Australia is leveraging off its strength as a mining powerhouse to become the go-to destination for initial public offerings in the resources sector.

The ASX notched up 42 IPOs in mining-related businesses over the past 12 months despite the Covid-19 pandemic, well ahead of other hotspots including Toronto, with 28, and London with two, according to data compiled by Bloomberg.

That’s a good position to be in at a time when talk of a commodities supercycle is spurring a rash of new developments, while the global economic recovery is set to drive Australia’s resources earnings to an all-time high this financial year. Rapid growth in the nation’s production of battery minerals such as lithium is seen buoying its export industry out to 2026 and beyond.

“There’s no doubt that there’s a buoyant environment for resources companies,” said Eddie Rigg, chairman and head of corporate finance at Perth-based brokerage Argonaut. Explorers were now in a race to find new resources, including lithium and nickel, after a period of low investment around the middle of the last decade, he said.

There were a number of factors which go into the ASX’s “secret sauce” for attracting resources capital, head of listings Max Cunningham said in an interview. These included the exchange’s single-board structure, which meant that smaller companies got better exposure to the full suite of investors. Australia’s best-in-class system for reporting exploration results also helped to underpin confidence in new projects coming to market, he added.

One IPO looking to ride the supercycle is copper developer, QMines, which is scheduled to start trading on the ASX on April 21. It had already exceeded its minimum A$10-million target for the IPO to raise capital to help get its flagship Mt. Chalmers copper-gold project investment-ready over the next two years, Executive chairman Andrew Sparke said in an interview.

QMines was looking to tap into a gap in the market for copper-exposed startups, Sparke said. “There’s a scarcity factor that you don’t see in commodities such as gold,” he said.

Pure copper plays account for just 1% of ASX-listed metals and mining stocks by market capitalization, according to exchange data, compared to 17% in gold. Kincora Copper, which is developing copper/gold projects in Australia and Mongolia, doubled its initial IPO raising target before listing on the ASX on March 30.

Australia’s strong tradition in mining translated into a greater willingness by investors to take risks on start-up producers, the ASX’s Cunningham said, while rags-to-riches stories such as Fortescue Metals Group offered inspiration to junior miners looking to establish themselves. The company was built up by founder Andrew Forrest over little more than a decade to become the world’s fourth-biggest iron ore exporter.

Still, Argonaut’s Rigg warned that not every mining startup coming to market would be a sure-fire winner for investors. The key was for bankers and investors to do their due diligence to identify the serious contenders. “You’ve got to price these things correctly,” he said, adding that some companies often tend to hire the bankers that gave them the strongest valuation to lead manage their IPO, even if their assessment is wildly optimistic.