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Australia’s 5 Most Valuable Mineral Exports

One of the richest nation’s on Earth, Australia’s economy is built on mineral resources. Here’s a look at the country’s five most valuable mineral exports.
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Australia’s economy is largely based on its natural resources, with the minerals sector making the greatest contribution to the nation’s exports.

Four of Australia’s states and territories rank in the top 20 mining jurisdictions in the world, according to the Fraser Institute’s latest annual survey of mining companies: Western Australia (fourth), Southern Australia (seventh), Queensland (16th) and the Northern Territory (19th).

These mining jurisdictions demonstrate a high level of investment attractiveness mainly due to their mineral-rich geology, solid infrastructure, stellar economic environment and government support for the resources industry at both the federal and state level.


 

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In the 2018/2019 period, Australia’s minerals exports grew by 26.4 percent over the previous period. Here are the top five most valuable mineral resources exports for the Australian economy; combined they brought in nearly half of Australia’s AU$470 billion worth of exports in the 2018/2019 financial year, as per the most recent data from the Department of Foreign Affairs and Trade (DFAT).

1. Iron ore

Australia is the king of the iron game. US Geological Survey (USGS) information shows it accounted for some 37 percent of global iron production in 2020, well ahead of Brazil in second place. The nation also ranks as the world’s largest exporter of iron ore.

Iron is the definitive base metal, and is used in everything from infrastructure to transportation to advanced technology — meaning Australia and its many iron ore mines in Western Australia have enjoyed a mighty run of economic prosperity as China has leaned into its push for industrialization.

DFAT’s data from 2018/2019 shows that iron ore accounted for over 16 percent of Australia’s total exports in that period, with a value of more than AU$77 billion.

2. Coal

While more western nations around the world are turning away from coal, in Australia the sooty black rock is a source of incredible wealth.

Australia hosts coal deposits across the country, with major operational mines up and down the east coast, including the controversial Carmichael mine in Queensland, which is being developed by India’s Adani Group (BSE:512599,NSE:ADANIENT).

 

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For its part, coal makes up another 15 percent of Australia’s total exports at AU$69.5 billion, with most of it again going to China despite increasingly strict environmental standards. However, simmering political tensions between the two trading partners resulted in China effectively banning Australian coal imports in 2020. And yet, Australia has plenty of other customers as well.

3. Gas

Natural gas is Australia’s third most valuable resource export, earning more than AU$49 billion for the economy with its 10.5 percent share of total exports.

The island continent is home to 14 different basins that yield natural gas. The country has significant natural gas reserves, with much of it locked up in coal seams that require unconventional drilling.

Most of Australia’s natural gas production occurs offshore in the northwest, which has seen an increase in large development projects over the past few years by some of the biggest names in natural gas.

4. Gold

Gold accounted for nearly AU$19 billion in exports in the 2018/2019 financial year in Australia, earning its place as the fourth most valuable mineral export and sixth most valuable export overall.

According to the USGS, Australia produced 320 tonnes of the yellow metal in 2020, making it the second largest gold-producing nation, behind China and ahead of Russia.

Much of Australia’s wealth is founded on gold, with a number of gold rushes triggered in the mid-1800s that supercharged the nation’s development and set it down its path of prosperity through mining. Today most of the top-producing gold mines in the country are located in Western Australia.

 

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5. Aluminium ore

Aluminium ore comes in as the fifth most valuable mineral export from Australia, accounting for 2.3 percent of all exports and earning AU$11.4 billion in 2018/2019. Aluminium is sourced from bauxite, of which Australia has the second largest share of resources in the world.

Aluminium ore is produced from mines in Queensland, New South Wales, the Northern Territory, Western Australia and Victoria. Refined aluminium metal earned its own spot in DFAT’s list of valuable exports for the country at 16th. Australia’s refined aluminium industry has been struggling under the weight of heavy energy costs associated with smelter operations for a number of years now.

“Australia is one of the world’s most emissions-intensive aluminium producers,” reports the Institute for Energy Economics and Financial Analysis. Renewable energy sources may be the answer to saving the country’s aluminium sector.

