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How the Australian Dollar Impacts Mining Companies

The Australian economy — and its currency — owes its fortunes to the prolific and profitable mining sector.

The currency of Australia — the Australian dollar — is one of the most traded currencies on the planet.

Coming in at fifth globally on the foreign exchange market (FOREX), the Australian dollar is up there with the US dollar, the euro, the British pound and the Japanese yen.

As a resources-heavy economy, the Australian dollar moves with the commodities that it exports, like coal, iron ore and gold, linking it to the fortunes of its export clients. More demand for Australia’s resources equals more investment, equals a stronger economy and logically, a stronger dollar.

The land down under famously mines just about everything you can shake a stick at, and that’s reflected on the ground and in the numbers. According to government data, the mining industry makes up some 11 per cent of the Australian economy, and Australia is recognised as one of the great resources-intensive exporters — similar to Canada, Brazil and many African nations.

The value of exports to Australia is immense — 63 per cent of all export dollars come from resources exports. The continent is teeming with valuable resources, many of which Australia has the market cornered on, as the allure of a wide-open geography, stable and welcoming economy and educated workforce makes it hard to pass by as an investor.

No surprises then that the value of the Australian dollar to mining companies — or the value of mining to the Australian dollar — is closely intertwined. The industry is widely regarded, and recognised by the Reserve Bank of Australia, as having lifted Australian standards of living, wages and GDP, and having ensured the economy of the land down under remained without a recession for three decades.

It goes without saying then, that the Australian economy — and its currency — owes its fortunes to the prolific and profitable mining sector.

The value of the Australian dollar in the last few decades of the mining boom, the economic smorgasbord of wealth fueled by massive mining investment primarily in Western Australia, can therefore be seen to track the fortunes of Australia’s export markets. Up to now, that would be China, which consumed 83 per cent of Australia’s iron ore exports in 2020, though ructions this year between Australia and China could potentially see that change in a worst-case scenario.

Until — or if at all — that changes, China’s hunger for raw materials has helped prop up the Australian economy- and the dollar, keeping it strong compared to its competitors, with demand for commodities pumping resources and development into the corners of Australia.

But for all the dependency on China that Australian exporters have, the fact remains that commodities by and large are bought and sold in US dollars, meaning that for Australian miners, a weaker Australian dollar to the US dollar is very much a good thing.

Investors that play in Australian markets will have to keep an eye on where the AUD to USD conversion rate is trending, as with any currency on commodities that cross borders, exchange rates play a large role in when to buy — and when to sell.

For much of the last 30 years, the Australian dollar has been weaker against the US dollar. Its range is usually between 90 cents to 60 cents to the US dollar.

In the early 00s it dropped to the 50s, and for a two-year period between 2011 and 2013 it was often at parity or stronger than the US dollar (before falling rapidly afterwards) but for the most part the Australian dollar has been reliably around the 70 cents to a dollar mark.

With high Australian wages and higher costs of doing business in Australia, selling commodities in US dollars are a boon for domestic miners, as exchanging the greenback into local currency gives miners an extra boost for their product sold.

A low Australian dollar also makes it easier for North American investors to get into the market simply due to value for money, unlocking the mineral potential within.

As a resources-heavy economy, a lower Australian dollar makes the country more attractive for investors looking at Australia’s competitors — like Canada. Canada is another country teeming with mineral wealth and graced with a well-educated population and led by stable government, but the Canadian dollar is usually stronger than the Australian dollar. While it’s not that much stronger, it still gives Australian miners an edge. While other competitors like Brazil — with a significantly weaker currency — come with other pitfalls, like more political risk.

As mining is such a major component of the Australian economy, and almost everything mined in Australia is exported, a weaker dollar compared to the US dollar is therefore something that’s generally wanted by the industry.

Don’t forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Scott Tibballs, currently hold no direct investment interest in any company mentioned in this article.

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Which ASX technology stocks performed the best in 2021? Here’s a look at the five top ASX technology stocks by share price performance.

Australia is home to a thriving tech sector with fresh investment opportunities emerging across a variety of subsectors, such as gaming, fintech, healthcare and cleantech.

