Australia’s Mining Industry – Dead end or bright future?

Australia’s Mining Industry – Dead end or bright future?

By Juergen Wallstabe Cluster Manager, Mining & Resources

Juergen Wallstabe, Cluster Manager Mining & Resources

Mining for resources has played a decisive role in the development of humanity as we know it. Many major technological breakthroughs were only possible because new materials became available along with knowledge and technologies to mine those materials – it is for good reason that epochs of human development are named after the raw materials stone, bronze and iron.

In recent history, mining has allowed access to a “new” range of metals that helped technologies like computers or smartphones to be more powerful each year while shrinking to sizes unimaginable only a couple of decades ago.

At the same time, mining often has a negative impact on landscapes, ecosystems, communities and – as recent events in Australia have demonstrated – even historical sites. Furthermore, the steady advance of mining technologies made it possible to extract billions of tons of fossil fuels from the ground, leading to one of the greatest challenges humanity has ever faced – climate change.

So here we are at a crossroads – which role should mining play in the future?

Status quo – mining is crucial for Australia

In 2021, mining is still crucial to keeping the global economy going. Visual Capitalist published a great article illustrating the world’s mine production – have a look here, it is mind-boggling (note that different colours represent different orders of magnitude – from 1 metric ton to 1 million metric tons!).

Looking at Australia, the picture becomes clearer when you look at dollar values instead of masses. In 2019/20, Australia exported a whopping $291 billion worth of resources, with iron ore being the most important commodity ($103 bn), followed by coal ($55 bn, thermal and metallurgical), LNG ($48 bn), gold ($24 bn) and other resources like Copper, Aluminium, Nickel and a wide range of critical minerals.

The positive impact of mining on the Australian economy is obvious – the resources industry and associated suppliers and service providers (METS – Mining Equipment, Technology and Services) contribute around 15% to Australia’s GDP and support over 1.1 million jobs which are almost 10% of all full-time employment.1

A success story destined to continue, one would think. But there are some tough challenges to overcome in the coming years and decades.

1 Source: METS Sector Australia – Mining Equipment, Technology & Services | METS Ignited

“Mining will continue to play a crucial role in covering the resource demand for a greener, more sustainable world”

Everchanging resources demand

The worldwide economic situation, as well as technological developments, continuously change the demand for resources and its composition:

- While coal is currently one of Australia’s major export commodities, it won’t be in 30 years’ time

- While China is still enormously hungry for iron ore to feed a strong domestic construction sector, there are signs that the growth rates we’ve seen in the past are not going to repeat

- While Lithium’s largest application was in glass and ceramics production ten years ago, Li-Ion batteries are becoming ever more important for our future planet.

Impact on land and people

Mines cover less than 0.02% of the Australian total land area (for comparison: that’s roughly the size of a grain of rice on a dinner plate); nevertheless, it is indisputable that most mining operations do have an impact on the local environment and local communities. While most mining companies already have excellent social and environmental practices in place, the definition of “excellent” will continuously change. To name just two examples:

- Storing tailings in massive, often square kilometre sized dams was and is an acceptable standard procedure. That might change in the future as more and more voices call for a “no tailings dam future”

- After the (legal but questionable) destruction of Jukaan Gorge by Rio Tinto in May 2020, miners will be extra careful when dealing with sites of historical or cultural significance.

Path to Zero Emission

Generally, mining operations require a lot of energy which in turn cause carbon emissions. For reference, an average of 0.8 tons of CO2 was emitted by mines worldwide per ounce of gold produced (that’s your standard Australian Kangaroo gold coin). That’s equivalent to the carbon emissions of a standard economy Diesel car driving 2,500 km from Sydney to Cairns.

Hence, mining companies are under enormous pressure to reduce their operational carbon emissions. However, as many Australian mines are located in the middle of nowhere, simply connecting the mine to the electricity grid and signing up for a renewables plan isn’t an option. Similarly, finding safe and reliable alternatives to Diesel engines currently powering an army of mining trucks isn’t straightforward either.

Mining (still) has an image problem

While every one of us uses products that contain mined resources (check out the fantastic Minerals Council publication), young people in particular often have an issue with mining. Part of the problem is that negative examples (dam failures, forest clearances, fatal accidents) are all over the news and therefore reinforce the negative sentiment. Another contributing factor is that the young generation wants to be associated with progressive, future-facing and green industries – mining just doesn’t fit into this narrative.

Where to from here?

The good news is that judging from what I’ve experienced in my three years as manager of the Competence Centre for Mining & Resources at AHK Australien, the mining industry has understood it needs to act on all the challenges mentioned above. And I’ve seen many actions already:

- Mining companies and mining suppliers have established strong relationships with local communities. For example, read about REMA TIP TOP’s “Reconciliation Action Plan”, a structured approach to advance reconciliation and engagement with Australia’s First Nations peoples, on page 76.

- Dozens of emerging resources companies are planning and executing projects in the critical minerals sector to satisfy the demand for Lithium, Graphite, Nickel, Rare Earths and other needed elements for future technologies. We’re proud to have EcoGraf, Pure Battery Technologies and Vulcan Energy Resources (read more on page 58) as members of AHK Australien

- Renewable energy for mines is booming. Especially in remote locations, installing solar and/or wind farms in conjunction with a buffer battery makes sense to reduce the consumption of Diesel burnt in power generators significantly.

- Mining companies are using artificial intelligence to make their operations more efficient and sustainable. For example, BASF recently launched IntelliSense.io (page 68), an AI solution that allows customers to generate efficiency gains throughout the entire mine-to-market value chain.

To come back to the initial question – “Dead end or bright future” for Australia’s mining industry – personally, I’m bullish for the industry’s future. Mining will continue to play a crucial role in covering the resource demand for a greener, more sustainable world. At the same time, the mining industry is working on creating emission-free, lowimpact operations while building lasting and respectful relationships with local communities and their heritage.

The question is: to what extent will those efforts be in response to public sentiment and pressure versus proactively forging a leadership path? I, for one, hope it’s the latter. With their financial resources and intellectual horsepower, there’s no better custodian for the sector’s legacy than the mining companies themselves.

There’s still a lot to do, so I’m excited to be able to witness these changes first-hand!