Crystal Ball: 2025 in the eyes of mining bigwigs Bill Beament and Simon Lawson

The re-election of Donald Trump in the US has created more uncertainty for year ahead so we caught up with Develop’s Bill Beament and Spartan Resources’ Simon Lawson and more at the Resources Rising Stars Summer Series to do some crystal ball-gazing.

The Trump effect

Bill Beament, one of Australian mining’s most influential leaders, believes Trump’s re-election will be positive for miners.

“I think China will have to counteract tariffs, and the only way they can do that is through massive stimulus, and that’s going to be good for Australia, for resources, in particular base metals,” he told Stockhead.

He also sees 2025 as the point the world returns to a growth phase.

“When society stops worrying about inflation and cost of living and wants to grow again, it’s going to be very positive for resources, and that’s iron ore, all the bulks, and all the base metals and lithium to a degree, though it’s a little bit of a long winter,” he said.

Lawson doesn’t expect any calming of political instability in 2025.

“Trump’s going to try and get involved in the whole Ukrainian conflict. He might even be successful, but I don’t think he’s going to solve the Middle Eastern issues,” he said.

“I think he’s made some pretty bold statements to the BRICS nations that they aren’t going to get away with de-dollarising, which to me, I don’t think they’re going to listen to him. He’s going to tariff them as a penalty, and I think that’s actually going to have the effect on gold that instability would – maybe even a better effect.”

Gold rally paused

Despite some weakness in the gold price since the US election, analysts remain bullish on its prospects for 2025.

Bell Direct market analyst Grady Wulff told the RRS Summer Series in Sydney this week that tailwinds remained for the gold price.

“The fundamentals are still there, and they will be for a long time to come, so we’re expecting the gold price will continue to rally into next year,” she said.

“The Chinese government and the People’s Bank of China are buying up more bullion than ever. We have geopolitical tensions rising. We have this risk of war escalating in the Middle East. We have a weakening US dollar expected over the next year. There’s so many fundamentals driving the gold price right now.”

Genesis Minerals (ASX:GMD) corporate development officer Troy Irvin said gold stocks had performed well recently, but it was coming off a low base.

“My broker friends tell me that gold stocks remain inexpensive and under-owned,” he told the same event.

“Even if we look at earnings multiples, the gold sector’s on about six times. Broader markets are closer to 14 times, so the entire sector is basically cheap.”

Irvin said the large generalist investors were mostly yet to return to the gold sector.

“That’s the reality. I think, what I certainly hope, happens is that that higher gold price translates into increased earnings and cashflows in the coming reporting periods, and that should give the whole sector a kick along.”

Gold M&A revs up

Monday morning kicked off with the news of Northern Star Resources’ (ASX:NST) $5 billion scrip takeover of developer De Grey Mining (ASX:DEG).

Beament is no stranger to gold M&A, having executed multiple transactions when he led Northern Star last decade.

He believes there should be more gold sector consolidation.

“There’s natural players that should get together,” he said.

“And it’s not about getting bigger and bigger, it’s just a lack of talent. People who run mines, geos, metallurgists, engineers, miners and processing, so the more of them that get together, the less competition for talent in the industry, which helps everyone out.”

Given the dearth of quality assets in the sector, Lawson believes consolidation among the mid-tier producers is more likely than widespread M&A.

Like most in the sector, Lawson had heard the rumours about global majors Barrick Gold and Agnico Eagle Mines being interested in De Grey but was pleased to see the company acquired by an Australian miner.

“I think it’s a good deal, and it’s great for the gold space, because I think it makes consolidation, particularly with a 17% shareholder in Gold Road, even having that presence of a large shareholder there, a deal could still get done, and that’s pretty relevant to us because obviously we’ve got a fairly big shareholder, and we have a really good relationship with them,” he said.

Ramelius Resources (ASX:RMS) acquired 18.3% of Spartan over July and August and Spartan will announce this morning that the mid-tier miner has subscribed for shares in Spartan’s $220 million placement to increase its ownership to 19.9%.

“They haven’t put anyone on the board. They’re quite happy to sit there. But a lot of people thought, well, Ramelius is there, maybe that takes away competitive tension?” Lawson said.

But RMS is already ahead on its initial investment, and Lawson said the NST-DEG deal showed a takeover offering a premium could be launched with comfort by a larger player.

Long winter for lithium

The million-dollar question is when will the lithium price recover?

“We’re expecting a rebound in the price of lithium carbonate, hydroxide and concentrate over the next two years, so FY27 is when we’re seeing a supply shortfall across the board,” Wulff said.

She said the electric vehicle boom had run hard during the pandemic but demand had slowed.

“We had car producers, Tesla, BYD and all these companies building new cars, and it really kind of jumped the gun – it happened way too quickly,” she said.

“Hertz, for example, have just sold off their whole fleet of battery vehicles, simply because a lot of people would get them and the hotels they were staying at in the US didn’t have charging ports, so people were breaking down left, right and centre.”

Beament agrees that the lithium winter will last at least a couple more years, but was bullish on the long-term and said there was still interest from customers in Develop Global’s (ASX:DVP) fully permitted Pioneer Dome project.

“Who knows where lithium goes, I think it’s a long winter for the next two years, but that will be a project that can be turned into a mine extremely quickly,” he said.

Base metals re-emerging

“I do think the base metals have been in the cupboard and in the shade for a long time. I think they’ll start coming out,” Beament said.

Develop will be producing copper and zinc from Woodlawn in six months but it is one of only a handful of new mines being built globally.

“I think there’s eight new copper smelters that have been announced in the last two months,” Beament said.

“It’s just crazy the amount of downstream capacity that’s getting built in copper and zinc, but no one’s talking to miners.”

A lot of the potential projects in copper that could move the dial have large capital cost estimates, lengthy permitting times and are in challenging jurisdictions.

“You’ve got CEOs that sit in the chair for five years, and there’s a 10-year build,” said Beament.

“I know a lot of those CEOs and not many of them are going to put their reputation on the line to build a 10-year project when they sit in the chair.”

Last week it was reported that Develop’s Woodlawn funding and offtake partner, commodities trader Trafigura Group, had ordered thousands of tonnes of zinc from London Metal Exchange warehouses.

“It’s the canary in the coal mine when you see the second biggest commodity trader in the world in zinc going and buying half the LME warehouse,” Beament said.

“They’ve got more intel than any one of us. And these are the things that don’t really hit the press here in Australia much, because we’re so small in base metals. But overseas, we watch that, and that’s their watershed moments. That’s telling you what’s coming.”

At Stockhead, we tell it like it is. While Spartan Resources is a Stockhead advertiser it did not sponsor this article.