PERTH (miningweekly.com) – Fitch Solutions Country Risk and Industry Research has predicted 4% year-on-year growth for Australia’s cobalt mining sector in 2020.

Australia’s cobalt sector is further expected to grow by 5.3% on average between 2021 and 2029, compared with an average of 2.4% between 2010 and 2020.

Fitch pointed out that Australia currently had 68 cobalt projects detailed on its critical minerals project list, providing a strong pipeline for exploration and development. Of the 68 cobalt developments, 19 are considered to be advanced with a combined contained concentration of cobalt exceeding 960 000 t.

The country was the third largest cobalt producer in 2019, behind the Democratic Republic of Congo (DRC) and Russia, producing 5 100 t, with Australia also estimated to host the world’s second largest reserves of some 1.2-million tonnes.

Fitch said in a new report that a new government focus on critical minerals will increase the attractiveness of Australia’s mining regulatory environment.

“In 2020, the Australian government published the second edition of the Australian Critical Minerals Prospectus in order to promote investment in key projects including cobalt developments. In January 2020, the federal government established the Critical Minerals Facilitation Office to further aid in the growth of Australia’s critical minerals sector by coordinating a national strategy.

“Moreover, the government has prioritised creating a supportive mining policy environment through state agencies Austrade and Export Finance Australia, as well as $32.7-million in grants issued to the country’s cooperative research centres projects,” the report read.

Fitch noted that lower risk and increased sustainability initiatives are expected to shift foreign investment increasingly towards Australia, with other geographic areas hosting a greater cobalt reserve likely to offer more risk.

“Australia is ranked third globally on our mining risk reward index, ranking significantly higher than the DRC which is positioned at 51. For example, Australia receives a perfect score in our mining regulation sub-score, contrasting with the DRC’s score of 7.4. Australia represents a bright investment spot for miners and off-taking firms seeking to avoid the human rights and environmental risks associated with cobalt mining in the DRC,” the report stated.

“Additionally, Australia’s mining regulation prioritises sustainable extractive processes which will prove appealing for countries with strong environmental standards. For instance, the European Union is looking to secure mineral sourcing through strategic international partnerships. The European Commission estimates that the EU will need five times more cobalt by 2030 in order to accommodate rising demand, and 15 times more cobalt by 2050.”