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Clock’s Ticking on our Opportunity as a Critical Minerals Superpower

Originally Published in The West Australian on Saturday 24 June as Australia not assured of superstar status in batteries race.

This week’s launch of the Commonwealth Government’s Critical Minerals Strategy highlights not only the tremendous opportunities that lie in front of Australia but also the risks of failing to fully capitalise on them.

The Strategy, which has been cautiously welcomed by the mining industry, outlines the genuine opportunity and ambition for Australia to leverage its critical minerals to become a “renewable energy superpower” and a major contributor to global decarbonisation efforts.

However, there is a real risk that if Australia doesn’t act fast, our natural advantages will not be sufficient to stop others stealing our thunder. Having resources in the ground is one thing, what you then do with them is another.

The scale of our opportunity is not in doubt. As the world adopts clean energy technologies, the International Energy Agency forecasts massive global growth in demand for the minerals in high-performance batteries (lithium, nickel, cobalt, manganese and graphite), rare earths in wind turbines and electric cars, and copper and aluminium for expanded electricity networks.

Australia, and Western Australia in particular, is well-positioned to respond to this generational opportunity. We have incredible natural endowments of all the minerals required for decarbonisation, and our nation has truly become a global centre of excellence for responsible mining. Our existing workforce is highly skilled and we have internationally-renowned educational institutions (including in WA) that can prepare the next generation, including in skills such as automation and data analysis. 

We’ve even seen some early evidence with lithium and nickel processing that Australia might, at last, be able to build on our mining excellence and participate in the downstream processing of our minerals into more refined products and metals. These opportunities hold the promise of growing jobs and prosperity through the energy transition.

Topping that all off, we have political stability and a mostly transparent and well-understood royalty regime that have historically made us an attractive investment destination. Not all competing countries, particularly within the battery and energy materials space, can say the same.

So what’s the problem? With these ingredients, surely our “superpower” status is assured?

Unfortunately, the rest of the world is responding more quickly and aggressively to the challenges and opportunities ahead. Many would have heard about the US Inflation Reduction Act, and the hundreds of millions of dollars in incentives it provides for companies to develop green energy projects, diverting attention from Australian projects.

However, similar actions are being taken across our region, with governments directly investing in critical minerals processing in Japan and Korea. Even the often slow-moving European Union has beaten us to the punch with its Critical Raw Material Act unveiled in March, which incentivises local production and provides a reduced administrative burden for critical minerals mines and processing.

Further, while Australia can lay a realistic claim to be the world’s best miners, we are still beginners in downstream processing. We also have relatively high energy and labour costs compared to some competing jurisdictions along with ever-lengthening approvals timeframes.

And, as the last couple of paragraphs have made clear, global competition for investment in projects has never been hotter.

Australia has the right ambitions but we must now demonstrate a willingness to take the action required to achieve them.

As a Western Australian, Resources Minister Madeleine King clearly ‘gets it’. However, politics is a numbers game, and it is not clear that the magnitude of this challenge and opportunity is understood across a Cabinet dominated by eastern states MPs.

No one should suggest that Australia splash around billions of dollars like the US, contributing to its seemingly endless debt-funded deficit.

However, Australia must commit to more modest yet still effective action. This should include direct and targeted financial support to downstream processing projects, investment in needed power and water infrastructure, and continued focus on streamlining and prioritising approvals for green energy projects. Australia should also join our major trading partners by adding nickel and copper to its critical mineral list, a no-brainer that the strategy inexplicably defers for consideration in a later process.

If we want to achieve “superpower” ambitions, then the Government, from the Prime Minister down, must quickly turn strategy – in the context of this week’s event, a Strategy – into real action. Collaboration between all levels of government should be part of that.

Australia continues to be a lucky country but luck alone can’t drive our prosperity and support global decarbonisation.

Simon Corrigan is the Founder and Partner of Perth-headquartered Corporate Affairs Australia. He spent nine years working directly in the mining and resources sector, including as Head of Community and Indigenous Affairs at BHP.