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1、Aussie Mine 2023Critical choicesPwC|Aussie Mine 2023PwC|Aussie Mine 2023In Aussie Mine 2022 we urged Australia to think differently and act now.Its 2023-its become more critical.Welcome to the 18th edition of Aussie Mine:Critical choices.Aussie Mine provides industry and financial analysis on Austra

2、lias mid-tier 50 mining companies(MT50),highlighting the opportunities and challenges ahead.The list of companies in this years MT50 is on page 25 and 26.Critical choices:Australias critical minerals opportunityAustralia has the chance to generate more than$170bn in gross domestic product(GDP)and cr

3、eate almost 330,000 jobs by 2040 if we capitalise on our first-class endowment of critical minerals and other energy transition minerals.1 But well only get this benefit if we make some critical choices around critical minerals and fast.In Aussie Mine 2022 we urged Australia to think differently and

4、 act now.Its 2023-its become more critical.First and foremost,we need to get moving to meet global decarbonisation goals.Low emissions technologies are mineral intensive,and so demand for electric vehicles(EVs),wind turbines,solar panels,batteries,hydrogen electrolysers and electricity transmission

5、will dramatically increase demand for critical minerals.Fortunately,Australias mining companies are in the right shape financially to play their role in developing new projects.As this years Aussie Mine report shows,earnings have reached a new record level,while existing financing and supportive mar

6、kets will also help fund the needed investment.Mixed short-term signalsShort-term economic uncertainty continues,as do geopolitical risks,and both present some mixed signals on prices.Beyond the short term,however,the outlook is clearer.Demand for critical minerals will continue to rise significantl

7、y,and it will be very challenging for supply to keep pace.Right now,the share prices of mining companies are fluctuating significantly as the market weighs the balance between short and longer-term horizons.Deal activity for lithium companies is escalating and acquirers are very focused on the size

8、of longer-term opportunities.We all have critical choices to makeGovernments,communities,companies and individuals all have critical choices to make as we transition to a lower carbon economy.Its a complex time and the challenges are significant.However,its important for us to change the way weve lo

9、oked at things.Its time to think differently and act now.The good news is that Australia has large deposits of critical minerals(or magic dirt).The resources sector already provides significant funding to Australian governments,and now weve identified the potential to add$50bn in government revenue

10、from critical minerals if we make the right choices in policy and support.Which poses the question:How much,and where,should governments invest to achieve a return of this magnitude?To this end,our analysis on page 6 is based on PwC modelling that looks at four alternative futures for Australias cri

11、tical minerals sector.Importantly,we also explore a range of policy choices to help us maximise the size of the prize on offer.A year ago,we expressed an ambition for Australia to substantially increase the exploration,discovery and development of critical minerals projects,as well as a need to inve

12、st in value-adding downstream processing.We note some progress in government policy and actions.However,that progress is limited and insufficient,and were falling behind other countries.Theres much to do.2summaryExecutive11 www.industry.gov.au/sites/default/files/2023-06/economic-potential-of-austra

13、lias-critical-minerals-and-energy-transition-minerals.pdf PwC|Aussie Mine 2023Highlights04Critical choices06Beyond compliance11Deals13Critical contributionsTax and royalties15Financial analysis MT5016Financial analysis Gold21Financial analysis Critical minerals19Financial analysis Coal23MT5025Glossa

14、ry28310 year trend27PwC|Aussie Mine 2023PwC|Aussie Mine 2023$60.8bnTotal$27.7bnCoal4HighlightsMT50 overviewNumber of producersNumber of non-producers56%44%Critical minerals companiesMarket capitalisation$156bn26%higherNumberValue2257%Earnings30%higher$30bnEBITDARevenue14%higherOperating cash flows$2

15、5bnTotal$11bnCoal29%higherShareholder cash returns$6.2bn51%higherCapexDealsCriticalminerals deals50%Value up by19%CashCash$21bn$11bn33%higher$11bnNet cash$10bnDebtPwC|Aussie Mine 2023PwC|Aussie Mine 20235Return on equity2x 10 year average21%Market capitalisationCoalCritical mineralsGoldIron oreOther

16、20132014201520162017201820192020202120222023Market valueTop 10Changes in market valueIncreasedDecreased3812Out of 48New fundingDebtEquity$3.8bn$3.0bnOut of$6.8bnLithium revenueFY21 level9xEBITACritical minerals28%61%Coal companies breaking records GovernmentTax and royaltiesCapexShareholdersDividend

17、sand buybacksBalance sheetDebt and cashRecord prices$11.4bn14%Increase from 2022The next four charts show how the cash from operations for the coal companies has been allocated 36%24%9%31%PwC|Aussie Mine 20236Critical choicesA$171bn opportunity for Australia,but we need to earn itRight now,we face a

18、 range of critical choices.How we address these choices will inform our role in the path to net zero,as well as the extent to which our communities benefit from the global energy transition.Australia has the chance to generate more than$170bn in GDP and create almost 330,000 jobs by 2040 if we capit

19、alise on our first-class endowment of critical minerals and other energy transition minerals.Thats the size of the prize according to recent modelling,which explores four alternative futures for Australias critical minerals sector.From developing downstream capabilities to shaping international mark

20、ets,weve estimated what could be unlocked if governments,industry,and stakeholders take bold,coordinated action on critical minerals.Moreover,drastic action(see Scenario 4 outlined below)is needed to both maximise Australias economic potential and reach net zero emissions in a timely manner.In short

21、,well only get this prize if we are bold enough to think differently and act now.In June 2023,the Department of Industry,Science and Resources commissioned PwC to model a range of scenarios that estimated the potential benefit for the Australian economy based on opportunities in the energy transitio

22、n and critical minerals sector.These scenarios range from Australia maintaining our current market share,to more aspirational scenarios that require true step changes if they are to be realised.Scenario 1:Maintaining market positionUnder this scenario,Australia increases production in line with glob

23、al demand but remains primarily an exporter of raw materials(i.e.no real development of downstream capabilities).Scenario 2:Value adding Australia moves beyond a dig and ship mentality to capture more of the downstream processing supply chain.Government policy leads to increased investment in onshor

24、e processing and manufacturing.(For example,materials purification and refinement,or component manufacturing for EV batteries).Scenario 3:Shaping international markets Australia shapes international markets by influencing standards,attracting a green price premium for being an ethical supplier.We al

