There’s another resources boom underway — but unlike the last one, Chinese demand for iron ore is a lesser player: this boom is being driven by the surge in those minerals that make smart phones, and particularly electric vehicle (EV) and renewable energy power systems, work.
That in turn means nearly every other mineral mined in Western Australia is going through a surge in price, and so too are the values of the companies doing that mining.
We're talking about copper, lithium, aluminium, nickel and cobalt – the ‘CLANCs’. And to a lesser extent, the rare earths — lanthanum, cerium, neodymium and praseodymium (NdPr), plus 13 other lanthanide elements, and related substances such as scandium, yttrium and molybdenum.
Lithium prices, for example are up by between 70 per cent and 120 per cent from one year ago depending on the market (carbonate or hydroxide) and quality of the material.
Copper is up a more modest 10 per cent (about US$4 per pound) in the past 12 months but is double what it was in March 2020 – indeed, it was June 2011 when the metal was last trading at this price point.
Aluminium is a big mover. The industrial metal is at all-time highs of well over US$3000 per tonne, having risen from lows of less than US$1500/t in just April 2020, and up 60 per cent from March 2021.
In early February, Morgan Stanley predicted that by the end of the year the aluminium price would be at US$3500/t on the back of falling inventories and a rising cost curve. It breached that level on March 1 and hit US$3849/t two days later before falling back somewhat.
Cobalt is back in favour, too: after drawing significant interest through 2016-17, cobalt fell back to near its historical average in the low US$30,000s per tonne in 2019. Producers would be much happier with the US$79,000/t offered by today’s market.
Read the full story about “The new, new resources boom” in the Autumn edition of WA Works magazine, out soon.