And the rest

While the five resources above represent the most valuable mineral exports to the Australian economy, the country sits on significant reserves of almost every mineral you can find on the planet. Other major commodities of significant value to the Australian economy are oil, which is the sixth most valuable resource and ninth most valuable export overall, and copper ores and concentrates, which are the seventh most valuable mineral export and 10th overall.

Wondering where uranium and rare earths are on this list? Despite having 30 percent of the world’s reserves, uranium didn’t rate a mention in exports as its three operational mines only produced 6,613 tonnes of uranium in 2019. And while Australia also ranks as the fourth largest producer of rare earths globally, rare earths production did not rate as a major contributor to the Australian economy.

This is an updated version of an article first published by the Investing News Network in 2019.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

 

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Stocks

VIDEO — Frank Holmes: Bullish on Gold, “Perfect Storm of Inflation” Ahead

"I think it’s quite easy this year (for gold) to take out last year’s high. It’s very easy to do that," said Frank Holmes of US Global Investors.
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The gold price reached a new all-time high nearly 12 months ago, and as the summer months set in again investors are wondering whether it may do the same thing this year. 

Speaking to the Investing News Network, Frank Holmes, CEO and chief investment officer of US Global Investors (NASDAQ:GROW), said he thinks it’s possible for the yellow metal to set a new record in 2021.

“I think it’s quite easy this year to take out last year’s high. It’s very easy to do that,” he said.

 

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“And once people start believing that the Consumer Price Index (CPI) number is (an) inaccurate forecast of inflation — that there have to be other factors, which has happened in previous cycles — then all of a sudden gold will get a brand new element to it.”

Holmes explained that the CPI is understated because it doesn’t track food and energy. In his view, rising inflation is “baked in” for the next couple of years given the amount of pent-up demand related to COVID-19, as well as continued money-printing efforts around the world.

The US Federal Reserve remains seemingly unconcerned about inflation, and has repeatedly described inflationary activity as “transitory.” When asked if he expects any meaningful changes at this week’s Fed meeting, which runs from Tuesday (June 15) to Wednesday (June 16), Homes said he does not.

“I don’t see any changes. The stock market is acting still pretty resilient,” he explained. “I think it’s full throttle of printing money around the world — we’re talking about trillions and trillions of dollars. And you still have this pent-up demand, so therefore you’re going to have the perfect storm of inflation, and if you can borrow inexpensively you’ll be ahead of the curve.”

Holme also has a positive outlook on bitcoin, and he noted that enthusiasm and acceptance for the cryptocurrency are on the rise. However, he still believes investors should allocate a larger amount of their portfolios to the yellow metal, which he views as more stable.

“(Bitcoin is) very volatile; it’s much more volatile than gold — it’s six times more volatile. So I’d advocate 10 percent into gold and gold-related quality stocks and 2 percent into crypto.”

Watch the interview above for more from Holmes on gold and bitcoin, as well as the potential he sees for the US Global Jets ETF (ARCA:JETS).

Don’t forget to follow us @INN_Resource for real-time updates! 

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

 

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Stocks

10 Top Copper-producing Companies

Codelco is in first place, and it’s followed by Glencore and BHP. Read on to find out the rest of the top copper-producing companies.
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Copper prices have made moves in 2021, rallying to record-high levels on expected demand growth amid a supply deficit.

While construction and electrical grids have long been big markets for copper, today the rise in demand for electric vehicles, electric vehicle charging infrastructure and energy storage applications are considered some of the biggest drivers of copper consumption.

CIBC analysts have forecast that copper prices will rise to US$5.25 per pound in Q4 2021 and into the first quarter of 2022. Prices are expected to average US$4.62 in 2021 and US$4.75 in 2022.

 

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Given those factors, investors may want to keep an eye on the world’s top copper-producing companies. According to the latest stats from financial market data provider Refinitiv, the following top copper-producing companies produced the most copper in 2020.

1. Codelco

Production: 1.76 million tonnes

The first top copper-producing company on the list is state-owned Codelco. As the world’s biggest copper producer, the company put out 1.76 million tonnes in 2020. Although there were concerns early in the year that operation curtailments due to the coronavirus pandemic would knock Codelco from its top spot, the Chilean company defied those expectations to meet its production guidance for the year.

In May 2021, Codelco announced the start of a US$1.4 billion project aimed at extending the life of its Salvador mine through 2068 by converting the underground mine to an open-pit operation. The project is a part of the company’s 10 year, US$40 billion plan to upgrade its many aging mines.