25、so progress government-to-government and business-to-business partnerships to secure greater market share.Scenario 4:Building capabilities and international market share(bining scenarios 1-3)Simultaneously adopting a deliberate policy focus on downstream processing capabilities(Scenario 2)and securi

26、ng greater international trade and investment(Scenario 3),while increasing production(Scenario 1).Scenario 4ii also incorporates faster project development times.Decarbonisation of the global economy is progressing with increasing momentum.Governments,institutions and businesses around the globe are

27、 focusing on,adjusting to,and investing towards a net zero carbon future.Exactly when well reach net zero is still up for debate.The path to achieving the Paris Agreement ambition(i.e.to reach net zero by 2050 and limit global temperature rises to 1.5C)is shrouded in uncertainty.However,as political

28、,social and financial capital flies towards net zero initiatives,its increasingly clear that we are on the path to net zero.The key question has become when not if this will be achieved.As our reliance on coal and hydrocarbons for energy decreases,mineral intensity increases.And Australia has the ri

29、ght magic dirt needed for this.Critical minerals are core components to electricity grid infrastructure,solar,battery and wind turbine technologies,and EVs that is,the building blocks of the energy transition.Australia is well placed,with large critical minerals deposits including lithium,cobalt,cop

30、per,alumina/aluminium,manganese,nickel,rare earth elements and vanadium.Summary of scenarios on Australian GDP and jobsAustralian jobs additional cumulative FTE 2022-2040(000)Australian GDP NPV from 2022-2040(2023 dollar values)(bn)3244ii5010015020025030035015010050-200PwC|Aussie Mine 20237A year ag

31、o,we outlined three key ambitions Australia must achieve to maximise our critical minerals opportunity:31.attract more investment into critical minerals projects and infrastructure2.create a policy environment to incentivise growth3.balance social and environmental outcomes(i.e.go about it the right

32、 way).Since then,Australia has made positive,but limited,progress.Meanwhile,some international jurisdictions have made more significant strides in the development of their critical minerals industries.The benefits reduce if we dont move swiftly.Established supply chains very easily become barriers t

33、o entry.Australias progress includes:Publishing an updated Critical Minerals Strategy 20232030.Notably,one of the focus areas of this strategy is attracting investment and building international partnerships,which aligns with the two measures announced for critical minerals in the 2023 federal Budge

34、t.Promising$57m over four years from FY24 to undertake international engagement to promote Australian critical minerals projects and build diverse and resilient supply chains with key international partners.Investing$23m over four years from FY24 for critical minerals policy development and project

35、facilitation,including activities to showcase Australias environmental,social and governance credentials to international markets.From the Critical Minerals Strategy and budgetary measures,we can see an intention from the Australian Government to tap into foreign investment,rather than compete with

36、it.To this end,in October 2022 the Government announced the establishment of the$15bn National Reconstruction Fund(NRF),which includes$1bn earmarked for value-adding in resources.The NRF Bill was passed in March 2023.However,it wasnt until September 2023 that the NRF Board met and,even then,this mee

37、ting was only to establish the National Reconstruction Fund Corporation.In other words,the pace of action with the NRF is insufficient.At the time of writing,none of the proposed$15bn has been deployed,despite the acknowledgement that competition is fierce and the international investment landscape

38、is shifting rapidly as governments around the world race to incentivise investment in diversifying and expanding critical minerals supply chains.4At the same time,other nations are innovating and changing their approach to critical minerals.International developments include:New resource deposits:Ne

39、w hard rock lithium(spodumene)deposits have continued to emerge,most prominently in Nevada(including McDermitt,Thacker Pass and Bonnie Claire)and Quebec(James Bay,Cyr-Kapiwak and Sirmac East).Notably,governments in both jurisdictions have provided significant support to the industry.Emergence of new

40、 technologies:For example,direct lithium extraction technology(DLE)technologies have the potential to significantly increase the lithium supply from brine projects,almost doubling production on higher recoveries.5 DLE has been applied in producing projects in China and South America and could increa

41、singly challenge Australias dominant supplier position.Ecosystem development:Governments are moving fast to develop ecosystems which provide strategic infrastructure,promoting related industries,attracting partners and encouraging innovation.For example,Quebec has a burgeoning lithium-ion battery in

42、dustry supported by i)a national battery strategy;ii)several stable incentive programs(including research and development,tax,and electricity rebates);iii)close proximity to Auto Alley rail links,and;iv)North Americas lowest electricity rates powered by 99%renewable energy.2Estimated using latest av

43、ailable taxation revenue for all levels of government as a percentage of GDP of 29.6%in FY22.www.abs.gov.au/statistics/economy/government/taxation-revenue-australia/latest-release .au/mining/critical-minerals/accelerating-australias-critical-minerals-opportunity.html 4www.industry.gov.au/publication

44、s/critical-minerals-strategy-2023-2030#:text=The%20Critical%20Minerals%20Strategy%202023,expertise%20at%20extracting% The size of the prize depends on whether Australia maximises its critical minerals opportunity.Total additional GDP ranges from$71bn$171bn(present value),while theres a chance to add

45、 115,100329,000 jobs.Using the latest available tax revenue-to-GDP ratio,this means up to$50bn in additional tax revenue to the governments of Australia.2Its a racePwC|Aussie Mine 20238Funding and incentives to significantly increase exploration activityCritical choices over how and which opportunit

46、ies to support:Department of Industry,Science and Resources initiatives supporting exploration activity include the NRF,the Major Project Facilitation Agency,and the Research and Development Tax Incentive.Initiatives from other federal government agencies include the Clean Energy Finance Corporation

47、,Export Finance Australia,Northern Australia Infrastructure Facility and the Junior Minerals Exploration Incentive,which encourages investment in greenfields minerals exploration companies.These initiatives are at varying stages and have been delivered with varying impacts.Whats apparent is that the

48、 speed and scale of developments in Australia is not keeping pace with international competitors so change is required.Picking winners(that is,providing government support for particular industries to promote economic development)is littered with historical missteps,and caution should be exercised.H

49、owever,in a world where the destination(net zero)is set in stone,the government may have to get comfortable with picking winners(whether specific mines or commodities)to support Australias net zero contribution.Infrastructure to support and incentivise critical minerals investmentsCritical choices o

