It may be Chinese Year of the Dog but surging demand for base metals and low levels in international stockpiles are all pointing towards 2018 also being Year of the Base Metal.
Unlike the precious metals gold, silver and platinum — which are relatively difficult to find — base metals occur in many regions.
The base-metals complex, as it is known, includes nickel, lead, copper, tin, aluminium and zinc. More recently, cobalt and zircon have been loosely considered to be part of that group.
The metals have wide industrial applications and are also found in abundance throughout Australia.
Why base metals matter
From the moment you wake up and switch on the kettle to when you switch off the light and go to bed, you will have used several base metals.
The stainless steel your kettle and sink are made of comes by adding nickel to steel, while copper piping has delivered the water for that cup of tea or coffee as well as the electricity to turn the kettle on. Zinc and aluminium are used in the refrigerator that kept your milk cold and zircon is what strengthened your cup and saucer. Tin and lead were likely used in the solder to manufacture the fridge — although there is a move towards replacing lead with copper when it suits the application.
Perth-based base metals specialist at Alto Capital Carey Smith said despite their ubiquity, base metals were little understood.
New technologies drive demand
Base metal prices have been in the doldrums for the last few years, having suffering from low commodity prices.
Mines across the world, including some in Australia, closed or went into care and maintenance — a term to describe a closed operation which may reopen at a later time.
But renewed demand, especially from China which uses 50 per cent of all base metals globally, was creating a base metals deficit.
“The refineries that make metals like stainless steel and iron are actually running out of product,” said Mr Smith.
“So as long as China is growing and consuming, and continuing to urbanise, demand will keep growing.
“This week, stockpiles of nickel in China were at their lowest level in 10 years.”
Along with that demand, base metals are finding new applications in technology, including rechargeable batteries used in smart phones, laptop computers and power storage.
Although commonly known as lithium-ion batteries, they contain high levels of nickel and cobalt.
Regional communities hope to benefit
Just two years after it closed, the Century Zinc mine in far-west Queensland has re-opened and secured contracts with Chinese companies for its concentrate.
Mr Smith said the new owner New Century Resources would not meet the same production levels of former owner MMG.
“It will be on a smaller scale, but the economics stack up,” he said.
In outback Western Australia, there are moves to bring a controversial lead mine near Wiluna back into production.
The Rosslyn Hill mine on Paroo Station was mired in environmental incidents both at the mine and the Port of Esperance where its product was shipped.
After three years in care and maintenance, new owner Canadian company LeadFX has applied to the State Government for environmental approval to make lead concentrate and turn it into ingots.
It is a proposal that has the support of Wiluna Shire CEO Colin Bastow who was hopeful the project would get environmental approval.
“There will be 200-plus jobs related to it and that would add more vibrancy to Wiluna.” he said.
“More workers around means more activity and we’d be hopeful of spin-offs for the town, like support for the shops and making the airport more sustainable.”