2. Glencore (LSE:GLEN,OTC Pink:GLCNF)

Production: 1.26 million tonnes

Major diversified miner Glencore produced 1.26 million tonnes of copper in 2020. After suffering an 11 percent drop in copper production for the first half of the year versus the same period in 2019, the company cut its annual production guidance for the full year to 1.23 million tonnes.

Rather than COVID-19 disruptions, Glencore attributed its production decline to its Mutanda mine being placed on care and maintenance in 2019. Operations at Mutanda, the world’s biggest cobalt mine, are set to resume sometime in 2022. In addition to cobalt, the mine has five copper production lines.

3. BHP (ASX:BHP,NYSE:BHP,LSE:BHP)

Production: 1.21 million tonnes

In 2020, BHP produced 1.21 million tonnes of the red metal. The Australian mining giant managed to keep its copper production numbers high despite the year’s COVID-19 disruptions and strikes at Escondida, the world’s largest copper mine.

Labor strife has continued for BHP into 2021 at the Escondida and Spence copper mines in Chile, although the company claims the current strikes have not impacted production.

 

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4. Freeport-McMoRan (NYSE:FCX)

Production: 1.08 million tonnes

Freeport-McMoRan recorded 1.08 million tonnes of copper production for 2020. Despite coronavirus-related production setbacks, strong copper prices helped to buoy profits for the company.

One of the company’s biggest copper assets is the Grasberg mine in Indonesia, the 10th largest copper mine in the world. The company continues to make significant investments in Grasberg to increase both its copper and its gold production.

5. Grupo Mexico

Production: 975,898 tonnes

Grupo Mexico’s mining division is the largest copper producer in the country. 2020 marked a year of record copper production for the company despite the global coronavirus crisis.

On its website, Grupo Mexico says expansion work at its Buenavista del Cobre mine in Mexico and Toquepala mine in Peru will make the company the world’s third largest copper producer.

6. First Quantum Minerals (TSX:FM,OTC Pink:FQVLF)

Production: 715,762 tonnes

Canada’s First Quantum Minerals produced more than 715,000 tonnes of copper in 2020. The company was able to increase its production guidance for the year despite temporary coronavirus shutdowns at its Cobre Panama mining operation.

In 2021, output is expected to be strong from Cobre Panama, as well as First Quantum’s other two key copper mines, Kansanshi and Sentinel in Zambia.

7. Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO)

Production: 548,074 tonnes

Rio Tinto’s copper production in 2020 totaled 548,074 tonnes. The company is one of the largest diversified mining companies in the world behind BHP — and like BHP, Rio Tinto was also negatively impacted by strikes at Chile’s Escondida mine. Rio Tinto holds a 30 percent interest in the project.

 

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8. KGHM Polska Miedz (FWB:KGHA.F)

Production: 543,672 tonnes

Poland’s KGHM Polska Miedz has operations in Europe, North America and South America, and says that it holds over 38 million tonnes of copper ore resources worldwide. In 2020, the company produced more than 543,000 tonnes of copper.

KGHM recently announced it’s cutting a few small assets from its portfolio, including the Carlotta copper mine in the US. In the first quarter of 2021, the company achieved its best operating and financial results in nearly a decade.

9. Antofagasta (LSE:ANTO,OTC Pink:ANFGF)

Production: 503,577.6 tonnes

Chilean copper miner Antofagasta operates four mines in Chile and produced more than 503,000 tonnes of copper in 2020. The company’s output was impacted by having to place its flagship Los Pelambres mine on care and maintenance, as well as by lower grades at its Antucoya operations.

Antofagasta recently pledged to cut its carbon emissions by 30 percent by 2025 by using renewable energy sources. By the end of 2020, the company reported that it was already powering 19 percent of its operations with renewable sources.

10. Norilsk Nickel (FWB:NNIC)

Production: 456,240 tonnes

Russia’s Norilsk Nickel produced more than 456,000 tonnes of copper in 2020. The company is also the world’s largest producer of nickel and palladium.

Moving forward, by 2030 Norilsk Nickel is looking to increase its copper production by 20 percent from its current level. The company is upgrading its production capacity at the Ruchey copper-nickel mine, replacing its obsolete Kola copper refinery with a state-of-the-art plant.