50、ver the role of shared infrastructure to support investment:Critical minerals projects require a broad range of supporting infrastructure including sufficient water resources,reliable and affordable clean energy(e.g.renewables,battery storage),logistics(such as road,rail and ports),and social and co

51、mmunity infrastructure(including housing).Shared infrastructure can:reduce risks to individual projects by sharing the capex load across multiple projects,improving investment cases reduce single commodity/company risks to infrastructure investors by accepting feedstock from multiple suppliers allow

52、 investors access to a new asset class without direct commodity risk exposure.Were already seeing catalytic government support for critical minerals hubs,with the first hub in Central West New South Wales.In Queensland,the government has committed at least$10m to the vanadium Common User Facility in

53、 Townsville,with the goal of becoming a leading producer and exporter of new economy minerals.The CopperString 2032 transmission project could also help connect potential projects to the national grid.12The window of opportunity is narrowing for Australia to determine its role in the global energy t

54、ransition.If the potential return to governments is$50bn,then how much should they invest to realise this amount?Ten billion dollars?Twenty billion?More?Australia faces critical choices about the role it will play in the global energy transitionWeve started to promote Australias role in global secur

55、e supply chains with strong ESG credentials.Australias mining sector has been successful over past decades playing a key role in global supply chains.Globalisation is rapidly evolving,and a new type of multilateralism is emerging.We need to think differently about our role in the decades ahead.Speci

56、fically,Australia faces critical choices around:PwC|Aussie Mine 20239Collaboration across both industry and geographiesCritical choices over how we balance operating as one nation versus operating as individual states/territories:Queensland and New South Wales have each announced a critical minerals

57、 strategy for their state,in addition to the federal strategy.However,these strategies are disparate and there are no measures to collaborate or to complement the funding or measures of one another.Theres also risk in states competing against each other.Without cross-government collaboration,support

58、 will be piecemeal and potentially duplicitous.A master planning approach to critical minerals strategy development could lead to innovative developments such as multistate mineral processing facilities or supporting infrastructure.Theres also potential for matchmaking between junior and major minin

59、g companies,leveraging the mineral deposits of juniors and the processing capacity of majors.For instance,junior miners may benefit from a tolling agreement with major miners,to speed up project development and increase critical mineral supply.There are positive signs of commercial collaboration in

60、some areas.However,much more could be done together to progress the opportunities and challenges ahead.Direct market interventions to address potential market failuresCritical choices regarding if and how governments should directly intervene in markets:Its challenging for markets to always get it r

61、ight.Particularly for newer sectors.Theres therefore a role for governments to play in supporting emerging minerals.Commodity market intervention is not new in Australia,at both a federal and state level.Examples include supporting the LNG industry in its infancy,and the recent price caps for domest

62、ic gas and thermal coal.Potential market interventions into the critical minerals sector could include:Support for creating environmental,social and corporate governance(ESG)branding or a green pricing premium for Australian mineral exports,reflecting the higher ESG standards of Australian mining De

63、veloping a domestic critical minerals strategic reserve to i)support early-stage project development,ii)guarantee supplies of Australian minerals to domestic value-add refiners/manufactures,and iii)meet supply promises to allied countries.34PwC|Aussie Mine 202310Access to talent and skills to delive

64、r critical minerals projectsCritical choices to create the talent pipeline required to deliver critical minerals projects:As competition for talent heats up globally,Australia must consider how it will attract and retain skilled workers.We could import talent from overseas,however,this would be a sh

65、ort-term fix.The Australian Government has demonstrated support for STEM degrees including geology,metallurgy and mining engineering degrees.Continued support would help Australia build out domestic skilled labour capacity.Innovative solutions to increase mining-related STEM degree uptake include:HE

66、CS-HELP debt reductions in exchange for rural or remote work post-graduation;or requirements for rural secondments/practical experience with junior mining companies.Ultimately,without sufficient skilled labour,Australias critical minerals supply will not meet global demand,putting our role in the gl

67、obal energy transition at risk.There are many critical choices to be made around the complex,evolving nature of the critical minerals sector globally.We recognise that optimising critical minerals supply isnt easy to achieve.Governments,industry and communities face critical choices,and we must thin

68、k differently and act now to ensure we make the most of our environmental and economic opportunities.Untangling regulation to accelerate critical minerals supplyCritical choices on the role of regulation in enabling responsible critical minerals activity:Its important to remember that we need to opt

69、imise our critical minerals supply in the right way and regulation will always be an important part of the sector.In particular,we need regulation that supports ESG outcomes while facilitating investment in critical minerals to support a net zero world.Removing red(and green)tape and duplication,to

70、reduce bureaucracy without changing ESG outcomes,would be a win for both government and industry by reducing effort on both sides.Areas where regulations could be improved include:speeding up and combining approvals additional submissions processes and data support bolstering pre-approvals to enable

71、 earlier progress on funding aligning state/federal requirements to eliminate duplications modernising regulation-e.g.enabling re-mining of tailings and dealing with trailing liabilities.56PwC|Aussie Mine 202311Critical choices beyond complianceAustralias mining companies also have some critical cho

72、ices to make on a range of ESG matters Climate-related reporting:Moving from regulatory compliance to strategic value creation Executives and directors have a critical choice to make on climate-related regulation.Companies can choose a path of compliance.Or they can choose to go deeper to embed sust

73、ainability within their strategy,driving value creation so they thrive during the transition to net zero.For MT50 companies,theres an unmissable opportunity to unlock value by putting sustainability at the heart of organisational strategy.PwCs Global Investor Survey 2022 found that sustainability is

74、 a major consideration for investors.In fact,three of the top five priorities for investors relate to sustainability(namely:data security and privacy(51%),effective corporate governance(49%)and reducing greenhouse gas emissions(44%).How,then,do mining organisations embrace sustainabilityin practice?

