Australia makes critical moves as mineral supplier

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As the world’s leading developed nations set up their critical minerals supply chains, the Australia Government has established a strategy to fortify the country’s place as a key supplier.

Released in March, The Australian Government’s Resources Technology and Critical Minerals Processing Road Map is broken into two, five and 10-year goals for Australia’s metals industry to achieve this.

As manufacturing of renewable energy technologies ramps up, Australia’s rich critical minerals reserves have elevated the potential the country holds to become a dominant force in the critical minerals supply chain.

For example, Australia is the world’s top producer of lithium, rutile and the second largest producer of zircon and rare earth elements.

The critical minerals fervour is also growing internationally in countries such as the United States, with President Joe Biden signing an executive order in February to deliver a 100-day review of four key areas, including large-capacity batteries and critical minerals supply chains.

Biden has indicated that the US plans to move suppliers out of countries such as China and back onto its home shores or to allied countries, leaving Australia in a position to capitalise.

Federal Minister for Resources, Water and Northern Australia Keith Pitt says Australia has the potential to grow its role in the critical minerals global supply chain.

“There is growing recognition among like-minded countries about the need for more diverse global supply chains,” Pitt says.

“Our world-leading mining expertise, proximity to manufacturing powerhouses such as Japan and Korea, and our position as a trusted trading and strategic partner with rapidly growing markets in the US and Europe positions us well compared to other nations.

“Australia is one of the most technically advanced, innovative and efficient resource producers in the world with a skilled workforce, stable investment climate, supportive government incentives and high environmental standards.”

The Australian Government last year established its Critical Minerals Facilitation Office to grow the sector further.

Resources technology and critical minerals are also listed as the top priority in the Australian Government’s $1.3 billion Modern Manufacturing Initiative and National Manufacturing Priorities.

Pitt says the government recognises that mechanisms such as the Roadmap and the Modern Manufacturing Initiative demonstrate strong support for the critical minerals sector.

“Along with our close engagement with partner countries, these initiatives position Australia as a reliable and secure international supplier of critical minerals for the world,” Pitt says.

And while the Road Map’s plan is 10 years in the making, Pitt believes Australia’s role in the global critical minerals supply chain could evolve into downstream processing.

He says Australia has world-leading expertise in resource extraction and processing, high-tech engineering and renewables research.

“Drawing on our expertise in minerals processing, there is also an opportunity for Australian industry to move into downstream processing,” Pitt says.

“Developing processing capabilities outside of concentrated supply chains will be a crucial step in diversifying supply and establishing secure supply chains; and increased domestic processing will also help Australia capture more value from its critical minerals resources.”

Lynas Rare Earths is an established Australian producer of rare earths that is kick starting the government’s ambitions outlined in the Road Map.

The company is currently the only producer of separated rare earths outside of China and is the second largest worldwide, with its rare earths sourced from the Mt Weld mine in Western Australia.

To strengthen its international presence, Lynas secured an agreement with the United States Department of Defense to build a light rare earths separation plant in Texas to bolster the country’s local rare earths supply chain.

Lynas chief executive officer and managing director Amanda Lacaze says developing cost competitive operations, which will require government support, is a key way to establish Australia’s critical minerals projects in global supply chains.

“Government support, including for the development of cost-effective infrastructure will be essential to developing this cost competitive position,” Lacaze says.

“We have an exceptional opportunity for Australia to become a reliable supplier of critical minerals, as Lynas has done in the global rare earths supply chain.”

Rare earths did not suffer the full force of the COVID-19 pandemic like other commodities, with the market remaining well positioned due to increasing EV demand in Europe and Asia.

Lacaze believes COVID-19 sharpened the focus of government and manufacturers around the world on diverse and sustainable supply chains for critical materials.

“While they are used in small quantities, many modern technologies cannot be made without critical minerals such as rare earths and we are seeing more government action on critical minerals than ever before, including tangible actions and significant investment,” Lacaze says.

“The Australian Government’s Modern Manufacturing Initiative highlights the importance of resources technology and critical minerals processing to the development of modern manufacturing capability in Australia and in key allied jurisdictions.”

Cobalt Blue, an aspiring critical minerals producer at the Broken Hill cobalt project in New South Wales, has been recognised by the Australian Government for its potential.

Austrade last year named the Broken Hill project in its Australian Critical Minerals Prospectus 2020, the only cobalt project to make the list.

Cobalt Blue chief executive Joe Kaderavek expects the prospectus to put Broken Hill on the global stage, allowing investors and off-takers to engage with the project.

“Cobalt Blue applauds the proactive approach initiated by the federal government in facilitating investment interest in critical minerals development and processing in Australia,” Kaderavek says.

While cobalt is not publicly traded, Cobalt Blue’s analysis of the critical mineral expects demand to grow by 400,000 tonnes by 2030 compared with 140,000 tonnes in 2021.

“The majority of that growth is driven by electric vehicle and energy storage system battery needs,” Kaderavek explains.

“These numbers also assume a significant ‘thrifting’ or lowering of cobalt content in the battery as technologies progress, nevertheless, the demand growth remains overwhelming.”

While cobalt may not be the most prolific critical mineral in Australia’s arsenal, it remains an aspect of the country’s Roadmap towards being a key supplier to the world over the next decade.

As Kaderavek adds, the initial steps taken by the US are a positive sign for the direction Australia has moved with the strategy.

“Building up US supply chains would not mean it is going it alone, but would see global logistics alliances built as part of the efforts to address weaknesses overall,” he continues.

“As we have already seen, the US Government is willing to incentivise supply into its production into its domestic supply chains, and we look forward to such possible outcomes.”

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