Speech to The Australian/PWC Critical Minerals Summit
I would like to begin by acknowledging the Gadigal people of the Eora Nation, the traditional custodians of this land.
I would also like to pay my respects to Elders, past and present. I extend that respect to all First Nations peoples in the audience today.
First Nations Australians are the custodians of the land on which many resources projects are located.
Together we all have an important role to play to ensure First Nations Australians sit at the table as a valued partner in all discussions and decisions.
Thank you to The Australian and PwC for convening this inaugural Summit.
It provides an opportunity to discuss Australia’s critical minerals industry and share ideas about the development of the sector.
As Minister for Resources and Minister for Northern Australia, my role sits at the nexus of important elements of the Australian Government’s agenda:
- Economic growth;
- Regional development;
- Supporting the growth of new industries in the North;
- Implementing the Uluru Statement to the Heart and enshrining a Voice to Parliament;
- And of course, achieving net zero and supporting the clean energy transition.
Across Australia, and particularly in the North, we are blessed with an enormous amount of resources.
We are a trading nation. That is how we pay our way and generate prosperity.
The resources sector has repeatedly come to the nation’s rescue during economic downturns.
It accounts for our three largest exports.
Each of them – coal, iron ore and liquefied natural gas – are of enormous strategic importance to those nations we export them to.
About half of our coal exports are metallurgical coal which, with iron ore, is still essential for producing steel at scale.
Our resources help other nations to make steel to build cities and to power them.
Steel is also the main material used in constructing crucial sources of renewable energy – solar, tidal, geothermal and wind.
Copper and nickel are also essential to the wires, batteries, magnets and semiconductors that power clean energy technologies.
The resources industry directly employs more than a quarter of a million people in Australia. In my home state of WA it is the second largest employer after the public sector.
The iron ore industry of Australia, which generated $134 billion for the economy in the last financial year was built on three pillars:
- Nation building policy reform, ending restrictions on exports brought in during the war.
- International investment from countries like Japan. Companies like Mitsui were among the first to invest in iron ore and secure the original cargoes of ore from the Pilbara.
- Hard work: miners and working people created a new industry. Political leaders like David Brand and Sir Charles Court sought and got federal policy reform and built relationships with Japanese industry that endure to this day.
We are indeed lucky to be living in a land of such vast natural resources cared for by its Traditional Owners for over 60,000 years.
I recently stood at the edge of the Mount Whaleback iron ore mine in Newman.
At an overwhelming five kilometres long and 1.5km wide it is the largest open pit iron ore mine in the world
Iron ore from Mt Whaleback combined with coal from the east coast of Australia literally rebuilt Tokyo and helped construct the great cities of China.
Knowing this and seeing that mine, it is difficult to overstate the contribution our resources sector has made to the region over many decades.
But it was not simply luck that has literally transformed these resources into the great cities of Asia and brought such great prosperity to Australia.
Our traditional resources sector will continue to serve us well while we turn increasingly to the extraction and development of critical minerals.
The resources sector understands the need to reduce its own emissions and has committed to do so.
But it is not widely understood how important the resources sector will be in reaching our global emissions targets.
We have to increase this understanding because an essential part of the ongoing success of our resources sector is having public support.
We must emphasise repeatedly that mining supports the way of life Australians enjoy and is vital for effective climate action.
Our resources are central to the global energy transition required to reach net zero emissions by 2050.
Without mining there will be no net zero.
Achieving net zero will involve more mining, not less.
Advancing our resources sector in a sustainable way that meets our net zero objectives will involve hard work from governments and industry.
But hand in hand with this is the pressing need to increase the understanding and appreciation among the general public of the sector’s importance.
The role of critical minerals
For the world to achieve the global Paris goals, low emissions technologies will need to be adopted across all sectors of national economies.
And a great deal of the clean energy transition over the coming decades will ride on the back of critical minerals.
These minerals are essential to such things as storage batteries, electric vehicle motors, solar panels and wind turbines.
