Energy & resources

Industry leader Jannaya James

National Head of Energy & Resources

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A new cycle for the mining sector

After several years of incredibly tough market conditions, the mining industry is again experiencing the more favorable part of the cycle, with a return of investor interest.

We advised long-time client Jupiter Mines on their 2018 Initial Public Offering (IPO) – with an initial market cap of around A$780 million, the IPO was one of the largest in the metals and mining industry in the last decade. Jupiter Mines’ flagship asset is a 49.9% interest in the manganese mine in South Africa. Manganese is a critical component in carbon steel production, but also has applications in batteries for electric vehicles, a market which is expected to be an important driver of demand for manganese.

Mining service companies are also benefiting from improved conditions but must take care to maintain the disciplines developed during the tough times whilst seizing opportunities for growth.

The energy sector will look dramatically different in 15 years

The 2017 Independent Review into the Future Security of the National Electricity Market, Chaired by Dr Alan Finkel AO, set the scene for the future of the energy and resources sector in Australia.

Without investment into our energy networks, Australia is at risk of increased instability – meaning more black-outs, higher prices for consumers, and less uncertainty for business. The Independent Review highlighted the need for future reliability, lower emissions, system security, distributed energy resources and demand response mechanisms.

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We understand the unique and cyclical challenges the energy and resources sector faces, and work with clients across the supply chain to take advantage of government investment into the sector, while also preparing for technological changes or potential lulls in activity.

An appetite for alternative energy generation and storage

From large scale renewables to home-scale energy generation, 2017 was a record year in terms of investment in alternative energy generation and storage. Australia saw 50 large-scale renewable energy projects either actively under construction or securing financial commitment. These projects are expected to lead to 4670 MW of new generation capacity and more than 5440 new direct jobs around the nation.

We work with clients to navigate funding options and develop strategic business frameworks to help them succeed. In 2017 we worked with global renewable energy developer, Windlab Limited who secured government funding from Clean Energy Corporation and Australian Renewable Energy Agency to develop the groundbreaking $160m Kennedy Energy Park in Queensland.

The increased investment in alternative and renewable energy also bodes well for the mining industry spurring demand for iron ore, silicon and aluminum. We’re also seeing an uptick in exploration for alternative metals – particularly lithium, a core material for battery storage.

Growth opportunities through project development and M&A

Market conditions are favourable across the broad energy and resources sector and provide opportunities for growth, through project development and transactions. We have been pleased to see Dacian Gold and Gascoyne Resources, two long standing clients, commence production in 2018 and look forward to continuing to support their growth.

Our team provides comprehensive service support, with a suite of integrated services across audit, accounting, tax and financial advisory.

We leverage our connections across the industry to add value and assist our clients to grow. This includes introducing project opportunities, matching joint venture partners and identifying alternative fund raising opportunities. And we foster strong relationships with industry and regulatory bodies, ensuring we stay abreast of industry changes to provide meaningful and relevant advice to our clients.