As it has emerged from pandemic lockdowns in mid-2020 and through 2021, China has increasingly struggled to meet its surging demand for primary aluminium with domestic production. The situation has come to a head with aluminium prices surging over the period. The primary ex-China index hit the US$3,000/t mark in intra-day trade recently and has been sitting around US$2,900/t. These prices have been dragged along by the high prices within China creating an arbitrage and the country becoming a vortex for available physical metal around the globe.

Global risks are seemingly mounting, with an energy crisis, inflation and China growth concerns at the forefront.

A growing imbalance between rising demand and stagnant or falling production is gradually pushing Southeast Asia towards becoming a net importer of crude oil and natural gas.

Mongolia’s metallurgical coal production skyrocketed in 2016 with output of 25.6Mt, rising more than 103% from the previous year. Since then, Mongolia has become an important player in the export market, benefitting from its close location to China that allows truck transportation. However, the country's production dropped to 19.5Mtpa last year, on the impact of the pandemic.

Hunter Valley Coalfield is located within the Sydney-Gunnedah Basin. Almost all major coal resources in NSW are located in the Sydney-Gunnedah Basin, which extends from the south of Wollongong to the north of Newcastle and is 500km and 150km wide. Coal measures of this basin are bituminous in rank and Permian in age. These vast measures contain a wide variety of coal, from high quality thermal coal to low volatile semi-hard coking coals. There are five major coalfields within the basin: Hunter, Newcastle, Southern, Western and Gunnedah.

China’s importance to the global LNG market can’t be understated. As the world’s second largest LNG importer, largest energy consumer and a rapid growth market, China is poised to take the place of the largest LNG importer from Japan this decade.

Several steel producers have already announced their plans for converting their BF operations to the less carbon intensive DRI/EAF technology. For the first half of 2021, many steel producers have been reporting record high revenues and operating EBITDA. The extraordinary financial results are driven by high steel prices, supply constraint issues and unprecedented government stimulus. With the growing rise of accounting for scope 1 and 2 carbon emissions, perhaps this windfall will accelerate growth in more DRI/EAF projects.

While demand for zinc does not show as much growth as demand for other metals, it remains steady. With many projects put on hold at the beginning of 2020 due to the pandemic and zinc prices falling, we are seeing projects being restarted with many due to come online within the next five years.

While the global demand for gold is expected to grow over the long term, the global mined supply is expected to peak in 2022 before steadily decreasing as ore grades decline and large mining projects reach the end of their lives. The price of gold is not expected to rise at the same rate as demand, so miners will be incentivised to find more efficient and cost-effective ways of extracting gold from this lower-grade ore.

China’s newest oil refiners are thriving by aligning themselves with President Xi Jinping’s environmental vision, expanding even as their older state-controlled rivals and several other private “Teapot 1.0” refineries have been reined in by Beijing. These newcomers, known as “Teapot 2.0”, are benefiting because they are fitting into Xi’s push for cleaner industries and greater energy efficiency.

Cities are electrifying public transport to tackle air pollution in densely populated urban areas and meet net-zero commitments. Around 10,500 global cities have adopted targets to reduce their greenhouse gas (GHG) emissions and 800 have committed to net-zero emissions.

DR pellet is essential for producing direct reduced iron (DRI) which is a highly pure form of iron, and is often used as a feedstock along with steel scrap to produce steel in the electric arc furnace (EAF). DR pellet has a typical Fe content above 66%, higher than is typical of blast furnace (BF) pellets.

Southeast Asia is home to significant bauxite reserves which have, until relatively recently, mostly been exported as raw ore to China as the country grew domestic refining capacity to meet its smelter capacity developments. China’s alumina refineries have increasingly looked to external sources of bauxite due to the restrictive processing costs of its domestic diasporic reserves. With significant bauxite reserves, prior to export bans, both Indonesia and Malaysia became significant suppliers on the seaborne bauxite market.

China, the world's largest copper producer and consumer, is continuing to bring new capacity online through new smelters, refineries and expansion projects. New supply additions are being supported by the surging demand from the traditional consumption sectors including power, manufacturing, and construction. Demand is also being driven by new and sustainable energy infrastructure development as the country aims to peak carbon dioxide emissions by 2030 and achieve carbon neutrality by 2060

In the years following the landmark Paris climate agreement, many countries have made progress in phasing out coal-fired power, but nowhere near as fast as the commitment to keep temperatures below 2C requires, and much of the progress has been offset by even larger planned expansion of the domestic thermal coal sector in China.

