Partners in Performance ANZ director, Michael Huggins, explains how the heightened demand for critical minerals has pushed up the price of raw materials, potentially reversing the progress of clean energy technologies.
But there is a sweet spot that could benefit Australia. We can play a key role in stabilising the global markets and supply chain for these critical minerals. Australia can source minerals in environmentally and socially responsible ways due to its strong and efficient regulatory environment.
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.
Australia is home to the world’s largest supply four critical minerals. They are nickle, rutile, tantalum and zircon. We are also among the top five in the world for our supply of cobalt, lithium, copper, antimony, niobium and vanadium, positioning us 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 toward 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 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. Apart from boosting the economy, it will breed a new generation of high-skill, high-tech jobs.
The Australian Government clearly recognises the potential that Australia holds in the critical minerals mining sector. However, more investments, 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 $2 billion that has already 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.
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 global management consulting firm, Partners in Performance. These include an old mining site that has since transitioned to harnessing solar and wind energy, that now powers 70 per cent 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.
About the author
Michael Huggins is a director and head of Australia and New Zealand at Partners in Performance.
He has over 20 years of experience in management consulting and private equity. Huggins started his
career in engineering at Rio Tinto before moving into management consulting at McKinsey & Company.