of the century in many cases. Add to that the
trend of falling grades, and in the absence of
a major global economic downturn or China
collapse, projects will need to be advanced.”
Based on a KPMG report, the Australian
Financial Review has declared “the mining
boom is back”.
“he ive miners, BHP Billiton, Rio Tinto,
Fortescue, Newcrest Mining and South32,
reported a combined 13% increase in
revenue and a 426% increase in proits as
commodity prices and production picked
up,” it says.
“Rio Tinto was trading at its highest
price since September 2011 on Friday and
BHP regained its title from Commonwealth
Bank as the ASX’s largest stock by market
capitalisation last month as the sector
emerges from a diicult few years.”
Local cheerleader, he West Australian, is
riding the latest hot mineral hard, suggesting
the Wild West “is in the driver’s seat to
deliver technology that will power this
century”. Yep, it’s all about the lithium.
“Most electric cars use lithium-ion
batteries – the same technology that powers
smartphones, tablets and laptops – and WA
will soon be producing nearly half of the
world’ssupply,makingthisstatethelithium
capital of the world,” the paper says.
“he Pilbara will soon have the biggest
lithiumminingoperationsintheworldin
Pilbara Minerals’ $234million, 2 million
tonne a year Pilgangoora lithium-tantalum
project 120km south of Port Hedland.
Managing director Ken Brinsden believes the
company will be to the commodity what Rio
Tintoistoironore.”
Former colleague and long-term mine-
watcher Glenn Dyer has written a strong
piece inSharecafe.com.auto summarise BHP
breaking out the exploration drill bits thanks
to the electric car future.
He quotes BHP president of Americas
operations, Danny Malchuk: “We want
more copper resources in our portfolio and
webelievethemostvaluablepathwayto
achieving this is through exploration, the
drill-bit”.
Malchuk says BHP’s exploration portfolio
consists of 79 projects covering 1.8 millionhttp://www.miningmonthly.com December 2017 AMM 13MICHAEL PASCOEhectares, looking at discoveries in Ecuador,
Chile, Peru, the southwest of the US and
Australia.
“Not content with spending over $US
billion expanding its Spence mine in
northern Chile [by 50 years] and growing
output from the huge Olympic Dam mine in
South Australia, BHP is now devoting time
and money to inding a new mega mine,”
reports Dyer.
“BHP is already the world’s second-biggest
listed copper miner and it decided last year
to boost annual exploration spending by
29%, allocating nearly all its $US900 million
budget to new copper and oil deposits.
“BHP’s interest in copper comes as
demand for the metal emerges from a long
winter thanks to growing demand for electric
cars and renewables. hat sort of demand is
also goosing demand for nickel – another
major metal for the company from its WA
Nickel West operations.”
hankfully, along comes Glyn Lawcock
just when I’m starting to ind all the
optimismtoohardtohandle.
In anAFRinterview to mark his 20 years
as a mining analyst at UBS – a job that waspreceded by a spell as a time-and-motion
consultant at BHP and Rio Tinto – Lawcock
wondered how much more fabulously rich
BHP would be if it had just been content
with its massive core assets, rather than
charging of and paying top dollar for the
likes of Magma Copper and American shale
oil.
he AFR reported that, despite the lessons
of the past 20 years, Lawcock has no doubt
the big miners will eventually return to
mergers and acquisitions markets.
“For the next six months, the industry will
be very disciplined. he errors of the past
are still fresh in the minds of the current
management teams, so their desire to go
out and do big acquisitions and potentially
repeat the sins of the past are not there at the
moment,” Lawcock says.
“But the cycle will repeat itself. M&A will
come back. hey can’t help themselves. I talk
to management, and they say ‘It is diferent
this time’. And I say that’s what everyone said
in 1998 and 1999.”
Ah,Ifeelalittlebetternow–wecanstill
rely on management to stuf up. I think I’ll
go book some pre-Christmas drinks...+OCIKPGVJGGHsEKGPE[KH
%JTKUVOCUYCUHCEVQTGF
Image: iStock.com/ISergVJTQWIJQWVVJGYJQNG[GCT