From a relatively insignificant finished nickel producer in 2014, to expecting to have overtaken China’s production volumes this year, Indonesia has been on quite the rise.

Global copper reserves are estimated at 870Mt of contained copper, according to the USGS. Chile has the largest copper reserves, accounting of 23% of the world’s total (200Mt). Peru is tied with Australia for second place, with reserves of 87Mt (10% of the total). Other countries with sizeable reserves include Russian (61Mt), the US (51Mt) and Indonesia (28Mt).

One of the fastest growing regions for steelmaking capacity is Southeast Asia. This expansion is being driven by the growing middle class, urbanisation, and government policies to enable domestic steelmakers to be less depended on steel imports. New steel projects in Malaysia, Philippines, and Indonesia are expected to be approximately 16.6Mt, 20.5Mt, and 27Mt, respectively.

Zinc’s uses are many given its effectiveness as a protective agent, whether as part of an alloy or as a passivating protection. Zinc is not used as a metal industrially, due to comparatively poorer physical properties than steel. However, once alloyed, zinc can add significant corrosion resistance, high impact strength at an affordable price.

Solid-state batteries have been touted as having higher energy density, shorter charging times and costing less than traditional lithium-ion batteries. Are they the answer to mass market adoption of electric vehicles?

Direct reduced iron (DRI) plants are expanding in the global steel industry. The accelerating movement towards reducing carbon emissions, and the increase in the capacity of DRI modules have renewed interest in the sector. In addition, hydrogen reduction as a production facility has been also attracted focus. The DRI production process has been introduced mainly in oil-producing countries. Now it is spreading to other regions who are looking to slash their carbon emissions.

Robust gold prices and the precious metal's assured role as a safe haven is encouraging miners to invest in their operations to halt output declines, extend mine life and grow production. AME expects gold demand to grow at a compound annual growth rate of 0.6% over the medium-term to 151,303koz by 2025. We expect mine gold supply to slide at a CAGR of 3.8% to 94,115koz over this period.

Europe is one of the smallest oil and gas producing continents in the world, only beating Oceania. While output in most European countries is now at a historic lows, exploration for new sources of both conventional and unconventional oil and gas is ongoing. The effort, however, is being increasingly hampered by the maturity of many of the conventional plays and producer country goals to become "climate neutral" in the coming decades.

The Canadian metallurgical coal market has significantly benefited since China slapped an unofficial ban on Australian coal exports in October 2020. Exports from Canada could partly fill Australian coal gap in Chinese demand as around 90% of Canadian exports have traditionally been sent to non-Chinese markets.

Surging aluminium demand is pulling the whole value chain along with it. As the centre of aluminium and alumina production, China is predominately the focus of capacity and production developments. However, China is struggling to meet its demand for bauxite—the raw material of the industry—from domestic resources.

As the energy transition gathers momentum, countries and corporates are racing ahead to announce net-zero pledges and decarbonisation targets. Countries with carbon neutrality pledges now account for 75% of LNG demand. The list includes some of Australia’s largest LNG customers—China, Japan and South Korea.

Greenhouse gas emission (GHG) associated with LNG have come under increased scrutiny from governments and market participants in recent years. Global LNG trade has more than tripled since the beginning of the century, while GHG emissions from LNG supply and end use had reached an estimated 1.25 Gt CO2-eq (~17% of emissions from natural gas) by 2020.

Carbon capture, utilisation and storage (CCUS) has become one of the major talking points in energy as countries around the globe struggle to reduce carbon dioxide (CO₂) emissions and fulfill commitments to reduce production of greenhouse gasses.

The US has a long history of manufacturing vehicles—dominating the sector for over 100 years—and its ambitions to become a major player in the nascent electric vehicle (EV) industry will see changes in the raw materials the country is trying to get its hands on.

Not all energy sources are created equal. Carbon costs are a looming problem for the environmentally conscious miner, and carbon emissions studies are still a relatively young science. The use of fossil fuels, mainstay of global economies for decades, is beginning to suffer from changing attitudes towards carbon emissions, climate change, and environmental pollution.

