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The pandemic saw the mining sector accelerate growth in areas like digitalisation and automation. And though there were originally concerns about the sector’s resilience during a pandemic, Australia has proven itself as a reliable source of resources and place to do business globally.
Not only have exports increased, but there has been a rapid increase in local investment in resources projects, both through project acquisitions/farm-ins and raising of capital (including IPOs). Companies with a mining technology focus have been a particular target for mergers and acquisition activity, to help reduce inefficiencies, drive more seamless and sustainable supply chains and to combat the heavily felt labour shortage.
From speaking to many of the attendees, it wasn’t a matter of whether funds could be raised for projects, but how quickly they could get relevant supporting documentation in place to be “transaction ready”.
Federal government has also seen the sector as critical for national growth and stability. In 2021, they have extended the Junior Minerals Exploration Incentive to encourage investment and implemented the Modern Manufacturing Initiative (MMI), to assist in the funding and expansion of our local resource technology and critical minerals processing, and taking that knowledge to the world.
Triggered by ambitious emissions targets set at the Glasgow Climate Change Conference in November last year, the Federal and State governments are setting strong carbon reduction targets. Whilst carbon reduction is almost universally supported by the industry, the hard-line targets (as opposed to a reduction road map) are causing trepidation in terms of its practical application.
As outlined in the MMI, technology will play a key role in allowing companies to reduce their carbon footprint, however a hard-line approach to emissions provides practical concerns around the “shifting” of carbon production from one jurisdiction to another. For instance, local mining companies, rather than mining and producing on Australian shores, could transport raw materials overseas for production to meet local targets.
Although there are some practical issues with the carbon reduction laws as currently drafted, it’s promising to see the coming together of industry and government. This will ensure that we are best placed to practically combat the issue of carbon emissions in a manner that not only benefits the environment, but also our local economy and workforce.
Should you be in the process of undertaking a key transaction, whether it be buying, selling or raising funds, please get in touch to ensure you are ready from both a documentation and structuring perspective. Not being “transaction ready” can delay, and increase the costs of deals. We are here to help make the process a smooth and efficient one.