This is an updated version of an article originally published by the Investing News Network in 2016.

Don’t forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

 

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Biden Administration Moving Forward With Trump-Era Proposal For US Uranium Reserve

Biden Administration Moving Forward With Trump-Era Proposal For US Uranium Reserve

The Biden administration is taking steps to establish a US uranium reserve, a proposal put forward by the Trump administration which could boost mining of…

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Biden Administration Moving Forward With Trump-Era Proposal For US Uranium Reserve

The Biden administration is taking steps to establish a US uranium reserve, a proposal put forward by the Trump administration which could boost mining of the mineral as well as the potential to expand nuclear energy in the United States.

"Yellowcake" uranium coming off a conveyor line

In Tuesday testimony before the Senate Energy and Natural Resources Committee, Energy Secretary Jennifer Granholm said that her department is laying the groundwork for such a move.

"We’re about to issue a request for information [RFI] regarding establishing a reserve," she said, adding "We are, I think this month, issuing an RFI on that."

Jennifer Granholm

In a major funding bill passed late last year, Congress set aside funds to establish the strategic reserve, which would buy US-mined uranium from domestic producers, which we assume is separate from the US reserves bought by Russia during Hillary Clinton's Uranium One scandal.

When asked why the Biden administration's budget request for 2022 didn't include funding for the reserve, Granholm cited the existing funding for the project.

"It had been appropriated for last year so it’s carrying over," she said.

A 2020 Trump administration report endorsed spending millions on the reserve, which would aim to boost domestic mining.

The concept is similar to that of the already existing strategic petroleum reserve, where the government can hold up to 714 million barrels of that fuel in case of an emergency.  -The Hill

Zero Hedge readers will recall our coverage on the uranium sector, which we said in April was set to benefit from several factors - including upcoming infrastructure spending, the reddit short squeeze crowd, an extremely bullish case laid out by a BofA analyst, and a passionate tweetstorm by former hedge fund manager Hugh Hendry, who said "A lot of you are invested in uranium. I commend you. I wish I was. Uranium is the rockstar of commodities. It doesn't mess around - bull and bear markets are of epic proportions."

Furthermore, Michael "big short" Burry advocated for converting US to nuclear power as a way for Democrats to create jobs in a 'green' industry.

Related stocks moved higher on the news.

And to review what we said in April:

The first reason is a mix of regulatory and market developments.

As we reported earlier today, the spot price for U3O8 moved above $30 per pound for the first time this year as uranium producers and mine developers hoovered up above-ground inventories and reactor construction continues apace. Two new research notes from BMO Capital Markets and Morgan Stanley say today’s price marks a floor and predict a rally in prices over the next few years to the ~$50 level by 2024, which - all else equal - would translate into soaring stock prices for names such as CCJ, UEC, URA and URNM.

Indeed, as Mining.com said, the stars seem to be aligning for a new phase of nuclear energy investment with the US, China and Europe bolstering the bull case for the fuel this month.

And while nuclear energy was not (yet) mentioned explicitly in the $2 trillion Biden infrastructure proposal released today, its federally mandated “energy efficiency and clean electricity standard” is hardly achievable without it. 

Curiously, the big regulatory move may be coming out of Europe, where - as we expected - Uranium is now officially part of the cool ESG crowd as over the weekend leaked documents showed a panel of experts advising the EU is set to designate nuclear as a sustainable source of electricity which opens the door for new investment under the continent’s ambitious green energy program.

Then there is China - as Mining.com notes, China’s 14th five-year plan released a fortnight ago also buoyed the uranium market with Beijing planning to up the country’s nuclear energy capacity by 46% – from 48GW in 2020 to 70GW by 2025. There are several factors working in uranium’s favor, not least the fact that annual uranium demand is now above the level that existed before the 2011 Fukushima disaster when Japan shut off all its reactors:

  • Uranium miners, developers and investment funds like Yellow Cake (13m lbs inventory build up so far) are buying material on the spot market bringing to more normal levels government and utility inventories built up over the last decade

  • Major mines are idled including Cameco’s Cigar Lake (due to covid-19) which accounts for 18m lbs or 13% of annual mine supply.  The world’s largest uranium operation McArthur River was suspended in July 2018 taking 25m lbs off the market

