CRITICAL MINERALS & ENERGY INVESTMENT CONFERENCE AND EXHIBITION, BRISBANE

26 February 2024

E&OE

Ladies and Gentlemen, I am delighted to join you this afternoon, to speak here today as the Federal Shadow Minister for Resources.

Thank all the organisers and sponsors today for making this Critical Minerals and Energy Investment Conference and Exhibition a reality.

I want to start my remarks by reaffirming that the Coalition is a strong and ardent supporter of the resources sector, and is committed to the future of mining in this country.

Australia has a long and proud history of mining and minerals development and has developed a reputation for expertise and high standards of production.

We know how to do mining right.

Australia is blessed with abundant high quality natural resources, and the workforce and regional communities ready to embark on our expanded mining potential, including minerals which have become critical to our future.

And whilst there is some uncertainty facing parts of the industry – it would be remiss of me to not reflect on the nickel market – there is still opportunity for a prosperous and abundant critical minerals future in Australia.

 

Australia’s Resources Strength

Australia’s strength as a trusted and secure minerals supplier has brought great prosperity to our nation.

As one of the world’s best producers of iron ore, coal and gas, we are a crucial energy supplier for our international partners and a key part of the steelmaking supply chain.

This strength of our traditional resources has cemented Australia’s status as a safe, secure, and competitive mining nation.

We have world class social and environmental licence, and among the safest working conditions for miners anywhere.

And of course, we are blessed with incredible natural resources, able to supply a vast array of high-quality minerals and commodities to those who need them around the world.

And we are a trusted supplier – especially to our strategic partners who are also navigating an increasingly complex global geopolitical landscape.

We have the experience, the prosperous regional towns, the well-paid, secure workforce, an excellent geological endowment, and a long history of stable and appropriate government policy.

As the globe turns towards securing the ever increasing quantities of critical minerals needed, and begins to source new supplies to support their industries, Australia is ready and waiting for investment.

It is worth noting that the boom of the critical minerals sector will not replace the strength or success of traditional resources.

Commodities like coal, iron ore and gas will remain vital for decades into the future, and support the critical minerals sector through manufacturing and processing.

While wind turbines may need critical minerals like neodymium for the magnets, and minerals that should be considered critical, like copper used predominantly for wiring, they also need coking coal and iron ore to make the hundreds of tonnes of steel that goes into every single one.

And while mining critical minerals will remain crucial, it is the secure, affordable energy that allows these minerals to be processed into useful products.

Australia’s critical mineral endowment will not replace our traditional strengths, but instead complement it, working together to supply the world’s mineral and energy needs.

However, it is also important to remember that we operate in a competitive environment.

Our competitors are eyeing international investors, and establishing policy and taxation settings to incentivise investment in their own jurisdictions.

While the obvious example is the US inflation reduction act, other countries are also acting to encourage investment – whether it is tax settings in Japan, strategic industrial complexes in South Korea, or rapid approvals and cheap energy in Indonesia.

 

Strategic International Partnerships

But for all of Australia’s minerals, we need buyers.

Our mining success has been built on export and trade.

And as countries across the globe recognise the opportunity of critical minerals, they will turn to trusted suppliers to source new investment and projects.

Through the supply of energy resources like coal and gas, we have powered millions of people throughout Asia, and have long standing and trusted relationships with countries like Japan and Korea.

Our iron ore became the backbone of our export economy through the late 20th and early 21st century, quadrupling in size to supply Asia for their steel production.

And now, we have the potential to maximise our reserves of critical minerals through leveraging investment with further international partnerships.

Australia’s first shipment of coal left Newcastle in 1799, bound for Asia.

In the 225 years since, we have become a bastion of energy exports, powering millions of people across the globe, in countries like Japan, India, and Korea.

And these relationships will continue, as countries still require secure, affordable sources of energy for electricity generation and manufacturing.

But these countries also rely on new technologies, like superconductors.

Korea aims to become a high-tech industrial powerhouse, and reduce their supply chain dependance by diversifying where they source their critical minerals.

We have the ability to provide many of the minerals they so desperately need, offering  diversification and stability to secure their supply chains.

Australia must establish strategic partnerships with like-minded countries, including Korea, Japan and the United States, who need our critical minerals to help create secure supply chains.

