Interview with Gary Adshead, 6PR Mornings

Gary Adshead
Critical minerals and rare earths; gas prices

GARY ADSHEAD: You remember the gold rush. In some ways that helped shape this State to no end. And then you had the iron ore, and those two resources have put Western Australia on the world map in terms of resources. Well, there’s another one coming. There’s another one coming. And I don’t think a lot of people quite understand the significance of it at the moment, and there’s a Summit on, actually, over east today in Sydney, which is looking at where Australia is and, of course, because of that, by dent of that, because of how much we have here, where we sit with critical minerals and rare earths and the – well, digging them up, exporting them or keeping them here and using them for the sort of products like lithium iron batteries that are becoming such a big deal as we try to head towards a greener planet.

Now, Madeleine King is the Federal Resource Minister and she’s over there to pitch for WA, and she joins me on the line. Thanks very much for your time today, Minister.

MADELEINE KING: Pleasure. Good to speak to you again, Gary.

GARY ADSHEAD: Now, these are sort of very stirring words that the critical minerals industry could be the opportunity of the century, says Jim Chalmers. Just take us through, you know, Western Australians should be excited by this.

MADELEINE KING: Absolutely. And the thing about Western Australia, you know, our great home state, is we’ve led the way in developing the resources industry right from the get-go. So if you think back to the work that former State premiers and ministers have done in developing the iron ore industry, you know, way back in the late 50s and 60s, it was a combination of determination by premiers and government ministers coupled with working with the Federal government of the day as well as international investment and then just the really hard work of getting the iron ore industry going. So, we’ve got this model that Western Australia built, and we can apply it to critical minerals and rare earths. And that’s what I’m excited about as an incoming government, that we can refresh the critical mineral strategy and Western Australia will play, you know, an enormous part of what will be a new resources economy.

GARY ADSHEAD: How far down the track are we with that? Because obviously China is the biggest producer at the moment in terms of manufacturing lithium iron batteries et cetera. How far away are we from being able to sort of manufacture, to produce products here?

MADELEINE KING: Yeah, look, it’s fair to say we’re well behind China in this regard. They’ve, you know, really ramped up their critical minerals industry and there’s battery production as well as the gigafactories they’re doing for these factories. Importantly, the US is also flying ahead on this front, too. And it’s really important that we support those supply chains in the US and also our partners in Japan as well to sort of make sure there’s resilience in that supply chain and not all the world is dependent on one, you know, producer of batteries. So we can do that right now with the minerals we’re extracting and moving along the processing plant. But we do have a lot of work to do in getting to the battery-building stage. But there’s a lot of work going on. This government has a batteries strategy. We’ve got the National Reconstruction Fund which will have a heavy focus on that kind of industry, which will be, you know, government backing of not just batteries but the stages along that processing, the value-adding in resources from the processing of rare earths to going along to making the anodes and cathodes that go into the final product. And that’s what we really need to focus on – that value-add part of the equation that adds, you know, really good jobs but also really good export dollars for the state and the country.

GARY ADSHEAD: What sort of interest are you getting from around the world in terms of what our – what this could mean for Australia, and obviously I know that Jim Chalmers talks about providing our friends with another option in relation to where they’re buying their resource from.

MADELEINE KING: Well, it’s actually quite staggering, Gary. There is interest from everywhere. The European Union is very interested. You know, Europe hosts a lot of carmakers. It has made really progressive steps to move into, you know, a hundred per cent of production around electronic vehicles within the next 10 years, or even less for some of those manufacturers. So they’re going to need the products we have, like lithium and cobalt and so forth to go into those batteries. But then there’s also – I was in Japan just last week and I met with – just for one example – Panasonic, who have a battery factory in Nevada, and they’re taking, you know, nickel from the BHP’s Nickel West refinery in Kwinana into batteries for Tesla that are getting sold around the world. So, we’re already participating in that value chain, but the demand is great. And that’s why it’s important that critical minerals strategy and partnership that I recently signed with the relevant ministry in Japan, it’s going to be so important. Because we want their government and their companies to invest in Australia just like they did with iron ore and LNG and [indistinct] into not only our net zero ambitions but also, very importantly, theirs.

GARY ADSHEAD: But obviously we export – I think we’re the largest exporter of lithium in the world. When do we get to a point when we can say it’s staying here and we’re going to be in that business, in that competitive world of actually manufacturing the products that come from it?

MADELEINE KING: We’ve got to invest in those next stages, like you pointed out. It’s absolutely right. We’ve got to invest in more refining, but then the production of those next stages. And work is happening on that already. There’s already a cooperative research centre around the battery industry located out at Curtin University, which is, you know, setting the standard on how we might create a battery industry. So it won’t happen overnight and it won’t happen by luck – it will happen by hard work. This government is up for it. We’ve got to, you know, corral some horses, so to speak, you know, whether it’s private investment – or definitely private investment but international investment as well, and also intellectual property from other countries. Because we know there’s not always much point in re-inventing the wheel. So importantly we have like-minded partners in Korea and Japan and the US that have already been working this technology for some time, so we want them to come over and not only bring their capital but bring their know-how so that we learn from it and build this industry ourselves. But, you know, I admit it’s not going to happen overnight, but we’re determined to make it happen.

GARY ADSHEAD: And just finally before I let you go, obviously, you know, there’s an energy crisis issue that the government is still working on in terms of, you know, perhaps bringing down the price of gas, electricity on the east coast we talk about mainly on that one. I don’t know whether you want to give me an idea about how far away you are with unveiling something there but also just in terms of, you know, this industry, what we’re talking about now. You know, you do have to be careful not to send signals to the world that you’re prepared to drop taxes on, you know, the gas industry, for example, because any investment coming into Australia could get nervous about that.

MADELEINE KING: Yeah, absolutely. I mean, my, you know, firm belief is that we don’t get to a net zero economy in Australia or the world without the resources sector of Western Australia and Australia. So we have to make sure we absolutely preserve our reputation as a reliable and trusted partner to supply energy to international partners so we can get investments for this next wave of development in our country. So, you know, we are working, our departments, all our staff are very busy trying to come up with a reasonable answer that will help consumers across the east coast in addressing, you know, what is an extraordinary rise in the price of gas and, therefore, electricity here. And that’s a complicated matter, so we’re not going to announce anything before we’re ready to. But –

GARY ADSHEAD: Before Christmas?

MADELEINE KING: Well, I hope so, because I can’t wait to get to Christmas so I can spend some time on the beach back in Shoalwater, Gary. I really want to make sure – and, you know, people need certainty around their energy prices. And, you know, we’re pretty lucky in WA; we’re a bit – not entirely ring-fenced from it but we have invested a lot in our electricity market and our gas supplies that means it’s a little bit simpler over there. But, you know, equally, we have some challenges as well. But the east coast is a very challenging market.

GARY ADSHEAD: Minister, I appreciate your time out of your busy day. Thank you very much for that.

MADELEINE KING: Yeah, no worries. Thanks