  • Permanent closures so far this year include Rio Tinto’s Ranger operation in Australia (3m lbs) and Niger’s Cominak mine (2.6m lbs) which had been in operation since 1978. Rio is exiting the market entirely following the sale of Rössing Uranium in Namibia

  • Like Cameco, top producer Kazatomprom, which mined 15% less material last year due to covid restrictions has committed to below capacity production (–20% for the state-owned Kazakh miner) for the foreseeable future

  • Price reporting agency and research company UxC estimates that utilities’ uncovered requirements would balloon to some 500m lbs by 2026 and 1.4 billion lbs by 2035  

  • Roughly 390m lbs are already locked up in the long term market while 815m lbs have been consumed in reactors over the last five years, according to UxC

  • There are 444 nuclear reactors in operation worldwide and another 50 under construction – 2 new connections to the grid and one construction start so far in  2021

  • Much cheaper and safer, small modular nuclear power reactors which can readily slot into brownfield sites like decommissioned coal-fired plants (or even underground or underwater) are expected to become a significant source of additional demand.

The last bullet brings us to reason number 2: the coming "small modular reactor" frenzy:

As Nikkei Asia reports today, one of Japan's top industrial engineering companies will join a US-led project to build a new type of nuclear power plant designed with added precautions against meltdowns. These plants will be built in the US, where they will propel the uranium sector to level it hasn't seen in decades (indicatively CCJ traded roughly double where it is today as just before the 2008 financial crisis).

According to the Nikkei, Japan's JGC Holdings will help build a plant in the state of Idaho designed by NuScale Power, an American company whose proposal for a small modular reactor (SMR) involves immersing the containment units in a pool of water.

Small nuclear reactors have been hailed as an option for replacing fossil fuel power plants as nations commit to cutting carbon dioxide emissions in the coming decade

And here, we get one step closer to Uranium becoming part of ESG: when Joe Biden meets Japanese Prime Minister Yoshihide Suga for a summit in the U.S. later this month, fighting climate change will be on the agenda and "small nuclear" - and uranium - will be high on the agenda.

JGC has invested $40 million for a roughly 3% stake in NuScale, one player in the emerging field of SMRs. The Japanese group will work with NuScale's parent, U.S.-based engineering company Fluor, on construction management and other aspects of the Idaho project.

One thing is clear: as the SMR strategy takes off, much more uranium will be needed, as the partners eventually could set their sights on similar projects in the Middle East - where JGC boasts a long track record in oil and petrochemical infrastructure - and Southeast Asia. In fact, the entire world could soon be covered in small, safe nukes which will lead to an unprecedented renaissance for the uranium sector.

Why the scramble for SMR?

The first reason is simple: price. Nuclear plants on the scale of 1,000 megawatts cost around $10 billion to build using established reactor designs. NuScale's SMR design - which completed a technical review by the U.S. Nuclear Regulatory Commission in August 2020, ahead of rival proposals - reportedly costs around $3 billion for more than 900 MW. The Idaho plant will have a capacity between 600 MW and more than 700 MW, according to announced plans. NuScale also has a strategic partnership with South Korea's Doosan Heavy Industries and Construction, which will supply components for the plant.

The second, and far more important reason, is safety. Japan's Fukushima nuclear disaster a decade ago shows what happens when reactor cooling systems break down. The loss of emergency power after a devastating 2011 tsunami led to reactor meltdowns at the Fukushima Daiichi plant operated by Tokyo Electric Power Co. Holdings. Well, NuScale's SMR design seeks to remove this risk, as the water in the pool takes a month to evaporate and helps keep the reactor's temperature down.

The U.S. government supports research and development in small-scale reactors. A Green Growth Strategy announced by Japan last year calls for "providing active support" to Japanese companies participating in experimental overseas projects in this field. Many existing nuclear plants in Japan, the U.S. and other advanced economies have been in operation for decades and require upgrades or decommissioning.

In short, between recent bullish market dynamics, and a sector that is on the cusp of becoming the next ESG craze, the promise of new SMR technologies could ensure uranium demand is stable for decades, leading to a new golden age for uranium stocks.

Tyler Durden Tue, 06/15/2021 - 14:15

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