These strategic partnerships would add value for both Australia and our partners by securing the entire process from mining, to processing to manufacturing, without ever needing to outsource steps in the value chain where there is a higher risk to security of supply.

Some have referred to this policy as friend-shoring, but I just call it sensible.

Where our partners are looking to friend-shore, we must be ready to engage them as trusted friends, able to meet their needs.

An essential part of meeting that need is knowing what we have to offer, and what each of our partners deems critical.

 

Critical Minerals List Opportunities

Australia tops the global ranking of identified resources of gold, nickel, uranium and zinc.

Australia is ranked second globally for identified reserves of cobalt, copper, lithium, tungsten and vanadium.

These opportunities are literally sitting in the ground, waiting for investment and development.

The world is on the cusp of a critical minerals boom, and we want to ensure Australia is not left behind.

We know that Critical Minerals are essential for the functioning of our modern technologies and economies and are becoming increasingly subject to the uncertainty of supply chain risks.

Last year I called for the critical minerals list to be updated to include copper, nickel, zinc, aluminium, alumina, bauxite, potash and phosphate.

Disappointingly, the Government decided to create a second, less important list to place some of these minerals on, and called it the Strategic Materials List, claiming they were important but not vulnerable to supply chain shocks.

Only months later, the nickel supply chain was disrupted and the Government scrambled to include nickel on the critical minerals list.

This raises the question: how would the recent nickel crisis have unfolded if nickel had been on the Critical Minerals List back in June 2023?

And why did the Government lack the vision to see the supply chain risks that clearly existed?

What about the other minerals on the Strategic Materials List?

It is time for the Government to acknowledge their mistake, and put copper, zinc, aluminium, alumina, bauxite, potash and phosphate on the Critical Minerals List to avert further crises.

And given the dramatic shift in global landscape since the first Critical Minerals list came out in 2019, it is time to consider what else may have been overlooked.

I want to address the role of two important minerals that Australia has in abundance – and which are so critical to many international partners.

The Minerals Council of Australia has already called for these two minerals to be added to the critical minerals list.

The first is metallurgical, or coking coal.

It is already listed on the EU strategic raw material list and on South Korea’s critical minerals supply list.

Met Coal is so important because steel is the lifeblood of modern civilisation.

The industrial revolution, population expansion, the growth of mass production and a great deal more has relied on steel.

But steel is also crucial for the future. Defence, medicine, aerospace, science, and construction all rely on steel.

As I have said before, if it’s not made of steel, it’s made in a factory made of steel.

And we cannot feasibly produce steel without coking coal.

Now I understand some are toying with the idea of hydrogen as a replacement for metallurgical coal in the production process, however this is far away from commercial reality.

There is simply no replacement for coking coal currently. It will remain a vital ingredient in making steel for decades to come.

The second strategically important resource is uranium.

It is already on the Canadian critical minerals list, and the United State Department of Energy also recognised that uranium met the criteria for inclusion on the US critical minerals list.

Whilst uranium is not currently maximised to its full potential in Australia, it provides a vital resource for medical and scientific research.

The Lucas Heights reactor has operated safely in a Sydney suburb for over six decades, providing essential medical and scientific research that has benefited millions of Australians.

And overseas, nuclear power provides secure, affordable zero-carbon energy solutions, with key partners like Japan and the United States making ground-breaking developments in small modular reactors – or SMRs.

However, after Russia’s invasion of Ukraine in 2022, global uranium supply chains were severely impacted.

Russia does not have massive reserves of uranium, however they are one of the world’s leading producers of enriched uranium.

The United States imports 48 per cent of their uranium from former Soviet republics.

And whilst Australia does not enrich any of its own uranium, we have the ability to partner with strategic allies to secure key supply lines of our uranium, enriched by our allies, to supply like-minded nations.

These reasons absolutely highlight the importance of uranium as a critical mineral, and its significance will continue to increase in decades to come.

Ultimately, the Government of the day will decide whether or not they believe a particular mineral to be of importance.

However, our strategic partners will also have a view of what is important to them, and it would be disappointing if ideology were to halt the consideration of these two minerals for our own list.

Even if Australia does not use nuclear power in our energy mix, the rest of the globe will.

The International Energy Agency predicts that without nuclear energy, consumers’ energy bills will rise on average $20 billion US dollars each year to 2050.

It is obvious that nuclear power has a key role to play in the future energy mix.