They are driving radical change in the technologies that power our homes, offices, factories, vehicles and communication devices.
They are essential inputs for a range of advanced manufacturing, aerospace and defence applications.
Demand for these technologies is projected to skyrocket over the next three decades.
This means more demand for lithium, cobalt, graphite and rare earth elements, among others.
So while the global transition to net zero is a great challenge it is also an enormous opportunity for Australia – for our resources sector and the workforce it supports.
The focus on the extraction and refining of critical minerals needs to become, I think, something of a national mission, akin to the foundation of our iron ore industry in the 1950s and our LNG export industry in the 1990s.
While companies like Japan’s Mitsui purchased some of the first iron ore exports from the Pilbara in the late 1950s, now in 2022 these companies now want to work with us again as we confront the challenge of building a new industry and supply chains around critical minerals.
Our nation produces about half the world’s lithium, is the second-largest producer of cobalt and the fourth-largest producer of rare earths.
As well as being central to our future energy needs, critical minerals play an important role in many other ways.
Permanent rare earth magnets are a key component of the motors used in robotics applications.
They are increasingly integrated throughout consumer electronic products such as hard disk drives, mobile phones, and video and audio systems.
Gallium, silicon and indium are required to produce the touch screens of the smart phones we all use. Lithium and cobalt are also used in their batteries.
A number of critical minerals are involved in the diagnosis and treatment of disease including the rare earth element gadolinium used in MRIs.
Lithium is used in medical implant batteries.
Platinum is used in pacemakers and medical apparatus and titanium for artificial joints, prosthetic limbs and surgical equipment.
Nations have to be ready to defend themselves and permanent magnets have many military and aerospace applications.
Manganese is used in jet engines; vanadium for armour plating; and scandium in jet aircraft.
You don’t get all these things and their benefits without mining.
To meet this challenge the Government is developing a new Critical Minerals Strategy.
The strategy aims to:
- Create economic opportunity – including for regional Australian communities;
- Develop new sovereign capabilities and industries – including growing our downstream processing and manufacturing capacity;
- Build reliable, competitive and diverse supply chains – including through international partnerships and investment;
- Support clean energy technologies and
- Ensure high environmental, social and governance credentials, including genuine partnership with First Nations Australians.
The strategy will be developed in consultation with stakeholders – to ensure we hear the industry’s views on challenges and solutions that can inform Government policies.
As I say. There is an urgency to this work. We have little time to waste.
Supply chains, partnerships and domestic opportunities
Australia’s critical minerals will play an important role in the security of our international partners, by establishing new sources of supply and diversifying supply chains in concentrated markets.
As the Treasurer said earlier, diversifying supply chains is about making these markets stronger, more efficient, more resilient and more transparent.
Australia can have a big global impact but we need to work with like-minded economies across the region.
Partnerships that increase investment in critical minerals projects will bring clean energy products to market faster.
Last month, I signed a new Japan-Australia Critical Minerals Partnership with Japan’s Ministry of Economy, Trade and Investment.
Through this Partnership, we will be able to facilitate Japanese investment in Australian projects to support the further development of our domestic critical minerals sector while securing the supply needed for its advanced manufacturing industries.
Japan, with its advanced manufacturing sector, has an insatiable demand for our critical minerals.
During my visit to Japan just over a week ago, tech company Panasonic explained how they were using WA nickel sulphate to make batteries in Nevada for Tesla EVs.
That’s nickel sulphate from BHP’s Nickel West refinery in my electorate of Kwinana, going into batteries in Nevada. That are then being shipped all over the world in new Teslas.
This Government wants to see more processing of critical minerals happening here in Australia and is supporting the capability for domestic projects.
This fits in with our plan to strengthen the sovereign capability of Australian manufacturing.
And the market is moving to capture these opportunities.