75、Decarbonisation transition strategyThis starts with understanding the organisations energy consumption.Organisations must have i)an acute appreciation of the energy and emissions demand profile of their operations,as well as ii)a clear picture of the transition activities needed to reach a net zero

76、future.Of course,energy is only one lever and so your decarbonisation program should include other considerations such as emissions intensity.When reviewing emissions generated from Scope 2 energy activities,for instance,consider both emissions reductions and energy cost reduction opportunities,espe

77、cially given the ongoing volatility in the national energy supply.Business leaders should consider:What activities can we undertake behind the meter?Are there opportunities to leverage renewable energy and storage solutions to mitigate rising energy costs and reduce emissions?Is there scope to negot

78、iate future energy contracts to support electrification?(e.g.Contracts involving green firming energy commodity and optimisation services).If connected to the grid,is there an option to play ancillary markets with storage and controllable loads?Three opportunities for Australias mining organisations

79、 to create value from sustainability1PwC|Aussie Mine 2023A critical choiceOverall,theres an enormous opportunity to unlock value by placing sustainability at the core of organisational strategy.It all comes down to how we approach climate and ESG regulation and,on that front,organisations face a cri

80、tical choice.12The positive duty:An opportunity to go beyond complianceFrom December 2023,Australian businesses will have a legal responsibility to demonstrate proactive and meaningful action to prevent sexual harassment and sex-based discrimination in the workplace.This change,known as the positive

81、 duty,may pose challenges.Its also an opportunity to move beyond mere compliance to enact genuine and long-lasting change,and theres myriad reasons to do so.Our research indicates that 22%of employees value support of their wellbeing above all other factors.The positive duty is an opportunity for mi

82、ning companies to demonstrate real commitment to employees wellbeing and create safer,more inclusive workplaces by driving down sexual harassment rates and promoting physical and psychological safety.This is also good news for both current employees and potential employees.Embracing the positive dut

83、y is an effective way for mining organisations to position themselves as employers of choice and to attract a pipeline of talent in an industry where its notoriously hard to get staff.Theres a clear correlation between value creation and robust ESG practices.More importantly,its fundamentally the ri

84、ght thing to do as an employer.The critical choice to create safe,respectful and inclusive work environments for all employees is further explored in this article.Carbon strategyOrganisations,whether theyre covered by the Clean Energy Regulators Safeguard Mechanism reforms or not,should consider a c

85、arbon strategy that complements their decarbonisation programs.This means identifying how to create value from carbon at the same time you pursue decarbonisation.From fostering carbon market expertise to play in carbon markets,through to developing Australia Carbon Credit Units(to cash in at an oppo

86、rtune time),theres several steps you can take to set yourself up for carbon strategy success.Ask yourself:Do we understand our role in the carbon market?Are we a credit creator?Or a buyer,seller or retirer of credits?What constraints do we face?(e.g.Compliance obligations,commitments to stakeholders

87、 or capital availability.)Are we valuing carbon credits correctly?How are we defining fair value for a carbon credit?Is our internal carbon price increasing over time as our abatement opportunities are addressed and as the market matures?Nature as an assetFinally,hand in hand with your carbon and de

88、carbonisation strategies,is the concept of nature(or natural capital)as an asset class.This requires something of a mindset shift.No longer is nature viewed solely as a cost;its also an opportunity.Recent research by PwC found that a biodiversity market could unlock$137bn in financial flows to advan

89、ce Australian biodiversity outcomes by 2050,with more than half of this activity($78bn)to be driven by biodiversity,conservation,and natural capital-themed bonds,loans,debt and equity.MT50 companies are particularly well versed in biodiversity thanks to their exploration,development,restoration,and

90、operational activities.Biodiversity forms part of their license to operate from both a social(community and First Nations)perspective,and a regulatory perspective.Now,however,mining organisations need to see nature as an asset,and incorporate this thinking into their climate strategy,embracing the c

91、hance to preserve nature and use nature itself to offset carbon.23PwC|Aussie Mine 2023This time last year,PwC predicted an increase in M&A activity.This was certainly the case for the size of transactions in 2023,even as the number of completed transactions decreased.Unsurprisingly,critical minerals

92、 were the main feature.BHPs$11bn acquisition of OZ Minerals dominated the list of 2023 completed deals.Meanwhile,three significant pending MT50 lithium transactions mean that 2024 is expected to be even bigger for deals.Miners face an intensely competitive environment for critical minerals assets,as

93、 the sector attracts new buyers from other sectors such as industrial companies.The Allkem and Livent merger encapsulates what we expect to see more of.Namely,combining traditional mining companies with chemicals companies to unlock value from downstream activities.Gold transactions during 2023 were

94、 much lower than in recent years.(Note:Newmonts acquisition of Newcrest sits outside of the MT50.)We expect continued consolidation in the gold sector as business leaders focus on unlocking scale and synergies through M&A.MT50 coal companies have taken advantage of the opportunities arising from maj

95、ors realigning their portfolios to reduce coal exposure.Stanmore acquired the BHP Mitsui assets(including the$380m deal to acquire the remaining 20%stake this year).Whitehaven Coal has also recently picked up BHPs Blackwater and Daunia metallurgical coal mines in Queensland.13Critical minerals domin

96、ate deal activityCritical minerals dominate deal value90%Total deal value$14.2bnNotable pending dealsArcadium Lithium(Allkem-Livent merger)Whitehaven Coals acquisition of Blackwater and Daunia from BHP SQM acquisition of Azure MineralsMineral Resources acquisition of Bald HillCritical mineralsGoldCo

97、alIron OreOther1234Deal value by commodity20172018201920202021202220230358$bn101315PwC|Aussie Mine 2023Original equipment manufacturers switching to direct deals with miners to secure supplyBottlenecks in sourcing critical minerals are prompting original equipment manufacturers(OEMs)to bypass tradit

98、ional supply chains.Challenges in sourcing required critical minerals has led to a shift in attitudes by OEMs towards the mining sector,and a realisation that they can no longer approach the sourcing of critical minerals in traditional ways.As a result,were seeing an increase in OEMs dealing directl

99、y with mining companies via offtake and lending agreements.This includes pre contracting supply(through memorandums of understanding and non-binding offtake arrangements),often during early project stages,prior to financial investment decisions being made.We expect this to continue.In fact,it may ex

100、tend to include more early-stage direct equity interests in projects.Lithium is a good example.To meet the forecast increase in demand for EVs,the lithium industry is relying on early-stage mining companies(often with unproven technologies)to deliver the supply promised.Well need this if were going

101、to meaningfully close the supply gaps ahead.Plus,there are more opportunities with early-stage projects,particularly as customers face intense competition for supply from advanced projects.14MT50 transactions($m)Commodity group2017201820192020202120222023Critical minerals726451,4011,4232,1617,64112,