Lithium operations in South America and Australia are looking to ramp up supply over the medium-term to meet a massive uptick in demand for li-ion batteries as countries get serious about decarbonisation. AME expects lithium demand to grow at a massive compound annual growth rate of 24% through 2024, reaching 654,364kt.

The two main methods of steelmaking vary greatly in terms of carbon emissions. The typical blast furnace and/or basic oxygen furnace (BF-BOF) has a variety of raw materials such as iron ore, metallurgical coal, limestone and recycled steel. This method also includes the preparation of raw material in the likes of pelletisation and the sintering of iron ore. However, the majority of CO2 emissions in the steelmaking process is derived from the iron ore reduction process in the blast furnace.

Encouraged by thermal coal price growth, miners are reviewing expansion plans and raising capital for new projects and acquisitions. M&A activity is increasing, as are valuations and divestment.

China officially announced that its carbon dioxide emissions will peak by 2030 before striving to achieve carbon neutrality by 2060. According to statistics from the International Energy Agency, global energy-related carbon emissions in 2020 totalled 31.5Bt, with China holding the largest global share at 9.45Bt. China's steel carbon emissions account for more than 60% of global steel carbon emissions, and the steel industry's carbon emissions account for about 15% of the country's total emissions, according to the China Metallurgical Association.

Demand for copper is expected to keep rising over the coming years as the global economy electrifies and decarbonises. Miners are speeding up construction of their new copper projects, although they have continued to face coronavirus-related disruptions. After two consecutive years of declines, mainly due to the pandemic-related disruptions, particularly in South America, AME forecasts mined copper supply to grow 3.6% year on year to 21.15Mt in 2021 to and a further 7.3% in 2022 to 22.71Mt. Operations are expected to be less hindered by the pandemic, while new projects ramp up.

Investment in metallurgical coal mining projects is heavily focused on the world’s top five producers. These export-oriented developments comprise nearly 64Mtpa of coal mining capacity. These ventures have been approved and have obtained final investment decision or are already under construction, with the majority located in Australia and Russia.

The ‘Make in India’ initiative aims to grow India’s domestic capability in manufacturing for its 1.4 billion residents. For aluminium, that means self-sufficiency and vertical integration across the entire value chain from bauxite to finished products. A persistent issue inhibiting success is India’s challenges in trying to develop its large domestic bauxite reserves to secure the required raw materials—over 30Mtpa of additional bauxite supply capacity may be required if proposed projects are realised.

In the coming decades, the shifting demand for fossil-based transportation fuels will be the defining factor that will transform existing oil refining capacity. Future refineries will be equipped with flexible technology solutions that can enable them to make a wide variety of chemicals and intermediates.

Gold is trading at around US$1,800/oz, while nearly 10% lower than last year's spike to record levels fuelled by the pandemic, it is still well above the five-year average. Higher prices are encouraging investment and output, which has been sliding over the last few years. AME's base case of new projects coming online over the medium-term through 2025 includes 16 projects—with two each in Asia, Africa, Europe and Australia, and four in both North America and Latin America.

Qatar aims to be the world’s largest producer of LNG for at least the next two decades, capitalising on rising demand as the world transitions from oil and coal to cleaner energy. The world’s top LNG supplier, Qatar’s state owned Qatar Petroleum (QP), has committed to development of the first phase of its North Field LNG project expansion. The investment entails a four-train expansion with a total capacity of 32Mtpa named North Field East, that has been touted as the largest single LNG project sanctioned in history.

Steel prices have skyrocketed, and global crude steel production is forecast to increase 5.3% this year. The ramping up continues as steel demand from construction and automotive industries is gradually increasing. This significant rebound in the last few months has been mostly led by China, which currently accounts for more than half of the world’s output—which also makes it the largest metallurgical coal importer.

The main technological drivers that have to date been instrumental in lifting production for the world’s largest oil and gas producer, the US, are in the shale sector. Key advances include multiple and longer laterals, closer spaced, more hydraulic fracture stages, increased proppant injection volumes, automation and robotics have lifted well estimated ultimate recoveries (EURs). Adoption of multilateral technology has been a step change in unconventional reservoir development, combining the well construction capabilities of multilateral drilling with multistage hydraulic fracturing and commingled production.

