Economic Analysis of A-Cap Energy Limited: An Australian Case Study

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Economics for business
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Table of Contents
Executive summary..................................................................................................................................3
Introduction................................................................................................................................................4
Introduction of company...........................................................................................................................5
Industry Background................................................................................................................................6
The Market structure of the industry......................................................................................................7
Factor that influences the demand of the company's product............................................................8
Factor that influences the supply of the company's product.............................................................10
Elasticity...................................................................................................................................................12
Impact of an Event on the industry or company.................................................................................13
Conclusion...............................................................................................................................................14
Reference................................................................................................................................................15
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Executive summary
This assignment is drafted to analyse the concepts of the economy in the practical
perspective of a manufacturing company engaged in the energy industry of Australia.
During the assignment demand and supply are evaluated and influencing factor also
identified which can impact on the performance of the company. The company further
identified issues or event conducted in the Australian market which can impact on
demand of the goods or products of the company in the market. The whole study
critically evaluated the economic aspects of an energy manufacturing company and also
industry to understand the various concepts and their practical impact on the company
in the market.
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Introduction
This assignment is conducted to enhance the conceptual knowledge of economy in
reference to the company. To justified conceptual and theoretical knowledge in practical
aspects of the company this assignment evaluate the practical aspects of demand and
supply and other economic factors in reference of A-Cap Energy Limited which is
worked in the energy industry in Australia. During the study, some of the economic
factors are identified which had a major impact on demand or supply of the company's
product in the market for the company. This whole study summarizes economical
concepts and their applicability on business activities in the market so that the company
can achieve its goals and satisfied their stakeholder in the market.
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Introduction of company
A-Cap Energy Limited is an Australian company which is listed in Australian stock
exchange. The company engaged in the process of mineral exploration activities in
which the company had diversified mineral strategy for its operational activities in the
market. The company mainly focused on a diversified strategy which helps them in
focus on the cobalt-nickel laterite project. The primary aim of the company is to provide
or supply cathode material in the battery industry (Acap, 2019). The company explores
various kind of minerals such as uranium, coal, and base metal which provide them
diversified mineral portfolio to maintain its market share in the industry. The company
holds 1 mining license and 12 prospecting licenses covering approx. 8,499 square
meters in Botswana. In the initial stage, the company is named as A-cap resources
private limited who is changed and now company known as A-cap Energy limited.
Name of the company is changed in November 2018.A-cap energy company is the
company which is listed in two traded stock exchange which is as follows:-
 Frankfurt Stock Exchange
 Botswana Stock Exchange
In near future board of the company look for the expansion of the business line and their
market segment in which they are looked for cathode material supply in OEM
automotive and battery industries (Bloomberg, 2019). The company now set for
designing new strategies and commercial relationships among the market to take
advantages in new material acquisition and refinery technologies in the near future for
the growth of the company.
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Industry Background
The energy industry is a highly dynamic industry which had a major change in the
recent time period which make them complex for the company to anticipate their
activities in the market. As the company had a major product as cobalt so in cobalt
industry there is a significance dynamic increase in the demand of product due to
increase EV battery in the market. Cobalt as the supplement part which is used in the
batteries this industry is highly inpac6t from the battery industry. McKinsey Minespan
estimates for future trends of market and industry in which he indicates that industry can
be add capacity expansion of between 110 and 120 kt by 2025 which can be a major
statement. This statement indicates that there is a probable change of the growth in the
market which can be utilized by the company for their respective goals and targets. The
DRC represents 70 % of global mine supply of cobalt which means there is a single
competitor are taking the major share of supply of material in the market. This kind of
activities majorly impacts on the supply of the goods which indicates an opportunity of
supply of goods or product in the market on the time of shortfall in supply of cobalt in the
industry for the company.
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The Market structure of the industry
The energy market is a dynamic market which is revolving on a speedy pace. The
market can majorly impact on various factors which can be a technical, economic and
environmental factor. The environmental factor is the most impact full factor which can
draft trends or movement in the industry for energy (Gomez-Exposito et. al, 2018). The
company operated its business in providing supporting material for the battery industry
for OEC car batteries. A major dimension of the company is a car factory so due to
recent changes in the market of car manufacturing or battery manufacturing highly
impact on strategic decision of the company in the market. The energy market is a
highly complex and dependent market on the market of a product like a car which is
used energy product of the company in manufacturing activities of their goods or
products. Energy industry highly motivated industry in new sources of energy as in
current scenario company is more move toward the solar energy and their better
utilization through battery equipment in the market so that company can identify
unlimited resources for energy generation for their products in the market.
