Australia can build a robust future with our critical minerals
The heightened demand for critical minerals has pushed up the price of raw materials, potentially reversing the progress of clean energy technologies. The acute supply shortage has major implications on the financing needs across the world.
Global management consultancy Partners in Performance believes that Australia could play a key role in stabilising the global markets and supply chain for these critical minerals.
Australia clinched the top spot globally for mining investment with its attractive policy and mineral potential. The Fraser Institute’s 2021 Investment Attractiveness Index has revealed that Western Australia has come in first place (from being fourth in 2020), while South Australia is ranked in the top 10 globally.
“Australia can attest to sourcing for minerals in environmentally and socially responsible ways with its strong and efficient regulatory environment,” said Michael Huggins, Director and Head of Australia and New Zealand at Partners in Performance. “Workers involved in the sector are also protected. This sets Australia apart from its competitors that may operate at a lower cost, but at the expense of the environment or its workforce.”
The government reiterates this by working closely with states and territories in developing a national ethical certification scheme for critical minerals.
Huggins also acknowledged that Australia is home to the world’s largest supply of four critical minerals — nickel, rutile, tantalum and zircon — and among the top five in the world for its supply of cobalt, lithium, copper, antimony, niobium and vanadium, positioning the nation as the main contender in the critical minerals sector on a global scale. As the term ‘critical minerals’ suggests, these minerals are critical in the long-term goal towards cleaner energy in the manufacture of batteries, electric vehicles, solar panels, turbines to harness wind energy and consumer electronics.
The Australian Government’s 2022 Critical Minerals Strategy will set the stage for Australia to develop a thriving and durable Australian critical minerals sector through a lens of sustainability, to meet global market demand. As part of this initiative, the mining sector must look at the application of clean technologies while adhering to ESG standards.
“As Australia positions itself in becoming the critical minerals powerhouse supporting clean energy technologies, the growth and expansion of downstream processing is expected to be phenomenal with the creation of about 52,000 jobs in regional areas,” Huggins said. “Apart from boosting the economy, it will breed a new generation of high-skill, high-tech jobs.”
The government clearly recognises the potential that Australia holds in the critical minerals mining sector. However, more investment — especially from smaller and mid-tier mining and exploration companies — to increase production and meet global supply chain demands will help Australia lead the way in critical minerals supply by 2030. The AU$2 billion that has been set aside for this will give small and medium-sized mining companies access to increasing domestic production.
“Incentivising programs and encouraging mining companies to install or repurpose existing equipment or facilities to produce critical minerals, and increasing the budget for research and development in the sector, would enhance Australia’s role in stabilising the critical mineral supply chain market,” Huggins said. “These factors, riding on the backbone of Australia’s reputation for environmentally and socially responsible governance, would propel Australia into being at the forefront of the critical minerals mining sector.”
The commitment of local mining companies to greener production of critical minerals is evident in two recent projects involving Partners in Performance. These include an old mining site that has since transitioned to harnessing solar and wind energy, and now powers 70% of its total energy needs, as well as a greenfield mining project that will be carbon net zero when built.
Solutions such as these are crucial at a time when a growing number of organisations are considering alternative energy sources across all industries. Boards of directors and CEOs, including those within the mining sector, acknowledge climate change as a source of material risk and a major corporate challenge.
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