102、717Gold1,2972082,3643,4587,8501,668986Iron Ore0105281703240029Coal540230860001,983435Other393184720842600Total 2,3021,3724,9784,95110,12711,95214,167PwC|Aussie Mine 202315Critical contributionsTax and royaltiesGovernments are increasingly benefiting from the mining sector.Higher royalties in Western

103、 Australia and Queensland have helped those states enjoy strong surpluses.In 2023,the Australian government unveiled a surprise record surplus the back of critical contributions from the resources sector.The MT50 companies are making significant and increasing contributions to government funding at

104、both state and federal levels.Income tax payments for the FY23 tax year were a record$5.4bn,up by 59%compared to FY22.Coal was again the dominant contributor in FY23,with$3.3bn in income taxes paid.Critical support,with a strong expected financial returnThe MT50 is also demonstrating a clear win-win

105、 for governments in critical minerals projects.The earnings of critical minerals companies increased in FY23,while income taxes paid rose to$2.3bn.Royalties were also substantially higher,increasing by 112%to$0.8bn.Strong returns are available to governments if they make the right choices to support

106、 growth in critical minerals projects.Remember,the expected financial returns for governments is$50bn if we get this right.Income tax paymentscompared to FY21Government royalties and income tax paid by coal companies$6.4bn65%increase compared to FY225XIncome tax paid by tax year202020210123$bn202220

107、23456PwC|Aussie Mine 2023$155.9bn+$42.2bn 37%$24.6bn+$5.6bn 29%$60.9bn+$13.7bn 29%Dividends paid$30.4bn+$7.0bn 30%Capex16Financial analysisMT50Market capitalisationThe overall values for the MT50 companies increased 37%to a record$155.9bn at the end of June 2023,dominated by values for critical mine

108、rals miners.Earnings and profitability continue to break records The MT50 generated record earnings and profitability in 2023.Revenue and EBITDA increased by 29%to$60.9bn and$27.7bn respectively.Returns for coal and lithium miners were the standout performers,consistent with 2022,with coal miners ge

109、nerating$13.9bn in earnings(approximately 50%of total MT50 EBITDA),and lithium miners generating$6.2bn(approximately 22%of total MT50 EBITDA).Strong commodity prices and productionRevenues were higher in 2023 thanks to continued strong commodity prices and higher production.RevenueMarket capitalisat

110、ionEBITDARevenueEBITDAMarket capitalisation-75$bn5025June 21June 22June 23June 20-1040$bn3020June 21June 22June 23June 20$4.8bn+$1.5bn 45%$11.7bn+$4.8bn 70%Operating cash flowsJune 21June 22June 23-160$bnJune 201208040PwC|Aussie Mine 202317Financial analysisMT50Critical minerals miners set for growt

111、h;coal miners repay debtCash balances for the overall MT50 continued to grow.Cash balances for critical minerals miners increased 15%to$10.5bn as strong results in FY23 provided important growth funding.Cash held by coal companies,however,declined 14%as they settled 2022 tax liabilities,retired debt

112、 and paid dividends.Borrowings reduced by 23%,mainly driven by coal companies who have continued to repay debt from strong cash flows.The overall MT50 gearing ratio decreased marginally to 15%,mainly driven by coal.The overall MT50 gearing level continues to be significantly lower than the large-cap

113、 global miners.202120222023Earnings$bn$bn$bnRevenue29.447.260.9EBITDA8.723.430.4Net profit4.211.313.7Adjusted net profit3.112.115.4202120222023Financial position$bn$bn$bnAssets73.8107.0118.0Liabilities26.341.240.1Equity47.565.877.9Cash9.519.121.0Borrowings10.214.911.4Net cash1.94.29.5Gearing22%23%15

114、%202120222023Profitability measuresEBITDA margin32%49%48%Return on equity8%21%21%Return on capital employed6%18%18%MT50:Gearing ratio(average)0%10%40%30%20%MT50Global201220132014201520162017201820192020202120222023PwC|Aussie Mine 202318Financial analysisMT50Continued investment in growth Cash invest

115、ment spending continued to grow and is now 1.7 times 2022 levels.The MT50 increased its capital expenditure spend by a sizable$4.8bn(70%),showing large investment in its existing projects.The growth activity continued to be largely concentrated in critical minerals($4.5bn)and gold($3.9bn),with criti

116、cal minerals now dominating the total capex spend across the MT50.Growth funding was sourced from new debt and equity raises,along with cash generated from existing operations and cash reserves.Coal continued to repay a significant amount of debt($5.3bn)and dividends($6.3bn paid and payable)during t

117、he year after generating record cash from its operations($11.3bn).We saw debt and equity markets continue their strong support for growth projects of critical minerals miners and gold companies,with critical minerals miners raising$2.3bn in debt and$1.5bn in equity,while gold miners raised$1.4bn in

118、debt and$1.1bn in equity.Record cash from operationsHigher earnings translated into record operating cash flows of$24.6bn(an increase of$5.6bn or 29%).The increase was mainly driven by critical minerals miners on the back of strong results in FY23,with an increase of$4.3bn or 119%.Coal continued to

119、generate nearly half of the cash from operations($11.4bn).202120222023Cash flows$bn$bn$bnOperating cash flows8.019.024.6Capital expenditure(5.9)(6.8)(11.7)Cash acquisitions(2.3)(7.0)(1.0)Net investing cash flows(7.9)(12.9)(13.4)Net debt(repaid)/issued(0.2)2.5(5.2)Cash from share issues4.45.32.9Divid

120、ends and share buybacks(1.4)(3.8)(6.2)Net financing cash flows2.33.9(9.9)Capital expenditure by commodity groupGoldCoalCritical MineralsIron GoldOther202320222019201820212020PwC|Aussie Mine 202319Market capitalisationThe critical minerals companies continue to cement their place as the dominant comm

121、odity group within the MT50.They make up 44%in number,but represent 57%of the MT50 market capitalisation.The market capitalisation of the group increased$27.2bn,or 45%from June 2022.Almost all of this increase is attributable to the lithium producers.Record revenues and profits Growth in production

122、and sales translated into a significant increase in revenues,earnings and cash balances among the critical minerals companies of the MT50.The four lithium producers(Pilbara Minerals,Mineral Resources,Allkem and IGO)each reported high margins and EBITDA earnings over$1bn.Financial analysisCritical mi