While the US currently lags behind others in making clean energy technologies, President Biden has pledged to restore the country's manufacturing might. The Biden administration announced on June 8 that it was forming a task force to address bottlenecks and increase domestic production capacity for crucial goods, such as semiconductors.

The key end uses for copper are in construction (including building wire, plumbing, heating and air conditioning), electrical and electronic products (including power utilities), transportation, industrial machinery and equipment, and consumer and general products.

Aluminium is one of the most abundant metallic elements on Earth but is rarely found in its elemental form. Prior to 1886, the cost of producing aluminium metal was greater than that of gold and platinum, making it highly valuable. However, since 1886 when an American, Charles Hall and a Frenchman, Paul Heroult simultaneously discovered you could dissolve alumina in cryolite, apply a bit of electricity, and Bob’s your uncle— there's aluminium. The Hall-Heroult process has seen the cost, and therefore value of, aluminium fall off a comparative cliff. This process, combined with cheaper electric power transitioned aluminium from a precious metal to a comparatively inexpensive commodity.

Relations between China and Australia have soured following Canberra’s call last year for an inquiry into the origins of Covid-19 and Beijing’s imposition of tariffs on Australian coal, seafood, beef, wine and barley imports. However, China continues to import iron ore from Australia due to a lack of alternatives and disrupted supply from Brazil due to the pandemic and natural disasters.

Global export thermal coal supply is forecast to grow strongly by 3.9% in 2021 on increasing global power generation demand to support recovering economies. Despite the gathering global momentum from policy makers around emissions reductions, the June quarter reality was that global thermal coal-fired generation was increasing rapidly. As a consequence, thermal coal supply is on trend to exceed pre-COVID levels.

Gold miners are strengthening their sustainability goals amid intensifying pressure from governments, investors and the general public to act on climate change. Sharpening focus on the mining industry's ecological footprint has been building since the 2015 Paris Agreement, which aims to limit global warming by well below 2°C compared with pre-industrial levels.

Lithium demand is set to grow more than 40 times by 2040 if countries want to meet the goals of the Paris agreement. While electrifying transport and shifting to renewable energy systems is turbocharging demand and stoking prices, projected supply is estimated to meet only half of this need by 2030.

AME expects mined copper supply to grow 4.8% on-year in 2021 to 17,219kt and a further 6.8% in 2022 to 18,391kt. Indeed, even though mined copper production has continued to face coronavirus-related disruptions this year, particularly in South America, AME expects supply to grow. Operations will be less hindered by the pandemic, particularly in the second half of the year, while new mines and expansions ramp up.

Protectionist measures are anticipated to become an increasing theme in the short to medium term. Responding to the impact of the pandemic on world trade and political tensions flowing from actions by an assertive China, other countries are looking to secure domestic manufacturing capability and reduce dependence on the manufacturing behemoth.

The growing global distribution of safe and effective COVID-19 vaccines has altered the outlook for the global economy, and that for oil demand. Reflecting an upbeat general sentiment, AME forecasts a degree of stability in the global oil industry for the first time since COVID-19 began and while considerable uncertainties remain, the risks to growth are more balanced as acute downside risks ease and upside risks emerge.

China’s steel industry recovered quickly after the initial outbreak of the pandemic led to a 1.6% y-o-y slip in March 2020 to 79Mt. For the past 12 months, China's average monthly crude steel production has increased 9.5%, while the Rest of World (RoW) has decreased by 6.7%.

In the global energy industry, natural gas is considered the “bridge fuel” to a low-carbon future. Industry participants and some policymakers have touted the benefits of natural gas as a climate-friendly substitute for more carbon-intensive fuels, such as coal. However, this has been increasingly challenged, as the natural gas industry faces growing pressure from investors, regulators, and customers to do more to help meet climate change objectives and ESG goals.

Nickel production has always been relatively expensive. In all the excitement of the China commodity boom up to 2014, nickel projects suffered from very high capital intensities—the project capital cost divided by the nameplate contained nickel capacity.

Australia’s thermal coal industry and the national economy are closely bound. Australia is the fifth-largest coal producer and has the fourth largest reserves of coal in the world. The nation is the world’s second-biggest thermal coal exporter.

