Some of the first Australians I got to know while living in Papua New Guinea – I had gone straight there from England, where I grew up – were geologists.
They were often colourful company. They were also mostly highly curious about the world in which they were working, internationally minded, resilient in often challenging physical circumstances, impressively trained scientifically, and empathetic about the host peoples among whom they worked. It’s not surprising that such people should be key players in Australia’s only truly world-leading industry.
The country may have been built on the sheep’s back, but it’s living now on the miner’s drill. We all depend almost dangerously on this single economic sector. In 2023 it supplied 55 per cent of Australia’s entire goods and services income. Thus the Australian dollar – our means of buying imports and of travelling overseas – relies heavily on our resource sales.
There is no chance of any industry coming close, at least within a generation. We need to ensure that the title of Geoffrey Blainey’s enthralling history of Australian mining, The Rush That Never Ended – a story of adventure and heroism, of hard work and risk-taking – remains relevant. If that rush ends, so does Australians’ long rise in wealth.
Our government services also, naturally and rightly, lean on it – the Minerals Council of Australia says the sector contributed over $74bn in taxes and royalties in the 2021-22 financial year, and that more than 72 per cent of all minerals profits stay in the country. However, this industry is battling uniquely strong headwinds, as illustrated by the example – revealed in The Australian this week – of the $1bn McPhillamys gold project near Blayney in central NSW, which Environment Minister Tanya Plibersek has vetoed on account of “particular significance to the Wiradjuri/Wiradyuri people” despite support for the project from her own department and from the Orange Local Aboriginal Land Council.
Such compliance challenges for access to this country’s extraordinarily rich resources abound, and are multiplying.
The industry, while constantly innovating technologically and these days chasing green goals, is far from perfect. It’s right constantly to seek to improve itself – not only its efficiency and productivity, but also its environmental standards, its social licence, its community responsibilities. It chases world’s best practice, and looks to learn from its inevitable many mistakes. Our continent is not exactly “a quarry”, even though our economy might be. Australian mines occupy only about the same amount of land as do pubs. But these workplaces are remote from where our intensely urban population lives, and this population is decreasingly educated about industry or even science.
Thus the industry faces a challenge for support, including through universities attracting sufficient students for relevant courses. The Australasian Institute for Mining and Metallurgy, the peak body for resources professionals, produced a report a couple of years ago that warned: “Low enrolments, which lead to low graduate numbers, pose a critical challenge for mining engineering programs.” Programs have indeed merged or closed since then.
The report went on: “Decline in public perception towards the resources industry is largely informed by an incomplete understanding of the breadth of the industry and its contribution to green economy initiatives.”
In particular, the ambitious global target of net zero greenhouse gas emissions by 2050 cannot be approached without a significant step-up in critical minerals production. Astronomical volumes of minerals and metals will be required to achieve this goal. By 2030 alone, the MCA says, 50 new lithium mines, 60 new nickel mines and 17 new cobalt mines will be needed to supply the materials required to meet demand for battery storage if the world is indeed to be reshaped.
The federal government’s controversial Future Made in Australia program takes this on board. The Treasury says support from this program is needed “to crowd-in the necessary private investment to scale up priority industries that will help the Australian economy navigate and prosper through … its major structural and strategic challenges.”
For now, though, more than 90 per cent of our critical minerals output is being shipped to China for processing, and 84 per cent of our iron ore. It makes some sense, then, to encourage the diversification of our markets, and for government to bring back industry policy from the economic graveyard – even as there’s room to contest how that’s done – to foster the rapid development of rare earths mining and processing.
But such goals provide a huge challenge as compliance costs and hold-ups mount. A whole-of-government approach to the issues swirling around Australia’s most successful industry requires a full buy-in from state governments and other important institutions, including our capital markets and our universities and schools.
Every year the Melbourne Mining Club, besides hosting six lunches in the city’s town hall at which the heads of the world’s biggest resource firms speak, also holds five “Cutting Edge” events when the leaders of three smaller companies talk of their plans.
It’s impossible to conceive of another Australian sector where annually 15 mostly new businesses present themselves, having already raised millions of dollars, exporting much or all of their output, with a clear path to expand.
Our resources are rich, but rarely unique. It’s a competitive business – look what’s happened in nickel, where Indonesia and China have combined suddenly to dominate. It’s time for Australia to cease taking its only world-leading industry for granted.
Rowan Callick is an industry fellow at Griffith University’s Asia Institute.