The Office of the Chief Economists “Resources and Energy Quarterly” report provides “light reading” for those of us that like to nerd out and combine the due diligence, real data, exacting, educated and well-considered economic forecasting from the good people at the Department of Industry, Science, Energy and Resources with our own thumb sucking, crystal ball gazing, metals centric, take on the resources economy.
Exploration: Continues to grow for the 5th consecutive quarter with annual capital value invested exceeding $1billion. A quick check of the Department of Mines and Energy Tenement Register and you will see that there isn’t much of W.A left to peg after the recent “Polymetallic” rush. Interesting to note – while much of the recent tenement activity appears to focus on Battery Metals, $430M of capex was on Gold and 72% of that activity here in W.A.
Market Volatility: No matter the mineral or commodity, the conversations around volatility in pricing, production, consumption, investment etc invariably focus on Covid 19, Energy, Skilled Labour, the Chinese Government & Economy. If we have learnt anything from the “Supercycle” of the early 2000’s it is to never underestimate the Dragon Economy particularly when it comes to long term strategy. Whilst the reported commentary seems to flex from Bull to Bear perspective on a daily basis it pays to remember you don’t check the price of your house every day. For what it’s worth, this Lil rock kicker predicts a strong and steady 2022 for precious, base and battery metals.