For example there are three lithium hydroxide processing plants currently in operation, construction or advanced planning in Western Australia:
- The Tianqi Lithium Energy Australia’s Lithium Hydroxide Refinery at Kwinana, which will produce 24,000 tonnes per annum once fully operational;
- The MARBL Joint Venture refinery at Kemerton between Albermarle and Mineral Resources, which will produce 50,000 tonnes per annum once fully operational; and
- Covalent Lithium’s proposed refinery, also at Kwinana.
In the rare earths sector, Australia is currently only involved in mining and beneficiation stages of the lengthy and complex rare earths supply chain.
But Lynas’ Kalgoorlie Project and Hastings’ Yangibana Project are working to capture the next stage onshore, namely cracking and leaching.
Lynas is the largest integrated rare earths producer of its kind outside China.
It is building a new Rare Earths Processing Facility in Kalgoorlie to process the rare earth concentrate from its Mount Weld mine.
The facility will crack, leach and upgrade the rare earths concentrate from Mount Weld that is currently exported to the Lynas Advanced Materials Plant in Malaysia.
And the establishment of Iluka Resources Eneabba Rare Earths Refinery Project in Western Australia will help move further downstream to the production of rare earth oxides.
The Government is supporting the development of this facility with the approval of a $1.25 billion loan through the Australian Government’s Critical Minerals Facility.
Once operational it will be Australia’s first fully integrated rare earth oxide refinery.
The refinery will be designed to have the capability to process multiple rare earth feedstocks – creating a market opportunity for other rare earth projects, as demonstrated by the recent partnership between Iluka and Northern Minerals.
This partnership will see rare earths from the Northern Minerals Browns Range project processed at Iluka’s Eneabba refinery.
Australian Strategic Metals is also taking steps to support supply chain diversification through the development of the rare earths Dubbo Project in NSW.
These rare earths will be processed into metals at ASM’s Korea Metals Plant.
In the October Budget the Government also allocated $50 million over three years to the Critical Minerals Development Program for competitive grants to support early and mid-stage critical minerals projects.
This funding builds on the $50 million recently committed to six key projects across Australia as part of Tranche 1 of the program, leveraging over $143 million in private sector co-investment.
We are also investing $50.5 million over four years for an Australian Critical Minerals R&D Hub to help unlock our nation’s critical minerals potential.
The hub will bring together Australia’s world-leading government science agencies to address strategic technical challenges.
The Government’s contributions are intended to catalyse private sector investment, which continues to step up.
For example in July, alongside US Secretary of Energy Jennifer Granholm, I was pleased to witness the signing of a memorandum of understanding between Australia’s Arafura Resources and major US company General Electric, in the margins of the Sydney Energy Forum.
As well as the binding offtake agreement, Arafura has since entered a supply agreement with Hyundai Motor Company and Kia Corporation.
Arafura will supply up to 1,500 tonnes per annum of NdPr (Neodymium-Praseodymium) oxide (or equivalent NdPr metal) from its Nolans Project over a seven-year term. This is expected to commence in 2025.
And project financing for Hastings’ Yangibana rare earths project is underpinned by its binding offtake contract with Thyssenkrupp.
It is the Government’s aim that precursor products will be made here and, eventually, technologies like solar panels, magnets and batteries.
The Australian Government is determined to make Australia a clean energy superpower.
Unlocking the full potential of our critical minerals endowments is a core part of that.
Our critical minerals endowment provide us with a remarkable opportunity as well as a special responsibility to the future of this nation and also that of our regional partners.
Fortunately we been here before.
Unlocking the vast iron ore deposits of the Pilbara required visionary policy, international investment and cooperation and hard work.
Achieving our goals will require great effort over the coming decades, underpinned by a new collaboration with international partners and investors.
We have done this before. We can do it again. It is more than just luck.
The Government is aware of the magnitude of the challenge ahead to extract and refine these valuable minerals – and we will work with the sector to make sure we meet that challenge.
We are right behind the critical minerals sector and want to ensure it prospers.
The sector has an important global role to play at the same time as providing great economic benefits for Australia.