I am reading a lot about the possibility of a second commodity boom in WA through lithium used in electric vehicles and the big push from all of the global and major car manufacturers to electrify fleets within the next 5-10 years.
How much sense does it make to invest in a mining town today?
I am from Sydney but want to explore opportunities to capitalise on the possible growth in the mining town of Greenbushes, WA.
What areas make sense to invest in? Should it be Greenbushes or Bridgetown (15 kms from Greenbushes)?
Is that region even worthwhile to invest in? Should I look at some totally different region?
What else should I watch out for?There are two major lithium producers in WA The Galaxy mine in Mount Caitlin and Greenbushes, with another 3-4 mines either under consideration or construction in the state. The single biggest investment is in Kwinana with the 400$m lithium refinery that is currently under construction. Lithium is not a rare metal, and is usually taken from salt.
Both of the above towns are very small in size. To do well, you are looking for a constrained land supply. This is what caused both Hedland and Karratha to do well. You don’t have this situation in either of these towns. In Green bushes there is a myriad of surrounding towns to commute from.
Go back to fundamentals. You are taking the buy and hope approach. Look to manufacture wealth in a well located property. This way you can take a cut of equity from the manufacture and if you have purchased in a good area, you will also get capital growth as well.
Thanks, so what neighbourhoods make sense to invest in? Is Bridgetown a good investment? I am not exactly sure what West Aussies deem as an acceptable distance to travel since the point you make about a good location would make me want to check Augusta or Margaret River out too.
Thoughts?
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