The technology sector currently contributes about AU$167 billion to the Australian economy, according to research commissioned by the Technology Council of Australia. This figure has increased by 79 percent from 2016, representing a growth rate that is more than four times that of most industries. In fact, the tech sector is the third largest economic sector in Australia, behind mining and finance/insurance.

Unsurprisingly, many tech stocks on the ASX have performed well in this landscape.


Below the Investing News Network profiles the five best ASX technology stocks in terms of share price performance in 2021. Data for the companies was gathered on December 31, 2021, using TradingView’s stock screener, and all of the best ASX technology stocks listed had market caps above AU$10 million at that time.

1. Novonix

Market cap: AU$4.45 billion; year-to-date gain: 659.5 percent

The first of the best ASX tech stocks on this list is battery technology company Novonix (ASX:NVX), which specializes in developing battery testing equipment for the worldwide lithium-ion battery market. The company was spun out from Dr. Jeff Dahn’s lab at Dalhousie University; Dr. Dahn is one of the pioneers of the lithium-ion battery.

While not yet a revenue generator, the company has benefited from the explosive growth expected out of the fast-moving global electric vehicle (EV) industry.

In December, Novonix announced preliminary results from an environmental impact study; they show the company’s synthetic graphite EV and energy storage system (ESS) battery anode product offers an approximate 60 percent decrease in CO2 emissions, potentially making it “2.5 times better for the environment than Chinese synthetic graphite EV and ESS battery anode material,” as per the Market Herald.

2. Oneview Healthcare

Market cap: AU$114.57 million; year-to-date gain: 488.89 percent

Oneview Healthcare’s (ASX:ONE) interactive software platform offers digital tools to healthcare providers, patients and families to improve point of care outcomes.

This past spring, the global healthcare tech company launched its cloud-based care platform. “Deployed on Microsoft Azure, this platform enables health systems to quickly adopt technology for engaging patients, reducing non-clinical demands on care teams and optimising clinical and operational effectiveness,” notes a press release.

Oneview has signed a number of contracts for the use of this platform, including with Omaha’s Children’s Hospital and Medical Center, Northern Health in Melbourne and Kingman Regional Medical Center in Arizona. In late November, Oneview raised AU$20 million in a private placement with plans to use the funds to further product development, scale its cloud enterprise and strengthen its balance sheet.

3. Emyria

Market cap: AU$105.86 million; year-to-date gain: 318.48 percent

Emyria (ASX:EMD) is a healthcare technology company that specializes in data-backed drug development and operates a network of medical clinics. Using proprietary clinical evidence, the company develops registered treatments for underserved medical needs.

Emyria’s current drug development programs center on cannabidiol (CBD) medicines for mental health, CBD/THC treatments for irritable bowel syndrome and MDMA treatments for post-traumatic stress disorder.

In late November, one of Australia’s largest private investment groups, Tattarang, made a AU$5 million investment in Emyria, which will help the company further advance its drug development work.

4. PlaySide Studios

Market cap: AU$445.38 million; year-to-date gain: 139.13 percent

PlaySide Studios (ASX:PLY) develops mobile games, virtual reality, augmented reality and PC games. The company’s portfolio consists of 52 titles, including original intellectual property games, as well as games developed with the worlds’ largest studios, such as Disney (NYSE:DIS), Warner Bros and Nickelodeon.

PlaySide Studios is Australia’s largest publicly listed gaming technology company, and following its 2020 initial public offering, it generated revenue of AU$10.88 million for the 2021 fiscal year. In November, the company inked a landmark deal with 2K Games, a label of Take-Two Interactive Software (NASDAQ:TTWO).

In the last weeks of 2021, PlaySide signed a number of deals, including a contract with Shiba Inu Games and a partnership with One True King to co-develop a PC-based game, which will also provide access to One True King's 21 million global followers.

