Battery and critical mineral companies outperformed gold miners this year, according to a new report by PricewaterhouseCoopers (PwC).

In the sixteenth edition of its ‘Aussie Mine’ report, PwC noted that there had been a significant shift in the makeup of the top 50 midtier companies on the ASX (MT50), with the rise in value of critical minerals companies outshining gold’s performance for the first time ever.

The report stated that, while gold companies still dominated the MT50, with 36% by number and 33% by value, critical minerals companies had soared, now representing nearly a third of the MT50 value, or 34% by number and 31% by value.

“Five of the seven new entrants to the MT50 this year have critical mineral projects. And this will continue to grow as the demand for critical minerals increases to support the infrastructure needed to achieve net zero. In short, mining is critical to a low-carbon global economy,” PwC said.

The report noted that accelerated growth in critical minerals production and processing would be necessary to deliver the global energy transition, and to meet the demand from renewable-energy generation and storage technologies, and the electrification of transport.

Over the next decade, electric vehicle (EV) production would need to increase tenfold, charging infrastructure would need to grow more than 30 times, and installed renewable power would need to triple in capacity.

“Australia is poised to be a global leader in the new energy economy. This is due to our natural endowment of critical minerals like lithium, nickel, copper, graphite, rare earths, and cobalt. Also, thanks to Australia’s track record as a credible and reliable exporter of commodities,” the report stated.

It warned that critical mineral producers would still faced many of the traditional challenges that beset mining endeavours, including the need to secure offtake to underwrite fundraising efforts, against the backdrop of evolving critical minerals markets.

“These markets often feature opaque pricing, along with sudden and extreme supply and demand shifts,” the report added.

“Given the scale of the opportunity, not to mention the amount of investment and immediacy of action required, a coordinated approach is needed from all levels of government, institutional investors, and producers to develop shared infrastructure solutions and expand the industry in Australia.”

Meanwhile, the market capitalisation of the MT50 increased by 50% to a record A$113-billion as of the end of June this year. With the exception of gold, the values of all mineral groups increased significantly from the heightened uncertainty of mid-2020, PwC stated.

The market value of iron-ore companies increased by 178%, reflecting the record price period from May to June this year; however, iron-ore prices subsequently halved from these record levels.

Meanwhile, coal companies remained an outlier, with continued low coal prices resulting in losses, PwC said. It noted that, while coal prices subsequently increased up to October, this was expected to be temporary, and that an unsettled future remained.

“Record earnings and operating cash flows have supported a new period of growth in battery and critical minerals, gold and energy transition metals such as copper. This growth also provides MT50 companies with a strong platform to continue to focus on their environmental and social governmance (ESG) strategies and create long-term sustainable value,” the report read.

ESG was identified as one of the top trends shaping the Australian mining industry this year, along with the opportunities created by critical minerals. Emissions reduction, transformational deals and continued tax and royalty contributions also remained top of mind during the year.