with operations in Australia, Chile, Argentina and China. Allkem has a market capitalisation of $8.21 billion and produced 82,000 tonnes of lithium products in 2022

Copper: The Backbone of Modern Infrastructure

• BHP (ASX: BHP): Global copper producer with mines in Australia, Chile and the US. Market cap of AU$217.89 billion.
• Sandfire Resources (ASX: SFR): Copper miner with operations in Spain, Western Australia and Botswana. Market cap of AU$2.87 billion.
• Develop Global (ASX: DVG): Copper explorer with projects in Zambia and Botswana. Market cap of AU$1.14 billion.
• 29Metals (ASX: 29M): Copper producer with mines in Queensland and Chile. Market cap of AU$1.09 billion.
• Aeris Resources (ASX: AIS): Copper miner with operations in New South Wales and Queensland. Market cap of AU$0.43 billion.

Cobalt: Essential for Battery Technology

• Jervois Global (ASX: JRV): Market cap of AU$154.04 million, focused on producing battery minerals, especially cobalt [1].
• Cobalt Blue Holdings (ASX: COB): Market cap of AU$136.92 million, focused solely on cobalt and its potential in the renewable energy market [1].
• Ardea Resources (ASX: ARL): Market cap of AU$122.64 million, developing the Goongarrie Nickel Cobalt Project in Western Australia [1].
• Kuniko Metals (ASX: KNI): Market cap of AU$107.24 million, exploring for cobalt, copper and nickel in the Kuniko Complex in Norway [2].
• Aeon Metals (ASX: AML): Market cap of AU$20.83 million, advancing the Walford Creek Copper-Cobalt Project in Queensland [2].

Australia is generally known for having stringent health, safety, and environmental regulations in its mining industry compared to some countries. Here's a closer look at why Australia often stands out in this regard:

1. Health and Safety Regulations:

• Stringent Standards: Australia has robust safety standards and regulations for mining operations. These standards are designed to ensure the safety of workers, minimize accidents, and prevent harm to the environment.
• Enforcement: Australian authorities rigorously enforce these regulations, and mining companies are held accountable for maintaining safe working conditions. Regular inspections and audits are conducted to ensure compliance.
• Worker Protection: Australian mining companies prioritize the safety and well-being of their employees, providing extensive training, safety equipment, and health services.

2. Environmental Regulations:

• Environmental Protection Laws: Australia has a comprehensive framework of environmental protection laws that govern mining activities. These laws cover aspects like land rehabilitation, water management, and air quality control.
• Environmental Impact Assessments (EIAs): Before mining projects are approved, they must undergo rigorous EIAs to evaluate their potential environmental impacts. Companies are required to implement mitigation measures to minimize harm to ecosystems.
• Land Rehabilitation: Mining companies in Australia are obliged to rehabilitate disturbed land areas once mining operations cease. This includes re-vegetation and ensuring that the land returns to a state as close to its original condition as possible.

Any advice in this blog post is general financial advice only and does not take into account your objectives, financial situation or needs. Because of that, you should consider if the advice is appropriate to you and your needs before acting on the information. If you do choose to buy a financial product read the PDS and TMD and obtain appropriate financial advice tailored to your needs. Finpods Pty Ltd & Philip Muscatello are authorised representatives of MoneySherpa Pty Ltd which holds financial services licence 451289. Here's a link to our Financial Services Guide.