And the clear risks that a vulnerable uranium supply chain holds, highlights its strategic importance and merits the consideration of including it in the critical minerals list.

Australian uranium can fill the growing global demand – but to do so, we need investment in uranium mining across the country.

Government policy, particularly in the critical minerals space, should not simply reflect ideology, but encompass what is best for Australia and our partners.

These materials are proven strategic minerals on the global stage, and it is time that Australia recognise their future importance.

However, urgent reforms are needed to overcome the increasing risks to our critical minerals expansion, from strengthening activist opposition to mining, to slower approvals, to burdensome new regulations, the Government must take action to make Australia an attractive investment environment again.

 

Risks & Challenges

Australia has some of the highest environmental and social standards in the world, but approvals must be streamlined and red and green tape must be reduced to ensure that projects – particularly ones of national significance – are able to progress in a timely and cost-efficient manner.

We have recently seen stories of vexatious legal challenges to perfectly viable projects, not aimed at protecting the environment but ideology-driven to simply kill job-creating industries.

With project timeframes for nickel or copper mines taking up to 15 to 20 years from initiation to first production, much of the demand forecasts for critical minerals will be missed by Australian projects.

That means that in the current environment, to support forecast demand, many of these minerals projects would have needed to commence a decade ago.

Further, it appears Government policy is scrambling to address problems on the run, rather than planning long-term solutions and setting a pathway to developing the sector.

International partnerships are crucial to developing long-term solutions.

Australia will never be able to compete with the scale of money being expended by other countries. The United States’ trillion dollar Inflation Reduction Act is one such example.

However, what Australia has is our position as a stable, reliable and influential partner in the Asia-Pacific region.

Our existing strategic and diplomatic ties provide the pathway to open new international markets, and entice investment.

Yet these are not being optimised. The Government continues to present critical minerals as only a narrow pathway for batteries and renewables, negating their many other uses.

This puts Australia at a disadvantage with countries developing other critical technological industries.

Most importantly, however, is the lack of urgency with this Government.

Some say we have missed the boat with securing investment from the United States.

Others are concerned that due to the high operating costs, Australian minerals are becoming increasingly uncompetitive.

And no amount of ESG premium can match how high costs have spiralled under this Government.

The unfolding nickel crisis in Western Australia is a prime example of this.

The cost of nickel production has risen by almost 50% in the last few years – so Australian projects have been hit by a double whammy, of cheaper international costs and rising domestic production costs.

Our nickel producers operate with costs 28% higher than Indonesia, exacerbating the disadvantage we currently have.

And while Indonesia has increased its usage of coal by 32% – which is of lower-quality and higher-emissions than Australian coal – in to lower their energy costs and drive nickel production, the Albanese Government has instead introduced strict new domestic emissions targets, a carbon tax in the safeguard mechanism, new pro-union anti-employer industrial relations laws, new environmental restrictions, and has delivered higher costs across the board, particularly in energy, where costs have risen dramatically.

It has been weeks since the nickel crisis began, and the Government has taken no concrete action to address it.

It is becoming apparent that this industry is having to stumble their way through a shifting regulatory environment, and changing international markets, without proper Government direction.

Australia needs to take action to capitalise on our critical minerals opportunity.

Rather than confining the entire industry into making batteries, we must continue to recognise the depth of uses for critical minerals.

Australia has a responsibility to be a reliable supplier of these critical minerals to the world, both for our international customers and for our Australian workers and economy.

We have to do more to secure investment into these important commodities and we have to do it now.

 

Conclusion

There are many exciting opportunities for investment, and I urge all of you here today to explore what options lie within Australia for you.

It is international support and engagement with Australia that will best unlock our critical minerals potential.

And our continued supply of energy exports to key partners like Japan and Korea will remain one of our resources strengths.

We all know the high energy requirements of mineral extraction and production – and Australia has some of the best energy resources in the world.

We need clarity, firm focus and direction from government on what a critical minerals future will look like in Australia.

We need realistic, workable policy settings that entice business investment, and reduce unnecessary red tape.

But most of all, we need the public to understand how important mining is to our future.

Without mining, the world ceases to exist as we know it.

And we need you all here today, to go out and advocate for the importance of mining, so our children, and our children’s children, can all have the chance to enjoy the lifestyle that we have been blessed with.