Sustainability, supply chain and geopolitical issues are making Australia an even more attractive proposition for investment in the mining and resources sector according to financial experts and investors preparing to discuss the impact of these interwoven challenges at the International Mining and Resources Conference (IMARC) in Sydney this November.
A major focus for investors right now is the mass-decarbonisation across the entire mining value chain, but global hurdles are slowing efforts and putting an emphasis back on cost-effective, quickly sourced energy forms to help nations struggling with power generation.
Queen’s Road Capital Investment CEO and director Warren Gilman said, “There’s no question that there’s a global trend towards decarbonisation but necessity often trumps trends like this and we’re seeing a short-term necessity for the re-investment in carbon-based energy forms around the world to fill what is hopefully a short-term requirement.”
A major reason for that requirement is Russia’s invasion of Ukraine, which is disrupting energy sources within Europe and beyond, with a flow-on effect reaching around the world.
Blayney Morgan, an energy and resources specialist and partner at SW Accountants and Advisors, said “Russia is of course a significant exporter of coal, but also an importer – mostly from Ukraine. When you stop the imports, and you stop the exports, the entire market gets affected.”
The impact of Russia’s actions has also highlighted the global susceptibility to reliance on foreign resources, which is forcing many countries to rethink the role of globalisation within their own economy. However, while domestic self sufficiency might seem like an attractive proposition, it is not necessarily an achievable prospect.
“There’s certainly a much greater awareness of the idea of the security of supply chains and domestic production due to the impacts of COVID, the invasion of Ukraine and the polarisation of global politics generally," Gilman said. "Countries have realised that you are putting your populace at heightened risk by not having a domestic supply chain and a domestic source of inputs, so there’s an increased realisation of that risk.
“But the incentive is just not there to prioritise domestic resource security and governments have had other priorities. They’ve been all about efficiency and cost reduction, not about security, so I’m not sure that’s going to change.”
And until domestic supply chains do become more of a priority in places like the United States, Australia is providing the best investment opportunity as a reliable, increasingly sustainable market with incredible opportunity for growth.
“Australia is top of the heap. It’s in a wonderful, wonderful position. Along with Canada the two countries are the best to invest in when it comes to mining,” said Gilman.
“There’s a rich history of mining, a significant part of the population that makes its living from mining and a mentality that responsible mining creates wealth and opportunity with minimal damage. As long as you’ve got that mindset, you’ve got an opportunity to develop those resources.”
Blayney Morgan agreed: “My personal view is that Australia is such an easy place to do business. You see it in project valuations, with the lower cost of capital. That’s because Australia has good infrastructure, the right legal system, well-trained people and it is the lucky country – because we have less development across our outback areas – which gives us the opportunity to find great deposits.”
IMARC is a forum where these rich investment opportunities can be explored with mining heavyweights and exciting newcomers to the industry.
“A key role of IMARC is to highlight challenges facing the sector, locally and globally, and provide a positive and productive forum where people can talk about them. Discussions started at IMARC often lead to positive solutions,” said Morgan.
IMARC has a dedicated three-day stream covering investment and financial issues facing the sector with over 120 mining companies exhibiting on the expo floor in the mining and investment hub.
A crucial event for any industry investor, IMARC is the only forum of its kind that uses enhanced and incredibly accurate networking technology to match delegates, allowing them to pinpoint new business and investment opportunities and start important conversations. Investors can attend the event for free by visiting imarcglobal.com