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CriticalMinerals Summit: Rare Earths gateway to next boom, Jim Chalmers says
THEAUSTRALIAN.COM.AU
Watch live: Treasurer Jim Chalmers at Critical Minerals Summit
FederalTreasurer Jim Chalmers. Picture: Arsineh Houspian
EXCLUSIVECHIEF POLITICAL CORRESPONDENT
@Chambersgc
9:30PM NOVEMBER 24, 2022COMMENTSJim Chalmers has outlined his vision for a foreign investmentboom in critical mineral industries to seize the “opportunity of the century” andprevent Beijing from controlling the global tech supply chains of the future.
Speaking at The Australian-PwC criticalminerals summit in Sydney on Friday, the Treasurer warned that Australia mustbe “clear-eyed about the fact that more and more critical minerals will becomea locus of geo-economic competition”.
Dr Chalmers says that countries mustavoid the pitfalls of a concentrated global market.
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China currently dominates the mining ofrare earths, tech supply chains from start to finish and the processing oflithium, despite Australia being the world’s largest producer of the mineral.
“In 2022, you don’t need to look thatfar back or that far forward to appreciate the challenges and risks that suchconcentration can pose,” Dr Chalmers said. “This kind of concentration createssupply chains that are especially vulnerable to disruption – with economicconsequences that are far-reaching and deeply-felt.
“What we are seeing with the supply ofgas now, we have seen plenty of times before with supply of oil – where supplyand price become hostage to geopolitical competition, conflict, orcircumstance. Right now, the world’s getting a reminder in real-time of thecosts and consequences of over relying on a substantial supplier of a criticalresource.”
China produces three-quarters of alllithium-ion batteries, builds more than half of the world’s electric vehiclesand boasts 70 per cent of the production capacity for cathodes and 85 per centfor anodes.
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In a pitch to global investors to helpAustralia fast-track the mining and processing of critical minerals, DrChalmers said: “Our international friends need to rely on someone, so let’shave them relying on us.”
Australia is the largest global producerof lithium, third largest producer of cobalt, and fourth largest producer ofrare earths. It supplies about 55 per cent of the world’s lithium.
At last week’s G20 summit in Bali, DrChalmers said he and Anthony Albanese were repeatedly asked by world leadersabout “Australian lithium” amid a global net zero emissions scramble to sourceminerals for batteries, electric vehicles, wind turbines, solar panels, phones,fighter jets, MRI scanners and satellites.
As the Albanese government finalises itsresponse to the energy crisis over the next fortnight, Dr Chalmers will backthe work of resources companies and declare himself “an enthusiast forAustralian mining”.
Resources Minister Madeleine King willtell the summit that developing a world-leading critical minerals industrymust become a “national mission akin to the foundation of our iron oreindustry in the 1950s and our LNG export industry in the 1990s”.
“While companies like Japan’s Mitsuipurchased some of the first iron ore exports from the Pilbara in the late1950s, now in 2022 these companies want to work with us again as we confrontthe challenge of building a new industry and supply chains around criticalminerals,” Ms King will say.
The federal government has been attackedby miners in recent weeks following reports that Dr Chalmers was considering a temporarytax on thermal coal and gas to help manufacturers and households cope withskyrocketing energy prices.
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Dr Chalmers warned there is “no net zerowithout mining” and that the resources sector, which is unlikely to be hit witha new tax in the government’s energy response, is “too often misunderstood”. Hewill pushback against “ill-informed and irresponsible assessment that mining isanathema to net-zero”.
“Some people don’t seem to get just howcrucial the mining industry is, and will be, to our net-zero and clean energyambitions,” the Treasurer said. “We have exactly what the world needs, exactlywhen the world needs it. So from that, I draw this conclusion: criticalminerals could be the opportunity of the century. This is a generationalopportunity that we cannot miss or mishandle.
“By one estimation, at the rate we aregoing and are expected to proceed at, over the next 30 years the world willneed to mine more minerals than what has been extracted during the 70,000years previous.”
With the government wooing big businessand global investors, Dr Chalmers will say Labor “welcomes and encourages” foreigninvestment in critical minerals to establish new supply chains in the “nationalinterest”.
“The pattern ofinvestment in the sector in the past has focused, by and large, on securing theresource. That is starting to change. We are now seeing interest from overseasinvestors looking for investment returns, and in projects further up the valuechain.”
Dr Chalmers pledged to lock in financialgains for regional Australia on the back of a “minerals boom”. “If you takelithium as an example – in 2023-24, it’s expected to have the same share ofmining exports as LNG did back in 1993, almost 30 years ago,” he said. “Orwhere iron ore would have been just after the export ban lifted more than 60years ago. Where coal would have been more than a century ago.
“We want to be setting ourselves up fora boom that lasts with benefits that are shared – not tinkering around in themiddle of it.”
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As the Greens and environmental groupsput pressure on the government to shut down coal and gas, Ms King will launch adefence of the mining sector.
“Our traditional resources sector willcontinue to serve us well while we turn increasingly to the extraction anddevelopment of critical minerals,” Ms King will say. “The resources sectorunderstands 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 inreaching our global emissions targets.”
The senior West Australian MP willdeclare: “We are a trading nation – that is how we pay our way and generateprosperity. The resources sector has repeatedly come to the nation’s rescueduring economic downturns. It accounts for our three largest exports. Each ofthem – coal, iron ore and liquefied natural gas – are of enormous strategicimportance to those nations we export them to.”
NSW Treasurer Matt Kean will link thedevelopment of critical minerals and associated infrastructure with benefits inthe regions including green ammonia, steel and aluminium hubs in the HunterValley, and green steel in the Illawarra. Mr Kean believes critical mineralsare fundamental in supporting the development of a low-carbon economy andturning Australia into a major green energy exporter.
“Lithium, cobalt, copper and nickel areamong the resources that will underpin the growth of renewable generation andelectrification,” Mr Kean will say. “As a nation with an abundance of naturalresources, there is nothing that prevents us from claiming our place as arenewable energy superpower”.
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