China's electric vehicle makers are looking to topple Tesla's dominance in the domestic market, which is expected to see exponential growth in the years ahead. The groups have used Shanghai's Auto Show, which opened on Apr. 19, to tout their latest offerings and technology to entice younger buyers. Indeed, surveys are suggesting that the country's under-35s are increasingly in favour of domestic brands.

The accelerating shift towards renewable energy will require huge quantities of copper as governments pledge to reach net zero emissions of greenhouse gases by 2050. This is particularly the case for wind energy, which is the most copper-intensive form of power generation and will consume the highest amount over the next decade in this sector. AME forecasts that copper demand will double by 2050 resulting in a 2.15% CAGR, the highest in the base metals class.

Increasing consumer interest in responsible and sustainable gold is pushing the world's top jewellers and watch makers to reassess their supply chains. Miners will continue to face increased scrutiny to improve their environmental, social, and governance credentials, particularly after a string of high-profile disasters.

Crude oil markets may have successfully rebounded from the shockwave of COVID-19, but a positive medium-term outlook for crude and products trade is far from secure.

Bauxites from Guinea and Brazil have a global reputation for their high quality and relative ease of processing. According to the USGS, Africa and the South America/Caribbean region comprise 53% of the global bauxite reserves. Guinea alone accounts for a quarter of the world’s reserves and has seen a dramatic increase in production in the past five years, making it the second largest producer behind Australia, and is expected to soon pass 100Mtpa. While the West African producers currently have very limited domestic refinery capacity compared with the South American/Caribbean region—with Rusal’s 640ktpa Fria refinery in Guinea the only operation—future refinery development is a potentially large value driver in the medium term.

It has been long while since Australia witnessed a new greenfield coal project moving on to become an operational mine. The last project to come online and ramp up to full production capacity was Qcoal’s Byerwen coal project back in 2018. This feature article will look at some of the major development projects in the pipeline that have the potential to become operational within the next few years.

There are numerous LNG projects expected to commence operations around the world in the coming years. These projects have been initiated to meet an anticipated strong demand for cleaner-burning fuel.

Tsingshan's announcement in March that it would supply Huayou Cobalt and CNGR Advanced Material with nickel matte has grabbed the attention of the nickel market and industry.

Japan is the second largest exporter of steel in the world; but its dominance is at the precipice of waning. The rise of China—the top exporter of steel since 2006—as well as industry concerns of excess capacity and increased protectionist measures have led to decreasing Japanese steel exports.

Increasing awareness and activity relating to greenhouse gas emissions has seen companies start to burnish their green/environmental responsibility credentials.

The most abundant element in the universe, hydrogen, is viewed as a tantalising substitute to natural gas and coal to help heavily polluting sectors such as aviation, steelmaking, and shipping de-carbonise. As an added bonus, some of the existing infrastructure in our carbon-dependent economy, from pipelines to refineries, can be retrofitted to hydrogen-based energy production.

China has emerged supreme in the race to manufacture the high-tech batteries that power electric cars and store renewable energy with 93 "gigafactories"—compared to only four in the US. If current trends continue, China could have 140 gigafactories by 2030, while Europe would have 17 and the US, just 10.

US refined copper demand is set to grow by 3% this year to 1.768Mt and rise a further 4.5% in 2022 to 1.847Mt as President Biden's US$1.9tn stimulus bill comes to fruition, powering further economic recovery in the world's biggest economy, coupled with the new administration's enthusiasm for the green revolution.

China’s car market staged a sparkling recovery in the second half of 2020, but this rebound set off a domino effect of chip shortages, panicking both suppliers and clients, and placing the supply chain, and its vulnerabilities, under a microscope.

Rio Tinto is headed for another cultural battle over Indigenous mining land after it was granted approval by the US government for a land swap in Arizona on grounds sacred to Native Americans.

Interest in hydrogen is mainly centred in two regions—China and the EU. China's interest stems from the country's desire to dominate global energy and technology markets. In the EU, government policy has taken centre stage thanks to the EU Hydrogen Strategy. Released last July, the plan calls for the installation of 6GW of renewable hydrogen electrolysers by the end of 2024, and at least 40GW by 2030.

An unprecedented shortage of liquefied natural gas tankers at the start of 2021 made these vessels the most expensive ships ever hired to transport commodities. Spot rates more than tripled in the past month, with BP Plc last month paying US$350,000 a day to charter an LNG tanker to pick up a cargo from the US.