123、nerals$89.3bn+$27.2bn 45%$8.0bn+$3.0bn 73%$15.0bn+$6.1bn 68%Dividends paid$10.5bn+$4.2bn 67%CapexRevenueEBITDAMarket capitalisation$1.4bn+$0.3bn 23%$4.5bn+$2.9bn 173%Operating cash flowsMarket capitalisationRevenueEBITDAJune 21June 22June 23-100$bnJune 20755025June 21June 22June 23-10$bnJune 208642L

124、ithiumOther critical materialsLithiumOther critical materialsJune 21June 22June 23-16$bnJune 20141210LithiumOther critical materials8642PwC|Aussie Mine 2023Lithium is fast charging the MT50 The four large lithium producers generated EBITDA over$8bn in 2023,demonstrating the significant value from in

125、vestment in lithium projects.A combined market capitalisation of$50bn,plus$7bn in cash and a strong pipeline of growth projects completes the picture.Record spot prices during part of the year helped earnings.While spot prices have since moderated,this should prove temporary.Supply still set to fall

126、 short of demandMT50 companies are taking advantage of the opportunities in lithium with many growth projects underway,including expansions,new projects,and downstream chemical projects.And yet this current pipeline of projects will not meet expected demand.Long lead times and expected delays in bri

127、nging large projects into production will impact market balance and pricing.Lithium M&A frenzyM&A activity in lithium is heating up.Pending deals include the Allkem-Livent merger,SQMs acquisition of Azure Minerals,and Mineral Resources acquisition of Bald Hill.Albermarles conditional offer to acquir

128、e Liontown for$6.6bn did not complete,and was replaced with a debt/equity raise to complete Kathleen Valley funding.20Financial analysisCritical mineralsMineral demand for use in EVs and battery storage is a major force,and is set to grow at least 30 times to 2040.Lithium sees the fastest growth,wit

129、h demand growing by over 40 times in this period.7Ambitious growth plansThe critical minerals companies within the MT50 cohort are keenly focused on growth.Capital expenditure in 2023 represents almost three times that of 2022 levels and almost eight times that of 2021 levels.The total capital expen

130、diture was dominated by Allkem,Lynas,Mineral Resources and Sandfire Resources,representing approximately half of the total capital spend by the critical minerals miners.The spend appears to be paying off,with record production and earnings in 2023.Strong cash flows and keen interest from debt and eq

131、uity markets will keep the growth spend coming for the critical minerals cohort.In October 2023 Mineral Resources announced the completion of its US$1.1bn notes offering,with the funds to be directed towards growth spend.Also in October 2023,Liontown raised$1.1bn in debt and equity to fund developme

132、nt of Kathleen Valley.7.Source:IEA:www.iea.org/reports/the-role-of-critical-minerals-in-clean-energy-transitions/executive-summary number of lithium producers in the MT50Record cash balancesCritical minerals companies held more than half of the MT50s cash in 2023.The aggregate cash position at June

133、2023 was over$10bn,more than 30%higher than June 2022 and a staggering 115%compared to June 2021.This has been built up from operating cash flows,along with debt and equity raised for growth projects.This cash will be critical to fund continued growth plans for critical minerals companies.Cash balan

134、cesCapital expenditureJune 21June 22June 23-5$bnJune 204321-12$bn108June 21June 22June 23642ProducersNon-producersDividends paidJune 21June 22June 23-1.6$bnJune 201.20.80.45PwC|Aussie Mine 202321Golden recoveryThe market capitalisation of the group increased$12.7bn in the past year a 51%increase fro

135、m 2022.The improvement in value reflects the gold price holding up in Australian dollar terms,as well as cost pressures moderating,and the expectation of future returns from ongoing growth.Higher interest rates,aimed at tackling inflation,has led to a very strong US dollar,which has dampened the gol

136、d market.Costs outpace revenue growthThe revenue of gold companies increased 12%in 2023 on the back of higher prices(particularly in the second half of the year)and higher production.However,margins continue to be under pressure with most gold producers reporting an increase in all-in sustaining cos

137、ts(AISC).This is driven by factors such as a continuing tight labour market,higher energy costs,the stronger US dollar,and persistent global supply chain issues.This translated into constrained earnings and operating cash flows in 2023.Financial analysisGold$37.9bn+$12.7bn 51%$4.6bn+$0bn 0%$14.4bn+$

138、1.5bn 12%Dividends paid$5.4bn+$0.9bn 19%CapexRevenueEBITDAMarket capitalisation0.4bn+$0bn 0%$3.9bn+$0.5bn 15%Operating cash flowsMarket capitalisationEBITDARevenue-15$bn105June 21June 22June 23June 20-6$bn42June 21June 22June 23June 20June 21June 22June 23-40$bnJune 20302010PwC|Aussie Mine 202322Fin

139、ancial analysisGoldProduction continues to increaseThe producing gold companies have continued to increase production of gold to a total of 5.2Moz in 2023,up from 5Moz in 2022,which represents a 4%increase in production.Four companies(Northern Star,Evolution Mining,Perseus and Ramelius)make up appro

140、ximately 61%of the total production of the gold companies included in the MT50.Gold production across the MT50 has increased significantly in the period from 20202022 as gold miners pursued growth through acquisitions.Notable deals include Northern Stars acquisition of 50%of the Super Pit and subseq

141、uent merger with Saracen;Evolution Minings acquisition of Red Lake gold mine and Ernest Henry mine;and Regis Resources acquisition of a 30%stake in the Tropicana gold project.Growth spending continuesAcquisition activity among the gold companies of the MT50 has continued to taper from the highs reco

142、rded in 2021.However,the MT50 gold cohort remains focused on growth,pursuing organic growth opportunities to optimise and expand their mining assets to lift production.This is reflected in the increase in capital expenditure in 2023,up 14%from 2022.Rising cash balances(up 19%on 2022),and refinanced

143、borrowings mean the group is well positioned to execute on their growth strategies in the near term.Dividends steadyDividends totalled$401m,largely in line with 2021 and 2022.201920202021-6Moz20185432Dividends paidJune 21June 22June 23-0.8$bnJune 200.60.40.2Gold production202220231June 21June 22June

