Renewables Rejuvenating Mining Sector

By Glenn Dyer | More Articles by Glenn Dyer

Transitioning away from fossil fuels and towards renewables is breathing new life, new investment and new jobs into the NSW mining industry long dominated by coal.

Indeed, the influence of the growth in renewables is directly impacting investment patterns in the NSW mining sector and its reliance on coking and thermal coal production and exports.

The local industry has long been a poor third nationally behind WA and Queensland, but as the minerals exploration data from the Australian Bureau of Statistics each quarter confirm, metals are absorbing hundreds of millions of dollars more in mining company search budgets compared to coal, gas and oil.

For investors (ignoring the volatility on markets at the moment) the data from the Minerals Council underline the importance NSW has to have in trying to find new winners among smaller companies in the renewable metals space.

A report from the NSW Minerals Council has found that more than half the 35 projects in NSW in various stages of planning or approvals are for metals, while the long dominant coal sector’s ambitions continue to linger and at 17, the number of new projects or proposals in this sector hasn’t changed for several years.

The Minerals Council said this reflects “increasing global demand for gold, silver, copper, cobalt, zinc and other commodities needed for a range of applications, including for electronics, manufacturing, defence industries, and energy.”

The 35 new projects in the Council’s fourth annual review of potential mining projects in the pipeline for NSW is up from 28 in 2018, and 32 in both 2021 and 2022 – the growth is coming from proposed new metals projects which is a big change in coal dominated NSW mining.

They include a range of new projects as well as extensions to existing operations, with the potential to generate significant economic activity for NSW, according to the council with almost $13 billion in new investment being proposed.

The number of metals projects in the NSW planning pipeline continues to grow, increasing to 18 in 2022, up from the 13 listed in 2021 (and 11 projects in 2020), highlighting the strong ongoing interest in the metals sector in NSW, especially for key renewable metals like copper and cobalt, as well as PGE metals and silver, as well as gold.

Of the 18 projects, 15 are for new or renewable metals. All up, the 18 have a value exceeding $8.5 billion which is vastly more than the smaller value of the 17 coal projects at $4.6 million.

So far as jobs are concerned, the proposed metals projects could boost employment by 8,800 across the central and far west of NSW.

In contrast, the Minerals Council said the 17 new coal proposals could see 12,000 new or existing jobs protected in NSW which is a very different thing to the job gains from the metals projects which will create new jobs.

Companies like Newcrest (Cadia), Evolution (Cowal), Alkane (Tomingley), Glencore (Cobar, but continuing ownership uncertain) are the leaders in the metals sector. Glencore, BHP, Whitehaven and Yancoal are among the coal industry leaders.

But many of the new ideas and prospects are coming from smaller listed companies, especially in metals, like the emerging Bowdens silver, lead, zinc and now gold project near Mudgee in the central west owned by Silver Mines – it could be a billion dollar plus project.

Cobalt, PGE minerals and rare earths are also being found and proposals developed. Blue Cobalt is leading the charge near Broken Hill.

The range of potential metals and minerals projects is also broadening.

As noted in the NSW Government’s Critical Minerals and High Tech Metals Strategy, the Minerals Council says NSW is well placed to take advantage of the rapidly increasing global demand for new resources such as critical minerals, rare earths and high tech metals.

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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