Risk of ‘resources famine’ as mining lags

The mining sector is juggling cost pressures as well as a boom in demand for lithium, copper and nickel.

Australian expertise and minerals are in demand in a world hungry for energy resources – old and new – as executives gather for the biggest mining expo since the pandemic.

Federal Resources Minister Madeleine King will spruik Australia’s investment credentials at the International Mining and Resources Conference in Sydney where delegations from more than 100 countries have converged.

An abundance of the critical minerals needed for clean energy technologies are a drawcard for the more than 7500 delegates, as is the glittering gala dinner later on Thursday.

But the police presence is heavy at the venue in Darling Harbour, with climate protesters crying foul over Australia’s continued expansion of gas and coal fields.

Peter Bryant, managing director of United States-based consultancy Clareo, warned of an impending “resource famine” as economies struggle to make the goods required to deliver net zero emissions by 2050.

Downstream companies, including electric automakers and developers of high-tech driverless cars, are trying to lock in supplies decades ahead.

“They are waking up to the fact that they need an adequate, affordable, secure and timely supply of minerals that’s responsibly extracted and processed,” Mr Bryant told AAP.

“For critical minerals, particularly copper and nickel, it’s hard to see it ticking any of those boxes given the time frames and the volume, whether it’s EVs or gigawatts of solar,” he said.

Current methods of processing and refining are energy intensive and heavily polluting because they still rely on oil, gas and coal.

“We’ve got to change that as well, so there’s a double jeopardy going on,” Mr Bryant said.

“This is a challenge the mining industry can’t solve by itself.”

Jess Farrell, asset president at BHP’s Nickel West operation, said state and commonwealth support is critical, as Australia is competing internationally with countries whose governments provide multibillion dollar incentives to support battery value chains.

“Nickel is considered a ‘future facing commodity’ at BHP – key to the electrification megatrend and a decarbonising world,” she will tell the conference on Thursday.

Nickel West were selling less than 10 per cent of their nickel into the electric vehicle (EV) battery market in 2016, but that has risen to 85 per cent.

Federal budget papers last week forecast Australian mining investment to grow by four per cent in 2022/23 and 5.5 per cent in 2023/24 to hit the highest levels in seven years.

But that’s short of the expansion seen in the last boom, as the threat of global recession looms and interest rates rise.

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