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What’s in store

for the new decade?

The arrival of a new decade has price will ever again breach the $US100/t mark.”
brought plenty of reflections about Outcome: The Gold Index continues its upward trajectory to this
the 2010s and forecasts for the 2020s day but iron ore did breach that $US100/t mark.
throughout the mainstream and social 2016 on… specialty metals
media universe. For those in the re- Prediction: “It appears 2016 could be the year of non-traditional
sources sector, it has meant any num- metals with graphite, mineral sands and rare earths projects enjoying
ber of positive projections for the years good support. Partly this is due to growing demand for their appli-
ahead. I must admit to believing many of them. After perhaps the most cation in new technologies but also because demand and pricing in
eventful period in the industry’s history, there are signs the 2020s these products are so opaque. It takes great effort to find reliable price
could be a new start for mining companies, particularly juniors. information for many of these commodities and investors are more
However, before doing my Nostrodamus impression for a whole 10 likely to take a punt on companies in this space.”
years, I thought it wise to check how my previous new year predictions Outcome: The battery revolution was just beginning (although I
fared. Given this is also the 10th time I’ve been forced to make my forgot to mention lithium) but has subsequently faltered as developers
new year predictions public, it might be best I share them with readers struggle to convince financiers about the stability in their respective
before you make judgement on my guesses [estimates] for this year. markets.
In 2011 on… the skills shortage In 2017 on… a sense of optimism
Prediction: “If the bulls are right, Australia’s labour demands will Prediction: “There will, inevitably, be bumps during the course of
continue for at least the next decade and with an increasingly glo- 2017 and while the downturn of the last few years was largely a re-
balised world, those trained and groomed in Australia may be able sponse to the shifting supply/demand dynamics in commodities, it is
to move with their companies to foreign climes when the inevitable likely geopolitics will play a greater role in shaping prices and market
downturn in Australia does eventuate.” sentiment through the year.”
Outcome: Thousands of redundancies over the next five years as Outcome: Mining and metals were dominated by geopolitics, from
the construction boom ended and labour shifted to other industries, Trump and Brexit to Chinese emission standards and Indonesian
perhaps never to return. nickel export bans.
In 2012 on… ESG In 2018 on… the rebound holding
Prediction: “Ethical investment is a rising sub-sector of the invest- Prediction: “Following a number of false dawns over the last five
ment industry and if miners can show the benefits of their invest- years, the Australian mining industry enters 2018 with a fully-fledged
ment… this could prove another valuable source of funding. Tracking sense of optimism. Share prices are finally following commodity prices
corporate social responsibility performance of companies is no longer and moving upwards. Companies are becoming more emboldened
only for boutique investors.” by the depth of the rally; as evidenced by the number of junior com-
Outcome: The majors have come under increasing pressure to pany capital raisings and IPOs witnessed in the latter part of 2017.”
decarbonise from major shareholders. Outcome: The majors and mid-tiers enjoyed a good year but jun-
In 2013 on… red tape iors and IPOs found it much tougher going as geopolitical risk made
Prediction: “It is clear that regulation and red tape are looming as investors nervous and high-risk players chose to focus on other asset
a major problem for the resources industry in 2013 as companies who classes.
are desperate to push ahead with their business plans become frus- In 2019 on… gold’s return to avarice
trated by the regulatory labyrinth Australia has tied itself up in.” Prediction: “It is an indication of just how wrong the gold majors are
Outcome: More red tape and not just from governments but in- still getting their growth strategies. Bolting on assets such as Newmont
creasingly from the corporate regulators. is doing with Goldcorp does not necessarily solve the questions over
In 2014 on… green shoots where growth is coming from. The current growth issue for the majors
Prediction: “There is certainly a sense around the Perth-based stems from their attempts to satisfy disgruntled investors for the past
resources community that things may be about to improve in 2014. 7-8 years. Then, investors were demanding gold miners improve their
It may take another six or 12 months but hopefully those first green margins after frittering away the best gold price environment in history.
shoots are set to be joined by a wealth of others. Outcome: Too early to tell as Newmont Corp and Barrick Gold
Outcome: A terrible year for resources as the post-GFC stimulus Corp bed down their acquisitions. Rumours continue to swirl around
finally waned and metals demand fell off a cliff. Australia’s emerging mid-tiers with more M&A on the cards.
In 2015 on… gold’s rebound So, a mixed result for my soothsaying in the 2010s. Unfortunately,
Prediction: “The recent upturn in the gold price, particularly the I’ve run out of space to commit any of my predictions for the coming
Australian gold price, has been a boon for Australia’s gold producers decade to paper.
with the All Ordinaries Gold Index up 13.37% in the last 12 months
while in iron ore, the dominance of the Big Three – Rio Tinto Ltd, BHP
Billiton Ltd and Vale SA – is such that it is almost unthinkable the spot dominic@paydirt.com.au @DominicPiper

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