Circular mindset a key to Australia’s next miner miracle
- 31 October 2024
Australia’s chief scientist Dr Cathy Foley has urged the country’s mining and metals industry leaders to properly frame the problem they are trying to solve for the world to give themselves a shot at delivering a new economic miracle. Otherwise they risk the wrong kind of “Kodak moment”.
“Australia’s mining sector is known for its innovation,” she told a Mining, Metals and the Circular Economy forum at IMARC 2024 in Sydney.
“But now it’s time to double down on that reputation and do everything we can to ensure innovation drives the coming two decades, whether that's innovation in business models, extraction techniques, processing or circular economy technologies.
“Australia’s mining sector has an unprecedented opportunity to lead the world in the transition to a circular economy.
“By increasing circularity we can reduce waste, generate new economic opportunities and contribute to a more sustainable future.”
Foley said Australia was looked upon internationally as an “economic miracle”.
“We only have 0.3% of the world's population yet we’re the 13th biggest economy and we're a country that pretty much has had continuous growth during the last 30-plus years,” she said.
“We weathered the global economic downturn of the 2000s and even the pandemic. Our secret sauce is not just that we have lots of mineral resources that the world wants, because many other countries have them too. Rather, it's been how we've been able to extract them.”
The view beyond extracting and shipping mainly bulk commodities – including thermal coal and liquified natural gas – has Australia becoming a far bigger supplier of green iron and downstream battery and other energy transition materials and being more deeply embedded in high-value global technology, military and other supply chains.
And deriving far higher value from the monumental quantities of material being moved and processed and stored in waste dumps to yield relatively tiny quantities of mineral and metal, and the inputs going into production of the same.
New Australian Tax Office Corporate Tax Transparency data that lobbed this week underlined the scale of the current miracle. It showed mining, the country’s biggest taxpayer, paying A$43.1 billion in company tax for 2022-23 – more than all other industries combined and five times higher than in 2014-15. With royalties ($31.5 billion), the direct community dividend in FY23 was $74.6 billion.
“Australia now has a whole new opportunity, because we have the critical minerals that are essential for the low emissions technologies,” Foley said.
“Australia has its own ambitions to add value to these critical minerals by scaling up minerals processing and contributing to the development of a more complex and deep tech economy.
“The international communities want Australia to be more a minerals processing country as Paris scope three and carbon border adjustments come into play. More and more they're looking to us to provide critical minerals, including rare earths, that are processed here for the global supply chains that will be essential to the energy transition in countries like the UK, US, Japan, Korea, India and the EU.”
However, said Foley, the picture was not that simple, “because over the top of the energy transition there is the increasing awareness … that the resources of the Earth are finite”.
“Many countries are promoting and moving to circular economy practices,” she told the forum.
“These nations are implementing policies that encourage recycling, reuse and re manufacture. For instance, the European Union has set a target of sourcing 15% of its critical minerals from recycled materials by 2030. And China has developed a vast circular industrial system that includes standards for reuse and refurbishment of critical minerals and materials.
“Countries are using tax incentives to encourage recycling and banning exports and disposal of materials that are recycled domestically. And if these global initiatives succeed, Australia's role as a primary exporter of raw materials may diminish over time.
“This transition will have a profound implication on our economy.”
Foley said Australia’s lack of midstream manufacturing within individual technology value chains such as photovoltaics and batteries was among a range of obstacles to large-scale extension and ultimately replacement of current world-leading ore, concentrate and refined chemical exports.
Innovation, new business models and new thinking would be crucial to any transition by major mining and materials enterprises.
Foley referenced the demise of Kodak, the photographic film giant, in imploring Australian industry and governments to adopt new capabilities and innovative technologies but most of all new attitudes.
The Harvard Business Review has said Kodak saw the digital freight train coming and invested in new technologies but still went bankrupt when its traditional businesses were disrupted.
“Companies often see the disruptive forces affecting their industry. They frequently divert sufficient resources to participate in emerging markets. Their failure is usually an inability to truly embrace the new business models the disruptive change opens up,” the HBR said a decade ago.
It warned company leaders not to talk to their customers about products, offerings or technologies. Instead, “define the problem you are solving for them”.
Foley said a successful transition in Australia’s mineral-based economy required “a shift in our attitudes to value our minerals”.
“We must also be responsive to what will continue to be a changing landscape,” she said.
“If we can stay the course and get this right I think we can avoid a Kodak moment and our children and our grandchildren can look forward to inheriting an economy that leverages our mining and minerals wealth, an economy built around our role as a clean energy superpower, an economy where we are having countries look to Australia as a trusted partner because of our consideration of the environment, social responsibility and circular economy and an economy that makes the most of the strengths of our fundamental science research.
“If we do this Australia is in line for it being a second economic miracle.
“And those of you like me who grew up in a Catholic school know that two miracles are pretty consequential.”