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Factor that influences the demand of the company's product
A-cap Energy limited works in the field of energy various many of the factors exist in the
market and environment which can affect the decision making of the company and also
impact on the demands of the products in the market (Twidell et. al, 2015). The
company used to identify a checklist for the factor which can be impactful for the
demand of the products in the market. Products of the company are used in battery
industry so that some of the factor which can impact on battery also a major factor
which can influence the demand of the products of the company in the market.
Interest rate
The company is engaged in heavy products projects of energy in Australia which
needed high fund for their operational activities and also the products of the company
are needed high fund for purchase by the car or battery manufacturing companies for
their products in the market. The interest rate can influence the cost of their fund and
also impact on the demand of the products as a company are not able to maintain their
working capital fund which can impact on demand of the raw material like cathorate
mineral for a battery of the car.
Price of the goods
There are many of the companies are exist in the market which can provide the
batteries material to the battery manufacturing company for the car. Price of the raw
material can define as the major element which can impact on the demand of the goods
in the market. Demands of the mineral are highly depended on the price of the product
as the customer is more sensitive for the price of raw material for their production
activities in the market.
Availability of minerals
Availability of the minerals can be a major factor which can impact on the demand for
the goods in the market. Mineral of the company is used to energy generation in battery
equipment which needs to be available for the battery manufacturing company in the
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market. Thus the availability of the good can increase the demand for the product as
mineral industries in the energy market are highly demanded their products in the
market. Over availability of the minerals in the industry can reduce the demand of the
goods or products of the company in the market and also impact on the revenue
generation of the company in the market for the achievement of their respective goals
and objectives.
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Factor that influences the supply of the company's product
Supply is the major part of any of the industry in the market. It helps to maintain the
demand for the products in the market so that a better equilibrium can be defined in the
market for the products of the company. There are many of the factors are exist in the
market which can impact on the performance of the company in the industry and also
impact on the supply of the goods in the market (Lenzen et. al, 2016). Some of the
factors can be related to the capability of the company and some of the factors exist in
the market which restricts the supply of the goods in the market for the company. Here
some of the factors are recognized which can be impactful for the supply of the goods in
the market for the company.
Financial fund Cost
A-cap Energy limited is a company which engaged in heavy cost project for which they
need a high amount of fund for their business activities. The company needs to maintain
its fund for their working capital requirement of the production activities in the market.
The company can be majorly impacted through the financial cost of the company which
can majorly impact on the supply of the goods due to a shortage of the fund for their
production activities. If the company had limited sources for fund their production
activities which indirectly impact on a number of supply of finished goods in the market
for the company.
Mining rule and regulation
Minerals for the company are collected or acquire from the mine which had limited due
to natural reason. Australia government imposed various duties and rules on
consumption or utilization of natural resources of the company in the market. This kind
of activities limited the utilization of resources and due to unavailability or limited
availability of material resources company are not able to deliver adequate supply in the
market. This factor also impacts on the strength of the supply of the goods by the
company in the market. Mining rule and regulation limited the utilization of the
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resources which control production activities and also impact on the supply of the goods
in the market for the company.
Demographical barriers
Demographical barriers are the major factor which can impact on the performance of
the company in term of supply of the goods in the market. The raw material for A-cap
Energy limited are driven from natural resources and all the places are not the same
due to demographical barriers (Prasad et. al, 2017). Further, the company needs to
acquire material or minerals for their production activities which can majorly impact on
the cost of the production and also overcome the supply rate of production activities of
the company.
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Elasticity
The energy industry is highly influenced by the various factors which limited the demand
and supply of the goods in the market. Elasticity defines the anticipated change in the
demand as compared to supply or the change in the price of the goods in the market. A-
cap Energy limited provides the cathorate product which is used in battery Production
Company so the demand of the goods always had irrelative elastic as compared to the
price of the goods in the market (Kimberly, 2018). Further supply can highly impact on
the price of the goods in the market so that demand in the context of supply had relative
elasticity for the goods or finished goods of the company in the market.
This indicates that goods of the company are highly related to the supply of the goods
and demand of the product are not more fluctuated in the market that why the company
had inelastic demand for the price of the goods (Kimberly, 2018). Due to the necessity
of production activities of battery industry company demand is always constraints for the
market it not highly impact through the price of the goods in the market.
Company had major impact of demographical or geographical limitation for their product
s in Australian market further the rules and regulation of government for the utilization of
resources in the market play major role in supply of the goods in the market and also
the reason for high demand in the market for the goods of the company (Lu et. al,
2017). The demand of the product is majorly impacted through the price of the goods in
the market as a company not want to bear the heavy cost on raw material for their
battery manufacturing unit which decreases the demand of the goods in the market and
also impacts on marketing performance of the company.
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