144、 23-4$bnJune 20321Capital expenditureJune 21June 22June 23-4$bnJune 20321Cash balancesPwC|Aussie Mine 202323Market capitalisationThere are signs that the market is misunderstanding MT50 coal companies.While share prices have increased,the aggregate value of these coal companies at June 2023 was only

145、 1.5 times 2023 EBITDA.The market is effectively expecting further significant price pressure given relatively long reserve lives.Coal production at record highsCoal miners capitalised on record coal prices by increasing production.The coal companies saw an overall 8%increase in production(from 79.6

146、Mt in 2022 to 86.4kt in 2023).Coal miners,however,faced production headwinds in Australia.Labour shortages and cost pressures are hampering production and starting to eat into profit margins.In addition,adverse weather,including significant flooding events,have taken some Australian mines and transp

147、ort infrastructure offline and/or constrained production.Strong prices and higher production Companies continued to see the benefits of high coal prices in 2023.When coupled with higher production,these high prices meant the combined revenues from the coal companies rose by$5.5bn to$27.7bn a 25%incr

148、ease.This has translated into record earnings,as EBITDA rose by$2.2bn to$13.9bn in 2023.Financial analysisCoal$20.7bn+$1.5bn 8%$11.4bn+$1.1bn 11%$27.7bn+$5.5bn 25%Dividends paid$13.9bn+$2.2bn 18%CapexRevenueEBITDAMarket capitalisation$2.8bn+$1.1bn 69%$1.6bn+$0.9bn 118%Operating cash flowsMarket capi

149、talisationRevenue$bn30June 21June 22June 23June 202010-EBITDA-515$bn10June 21June 22June 23June 20June 21June 22June 23-25$bnJune 202015105PwC|Aussie Mine 202324Financial analysisCoalTotal government contributions in FY23$6.4bnCashed-up coal minersCoal companies are holding substantial cash balances

150、 of$5.9bn.This comes off the back of two years of record operating cash flows,driven by high coal prices and record production.From the$10bn free cash flow(after capex),$5.3bn has been used to repay debt,with$4bn in dividend payments and buybacks.Further dividend payments of$1.1bn will be paid durin

151、g the remainder of 2023.The coal companies also have an income tax bill of$1.7bn to pay.Substantial government contributionsCoal companies continue to be significant contributors to state and federal governments via royalties and tax payments.Royalties paid increased by 77%,predominantly due to the

152、amendments to the progressive coal royalties rates in Queensland which became effective 1 July 2022.The controversial revision led to the Queensland government producing a budget surplus of$12.3bn,which breaks the record for the biggest surplus ever recorded by a state government.OutlookAs the world

153、 shifts its energy supply to renewable sources,its clear coal will continue to play a substantial role throughout this transitionary period.While advanced economies are beginning to see a stagnation of investment and financing towards coal,high-growth economies such as China and India continue to bu

154、ild reliance on thermal coal for power and face increasing energy demand.Coal as an energy source will not be replaced in these economies as quickly as advanced economies.Long-term demand for metallurgical coal is expected to reduce more gradually,and depends on transitioning to green steel producti

155、on-for example,electric arc furnaces using hydrogen as a reducing agent rather than blast furnaces.This will require significant capital investment,innovation,commitment,and time to achieve.These transitioning economies,combined with geopolitical events disrupting global energy supply,are likely to

156、result in the continued relevance and contribution of coal during the formative years of a net zero economy.Overall,theres still positive short to medium-term outlook for the industry.65%increase compared to FY22Cash balancesJune 21June 22June 23-8$bnJune 20642PwC|Aussie Mine 2023252023 RankChange i

157、n rankCompany nameProducerPrimary commodityMarket capitalisation30 June 2023($bn)%Change(2023 to 2022)1+5Pilbara Minerals Limited(ASX:PLS)Critical minerals14.66+115%2 0Northern Star Resources Limited(ASX:NST)Gold13.89+74%3-2Mineral Resources Limited(ASX:MIN)Critical minerals(&Iron ore)13.79+52%4 0IG

158、O Limited(ASX:IGO)Critical minerals11.49+53%5+2Allkem Limited(ASX:AKE)Critical minerals10.21+55%6-3Lynas Rare Earths Limited(ASX:LYC)Critical minerals6.40-19%7+9Liontown Resources Limited(ASX:LTR)Critical minerals6.23+169%8-3Yancoal Australia Ltd(ASX:YAL)Coal6.05-15%9+1Evolution Mining Limited(ASX:E

159、VN)Gold5.91+35%10-1Whitehaven Coal Limited(ASX:WHC)Coal5.62+21%11+1Iluka Resources Limited(ASX:ILU)Critical minerals4.73+18%12+1New Hope Corporation Limited(ASX:NHC)Coal4.11+43%13-2Alumina Limited(ASX:AWC)Critical minerals4.02-5%14+6Sandfire Resources Limited(ASX:SFR)Critical minerals2.70+48%15 0Nic

160、kel Industries Limited(ASX:NIC)Critical minerals2.68+1%16-2Coronado Global Resources Inc.(ASX:CRN)Coal2.57-7%17 0Deterra Royalties Limited(ASX:DRR)Iron ore2.43+8%18+7Chalice Mining Limited(ASX:CHN)Critical minerals2.42+72%19+2Stanmore Resources Limited(ASX:SMR)Coal2.33+33%20-2Perseus Mining Limited(

161、ASX:PRU)Gold2.26+5%Who are the MT50?The MT50 are the 50 largest Australian listed mining companies by value.This excludes Australian-based global mining companies featured in PwCs global mining analysis,Mine 2023:The era of reinvention.While these companies have a significant Australian footprint,th

162、eir size and global exposure means they dont necessarily reflect trends in the Australian mining environment.Key changesLeavingOZ Minerals Limited(Acquired by BHP)Mincor Resources NL(Acquired by Wyloo Metals)OceanaGold Limited(Delisted from ASX)Lake Resources NL 29 Metals LimitedJervois Global Limit

163、ed St Barbara Limited Neometals Limited New entrantsGenesis Minerals LimitedLatin Resources LimitedArafura Rare Earths LimitedDevelop Global LimitedAzure Minerals LimitedArgosy Minerals LimitedReturningResolute Mining LimitedDeep Yellow LimitedMT50 constituents20222023Critical mineralsCoalGoldIron o

