Developing a Perth Critical Minerals Exchange (PCMX)

The Challenge 

Sustainable and profitable mining depends on the product-price achieved offsetting operating costs incurred. Much of Western Australia’s mining production is relatively unprocessed material for which no fair, transparent and efficient marketplaces exist. 

Present marketplaces in some minerals: 

• Produce short term prices well below reasonable economic longer-term expectations, due to: 

• • focus on short term production and limited customer group 

• • lack of access for financial investors depressing price competition. 

• Do not match ex-mine production specifications with buyers’ demands, so product produced may not be sold directly to a marketplace, and dependency on downstream processors is built 

• Fail to support forward planning and financing due to a lack of forwards markets for miners and processors 

Proposed Solution

The proposed solution is to research and develop a suitable market environment for individual minerals and production chains by: 

• Identifying and understanding the next steps in structural market improvements 

• Developing improved price-discovery methodologies and processes 

• Test such processes in an operational environment 

• Developing suitable tradeable mineral products (financial/contractual) 

• Developing suitable spot market rules and infrastructure where required 

• Integrating with existing or developing market tools for relevant materials where available 

• Developing effective forwards products and market that connects producers’ needs with investors’ and consumers’ needs, for better price discovery 

• When transactional demand develops, creating a heterogeneous minerals trading platform with improved price-discovery mechanisms to address varying states of maturity of individual minerals markets 

PCMX is an industry collaborative project involving the Australian financial (banking and superannuation) and Australian mining industries.  

Proposed Benefits to WA 

The project intends to capture greater economic value for Western Australia and Australia, through three key areas of impact: 

• Better prices for production. 

• Perth-based financial market infrastructure for minerals. 

• Increased minerals production through (a) increased activation of new resources, and (b) an improved financial environment for the establishment of downstream processing facilities. 

Financial Assistance DOI

DOI: 10.71342/140320740873