27 January What to expect in 2022 January 27, 2022 By AMPLA Admin General, Resources and Energy 0 Despite an unpredictable two years, the energy and resources sector has weathered tumultuous conditions and come through stronger. All signs indicate that 2022 and beyond will see strong growth in demand and exciting new developments. Despite an unpredictable two years, the energy and resources sector has weathered tumultuous conditions and come through stronger. All signs indicate that 2022 and beyond will see strong growth in demand and exciting new developments. Resources and Energy Quarterly has predicted that Australia’s resource and energy exports will increase from $310 billion to a new record of $379 billion in the financial year to June 2022. This will be driven by volume growth, a weak Australian dollar and high commodity prices. However, not all minerals will benefit equally. While iron ore prices are expected to decline, coal prices continue to surge as new markets are uncovered across Asia. Copper prices had a stellar year in 2021 reaching record highs of $14,979 per tonne driven by demand for clean energy technologies. But copper isn’t expected to reach record highs in the coming year, with prices impacted by increased production in China and easing of supply issues in Latin America. Growth in demand for copper is anticipated to continue as it’s an important metal in the development of electric vehicles. Another mineral expected to see increased prices is nickel but these may take five years to reach their peak. Over 2022 prices are expected to weaken as the market for nickel tightens. A key issue in the demand for nickel is the need to convert Class 2 nickel ore into Class 1 so that it can be used in the battery industry. Without this car producers will continue to search for alternative resources to produce components. One option to nickel is lithium which is expected to significantly increase production in the coming years. Exports are also expected to rise for lithium thanks to increased demand from the electric vehicle market. There is however still expected to be considerable change ahead that will continue to impact the growth and pricing in the industry. New extraction techniques could change the supply market for lithium, while demand will continue to accelerate as green industries accelerate. While gold experienced significant lows in 2021, with its first calendar year price decline since 2018, it’s expected to bounce back in the coming year. Some factors that are believed to have contributed to gold’s price in 2021 include a rising US dollar and the increase in cryptocurrencies. While it was a rocky year for the gold price, the trend was positive in the final few months and is expected to continue to rise as investors look for safe options amidst continued market volatility. We can expect to see demand for rare earth minerals to continue to grow throughout the next decade boosted by the demand for electric vehicles and decarbonisation technology. It’s anticipated demand for electric vehicles could grow by up to 40 times in the next 20 years which translates into an increase in demand for rare earth elements of up to 15 times. Australia is the third-largest rare earth oxide resource in the world and can expect to benefit from the impending boom. New projects like the Arafura Resources’ Nolans rare earth project are expected to be developed. Key to growth will be our ability to not just extract rare earth minerals but also to process them, with our largest competitor, China, currently seeking to dominate the market. According to the Australian Energy Market Operator (AEMO) the outlook for gas in Western Australia also looks solid with supply estimated to meet demand until the end of 2024. To ensure the market can continue to meet supply there is the opportunity to develop additional gas reserves in the state. This is based on gas demand increasing as the reliance on coal declines. Overall the signs look positive for the industry in 2022 and beyond. Challenges with decarbonisation and improving clean energy resources continue, and bring with them exciting opportunities to transform the sector. Related Articles What to expect from Brazil’s new government On October 30, Brazil elected Luis Inaclo Lula da Silva (Lula) to be its new President. Lula will take over from President Jair Bolsonaro on 1 January 2023. During his campaign, Lula hinted at some reforms that would potentially impact the energy and mining sector, particularly in relation to his environmental and climate agenda. What to expect from the new Australian government? In May, the Australian Labor Party (ALP) achieved a majority government while the Greens and independents hold the balance of power in the Senate. This signals a new era for Australia, with voters clearly putting climate change high on the agenda for the next three years. What the Federal budget and election mean for the sector The Federal election has now been set for May 21st and follows the recent 2022/23 Federal Budget announcement and Opposition’s reply. The Liberal party’s budget positions the energy and resources sector for growth with $2.4 billion allocated to the industry, energy and emissions reduction portfolio. The budget included an investment of $1.3 billion to maintain energy security and reduce the pressure on prices while encouraging emissions reduction. What the FIRB? An update on Australia’s foreign investment rules for energy and resources What law firms and in-house legal are doing to combat the threat of coronavirus The novel coronavirus (COVID-19) is drastically changing how we live, work and even play. For law firms and in-house legal practitioners, that means balancing the concerns of your clients with safeguarding your own staff. In some ways, small firms have an advantage over their larger counterparts. Moving to remote or online work is simpler with fewer moving parts to accommodate. On the other hand, it can be challenging to meet the increased needs of your clients at this anxious time. For in-house legal services, the size of the challenge becomes one of risk management for their organisation. But even those with strong governance and business continuity plans in place are struggling to manage many of the unprecedented issues they’re facing today. What is concerning mining and metals industry executives today? Recent surveys conducted in the mining and metals industry sector indicate that climate change, price volatility and the risk of a global depression are the top concerns for executives. The KMPG Mining Risk Forecast 2020/21 Report nominates climate change and price risks as top-of-mind for executives while a mid-year survey by White & Case found that the fear of a global recession was the most common concern amongst those surveyed. It’s worth noting that the KMPG survey was conducted before the COVID-19 pandemic. However, the concerns raised have ongoing relevance both now and into the future. Showing 0 Comment Comments are closed.