5. Universal Biosensors

Market cap: AU$175.98 million; year-to-date gain: 127.59 percent

Last on this list of best ASX tech stocks is medical device technology company Universal Biosensors (ASX:UBI), which develops, manufactures and commercializes diagnostic testing systems for point-of-care providers and at-home use. It has products for blood glucose monitoring, coagulation testing, immunoassays and molecular diagnostics.

“UBI’s biosensor technology platform has been used to deliver more than 10 billion diagnostic tests to patients worldwide generating billions of dollars in sales,” states a company presentation. “We have licensed and partnered new technology and new biosensors with global applications.”

In November, Universal Biosensors signed a three year master collaboration agreement with Mayo Clinic Biopharma Diagnostics. The deal includes work on Universal Biosensors’ Tn antigen cancer biosensor. In late December, the company entered into a global exclusive license agreement with IQ Science for the commercialization of a SARS-CoV-2 N-protein detection test that will use Universal Biosensors' proprietary electrochemical strip and device technology.

Don’t forget to follow us @INN_Australia for real-time news updates!

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

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Schlachta Stanislav / Shutterstock

Looking for the best-performing cobalt stocks on the ASX? Here's a look at the three top gainers of 2021.

Cobalt prices have soared this past year, with investors paying more attention to this battery metal.

A large reason for cobalt’s bullish behaviour is that it is used to manufacture lithium-ion batteries, which power electric vehicles (EVs) — as demand for EVs continues to rise, it's likely cobalt demand will remain strong too.

Currently the future of EVs looks bright — the market is growing quickly and is expected to boom over the next decade. In the first half of 2021 alone, EV sales ballooned by 160 percent, and by the end of the year, a total of 15 countries had announced measures to begin transitioning toward an all-electric future.


The three top cobalt-producing countries worldwide are the Democratic Republic of Congo, Russia and Australia — the last of which is investing in ramping up its production of the metal.

With that in mind, which Australian cobalt miners gained the most value in 2021? Read on to learn more about the three best cobalt companies on the ASX by year-to-date share price gains. All information was obtained on December 30, 2021, using TradingView's stock screener.

1. Jervois Global

Year-to-date gain: 63.89 percent; current share price: AU$0.59

Jervois Global (ASX:JRV) is best known for its Finland operations, which produce cobalt for chemical, catalyst, pigment, powder metallurgy and — most significantly — battery applications. The company is currently in the process of launching its new Idaho Cobalt Operations (ICO) and is on track to become the first US cobalt miner.

On December 15, Jervois announced an update on ICO, saying first ore is expected in August 2022, with sustainable production expected by December 2022. The estimated capital expenditure required to stay on schedule has risen to US$99.1 million, up from US$92.6 million, with mine engineering 64 percent complete.

2. Cobalt Blue Holdings

Year-to-date gain: 177.78 percent; current share price: AU$0.50

Cobalt Blue Holdings (ASX:COB) is a rare cobalt-only company, and defines itself by its planned ethical and sustainable extraction and production processes. The firm's flagship New South Wales-based Broken Hill project is slated to produce an average of 3,500 to 3,600 tonnes per year of cobalt once in operation.

In December 2021, Cobalt Blue Holdings announced it has executed a memorandum of understanding with the State of Queensland, acting through the Department of Resources, to assess opportunities for the recovery of cobalt (as well as any coexisting base and precious metals) from mine waste.

3. Australian Mines

Year-to-date gain: 31.25 percent; current share price: AU$0.21

Australian Mines (ASX:AUZ) is aiming to supply metals to the growing EV industry, with a focus on ethical and sustainable production. Its flagship Queensland-based Sconi nickel-cobalt project boasts a mine life of over 30 years and will be capable of processing 2 million tonnes of ore annually.

In late October, Australian Mines reported on its quarterly activities, including an agreement for Korea-based LG Energy Solution, a top global producer of EV batteries, to buy 100 percent of the Sconi project’s nickel-cobalt hydroxide output over an initial six year term. The future agreement indicates that LG Energy Solution will buy a projected 7,000 tonnes of cobalt from Australian Mines over the six year period.

Don’t forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Isabel Armiento, hold no direct investment interest in any company mentioned in this article.