164、reOtherPwC|Aussie Mine 20232023 RankChange in rankCompany nameProducerPrimary commodityMarket capitalisation30 June 2023($bn)%Change(2023 to 2022)21+1Paladin Energy Ltd(ASX:PDN)Other2.18+26%22+8De Grey Mining Limited(ASX:DEG)Gold2.10+85%23+3Sayona Mining Limited(ASX:SYA)Critical minerals1.76+42%24-1

165、Core Lithium Ltd(ASX:CXO)Critical minerals1.67+1%25+3Gold Road Resources Limited(ASX:GOR)Gold1.60+33%26+3Capricorn Metals Ltd(ASX:CMM)Gold1.52+30%27+16Bellevue Gold Limited(ASX:BGL)Gold1.44+117%28+5Regis Resources Limited(ASX:RRL)Gold1.38+41%29NewGenesis Minerals Limited(ASX:GMD)Gold1.34+321%30+12Le

166、o Lithium Limited(ASX:LLL)Critical minerals1.28+93%31+9Ramelius Resources Limited(ASX:RMS)Gold1.25+66%32+13Emerald Resources NL(ASX:EMR)Gold1.22+87%33+13Boss Energy Limited(ASX:BOE)Other1.09+75%34-3Silver Lake Resources Limited(ASX:SLR)Gold0.90-20%35-8West African Resources Limited(ASX:WAF)Gold0.89-

167、28%36ReturningResolute Mining Limited(ASX:RSG)Gold0.83+234%37NewLatin Resources Limited(ASX:LRS)Critical minerals0.82+578%38-4ioneer Ltd(ASX:INR)Critical minerals0.71-17%39 0Vulcan Energy Resources Limited(ASX:VUL)Critical minerals0.70-10%40+9Westgold Resources Limited(ASX:WGX)Gold0.6822%41 0Energy

168、Resources of Australia Ltd(ASX:ERA)Other0.66-5%42+6Red 5 Limited(ASX:RED)Gold0.66+12%43NewArafura Rare Earths Limited(ASX:ARU)Critical minerals0.64+44%44NewDevelop Global Limited(ASX:DVP)Critical minerals0.63+95%45-21Grange Resources Limited(ASX:GRR)Iron ore0.62-58%46-10Syrah Resources Limited(ASX:S

169、YR)Critical minerals0.61-26%47NewAzure Minerals Limited(ASX:AZS)Critical minerals0.59+950%48ReturningDeep Yellow Limited(ASX:DYL)Other0.57+148%49NewArgosy Minerals Limited(ASX:AGY)Critical minerals0.55+12%50-6Mount Gibson Iron Limited(ASX:MGX)Iron ore0.53-19%26PwC|Aussie Mine 202327MT50$bn2013201420

170、1520162017201820192020202120222023Market cap35.436.63653.246.978.479.885.4112.8123.8155.9Total revenue21.323.828.72316.823.530.430.132.852.760.9EBITDA4.756.78.86.18.711.7101223.430.4Net profit-3.6-1.7-5.41.61.74.85.53.32.61115.4Operating cashflow3.94.44.67.35.37.710.49.610.119.424.6Impairment3.21.75

171、.410.90.10.51.62.91.02.3Net assets36.935.33536.629.738.544.947.45764.177.9Dividends paid0.70.60.50.80.61.52.82.31.63.74.8Average ROE(%)-1.100.030.207.479.2913.6414.105.847.2320.019.82Average ROCE(%)6.021.930.202.124.596.947.169.3714.0516.2317.8810-year trendPwC|Aussie Mine 202328GlossaryTermsDefinit

172、ionBattery mineralsThe raw materials used in the production of batteries,including lithium,nickel,cobalt,manganese and graphite.Capital employedProperty,plant and equipment,mining assets,plus current assets less current liabilities.Capital expenditure(capex)Purchases of property,plant and equipment,

173、and mining assets plus exploration expenditure.Critical mineralsMinerals that are considered essential to the economy which have potential supply risks,including cobalt,copper,lithium,magnesium,manganese,mineral sands(titanium,zirconium),nickel,rare earth elements(REE).This year we have added copper

174、 as a critical mineral given its significant role in electrification and potential future supply challenge.EBITEarnings(profit)before interest and tax.Adjusted EBIT excludes the impact of impairments and other non-recurring gains/losses.EBITDAEarnings before interest,tax,depreciation,amortisation an

175、d impairments.EBITDA marginEBITDA divided by revenue.Gearing ratioBorrowings(excluding lease liabilities)divided by(borrowings plus equity).Market capitalisationThe market value of the equity of a company,calculated as the share price multiplied by the number of shares outstanding.Mid-tier 50(MT50)T

176、he 50 largest Australian listed mining companies by value.(This excludes the Australian-based global mining companies featured in PwCs global mining analysis,Mine 2023:The era of reinvention.While these companies have a significant Australian footprint,their size and global exposure means they dont

177、necessarily reflect trends in the Australian mining environment.)Net borrowingsTotal borrowings(excluding lease liabilities)less cash.Net profitNet profit after tax.Adjusted net profit excludes the impact of impairment and other non-recurring gains/losses.Net profit marginNet profit divided by reven

178、ue.Return on capital employed(ROCE)Net profit excluding impairment divided by average capital employed.Marc Upcroft National Mining Leader+61 419 629 803 2023 PricewaterhouseCoopers.All rights reserved.PwC refers to the Australia member firm,and may sometimes refer to the PwC network.Each member fir

179、m is a separate legal entity.Please see for further details.This content is for general information purposes only,and should not be used as a substitute for consultation with professional advisors.D0623033PwC Australia contactsPwC is grateful for the support of mining company executives and director

180、s who contributed their perspectives to Aussie Mine 2023.Justin Eve Aussie Mine 2023 Project Leader+61 422 002 Varya Davidson Energy Transition Leader+61 478 303 Lindsey Ruster Aussie Mine 2023 Project Manager+61 437 633 Writing team and key contributorsMarc UpcroftJustin EveGuy ChandlerMartin ClaassenJames LoughridgeCarla ReynoldsShanae McKinleyDavid HendersonSimon McKennaLindsey RusterLachy HaynesRebecca OConnorAngelin WangAditya SinghElizabeth ShawGuy ChandlerEnergy,Utilities&Resources Leader+61 439 345 Tara SarathyAlicia ClarkeKatelyn BonatoBlanka KosakHarry Lumsden