I had the opportunity to speak with Kyle Rodda and discuss three commodities and associated exposures.

Please click on the link below to access and watch the interview:


Uranium – Boss Energy (ASX: BOE)

The uranium sector is steadily growing in profile and unlike most commodities so far in 2023, has managed solid price gains. It is set to play a greater role in the alternate energy picture over the coming decades.

Boss Energy is one of the very few ASX-listed companies that offers domestic production exposure, with its Honeymoon mine near Broken Hill in South Australia set to restart production before the end of the year. Boss bought the project from former owner Uranium One in 2015, and has been working on bringing the in-situ leach mine back into production. Boss is fully-funded through to production, with cash on hand of around $100m, and a strategic uranium stockpile worth around $100m, based on current prices, and no long-term debt.

Figure 1: Boss Energy share price v uranium futures price, year-to-date.

With the outlook for the uranium price continuing to strengthen amid growing use of nuclear power and a shift away from Russian uranium, Boss is in a strong position, as evidence by its solid share price performance.

Gas – Strike Energy (ASX: STX)

There has been much public and political focus centred on Australia’s east coast gas market, amid warnings of gas shortages, policy interventions and higher prices. But it’s over on the west coast where the next gas debate is brewing. Just as the market is tightening in WA, nearly all new gas discoveries have been bought up by three prominent Western Australian billionaires, who have their own priorities for the gas. In the past six months Gina Rinehart’s Hancock Prospecting has bought into the West Erregulla discovery via taking over Warrego, while Chris Ellison’s Mineral Resources has consolidated the Lockyer Deep discovery by acquiring Norwest, in addition to Kerry Stokes’ backed Beach acquiring the Waitsia discovery alongside other surrounding acreage several years ago.

These new entrants who have secured much of Perth Basin’s gas are different from traditional gas producers. They have diverse interests including as gas users. They are more likely to prioritise the use of their newly acquired gas resources for their own operations (and export).

Figure 2: Strike Energy share price year-to-date.

STX therefore really is in the right place and at the right time with respect to its emerging gas business. The focus of STX’s gas acceleration strategy is the target of bringing up to four onshore Perth Basin gas fields into commercial production by the end of 2025. Tim Goyder is also a 1.2% stakeholder and a former director.

Graphite – Walkabout Resources (ASX: WKT)

Graphite is a commodity with a relatively low profile, yet it’s the single largest component in lithium-ion batteries, there’s been substantial under-investment in new supply and the market wants to shift away from a Chinese-dominated supply chain. However, through all of this graphite prices have remained stagnant. For now however, graphite remains an industrial metal, largely used in the steel industry, with EVs currently accounting for just 25% of current graphite demand. But a lack of investment is set to lead to an accelerated shortage of graphite for EV batteries.

Walkabout’s 100%-owned Lindi jumbo graphite project in Mozambique has a 24-year mine life and is on track for maiden production towards the end of this year. While natural flake graphite demand is primarily driven by the steel market, rapid growth in electric vehicle production is expected to drive a big uptick in demand and pricing over the next few years. Alongside demand from energy-storage applications, the battery industry is due to become the largest sector of demand for the graphite supply chain. Lindi Jumbo will produce about 25% of its product suite, or around 10,000 tonnes per annum, into this sector of the market.

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