Battery metals could see a new commodity cycle that outlasts even the booms of old

Mining

5 hours ago | Josh Chiat

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Veteran stockbroker Eddie Rigg says the current resources upswing will last longer than previous booms as battery metals dominate the capital investment landscape.

Speaking at the RIU Resurgence Conference in Perth this week, the head of WA brokerage Argonaut said the current resources cycle could last for years.

Rigg’s comments came just after the ABS revealed Australian miners and explorers tipped a near record $982 million into exploration in the September quarter.

“We’re a great believer at Argonaut that this cycle is going to be far longer than previous cycles which can be a bit boom and bust,” he said.

Supply challenges, energy transition drive commodity prices

A cocktail of post-pandemic stimulus measures, supply disruptions, the increasing capital costs of making discoveries, approvals delays and need for battery metals for the energy transition were great for commodity prices, according to Rigg.

“Reasons for it and for reasons that I think most people accept is that Covid has caused a dampening on supply response,” he said.

“That’s a big thing, we can’t get people … the disruption in logistics.

“We’re also seeing that the approval process and all the various industry charges and challenges particularly in Australia after Juukan Gorge, trying to get things approved now, what might have taken six months will take two years or more.

“There’s also increasing sovereign risk around the world and of course orebodies are more commonly now blind so it takes a lot more to discover these orebodies.

“So we believe this cycle is a much elongated cycle and it’s great for everyone in this room.”

Rigg says “copper is king” and believes the investment booms driven by iron ore and coal in the 2000s and then by gold developments in recent years will give way in the next decade to capex on energy transition commodities.

“The first decade was really driven by iron and coal, the last 10 years was really driven by gold and our view is going forward there’s only one way to supply the materials which are required to now move to decarbonising this world we live in,” he said.

Electrification driving positive future for battery metals

The state of play outlined by Rigg has base metals miners and explorers’ tails up about the outlook for their sector.

While Rigg views copper as the commodity poised to benefit most from its role in the decarbonisation and electrification of everything including solar, wind, bioenergy, electricity transmission and EVs, metals like nickel, tin and lithium are also seeing their day in the sun