By David Fraser, Managing Director, RZ Resources
Key takeaways
- Australia is already among the top suppliers of some of the world’s most sought-after critical minerals, with global demand increasing exponentially
- As countries and businesses grapple with the consequences of geopolitical instability in areas such as Ukraine, Russia and China, it boosts Australia’s credentials both as a supplier and a place to invest
Ask most Australians what they know about our mining landscape, and a few key constants will likely emerge. They know the industry is massive in states including Western Australia and Queensland, and that we’re big producers of materials such as lithium, iron ore, bauxite, gold and lead.
What they might not know is that the toothpaste they used this morning, or the coat of white paint they gave their walls at the weekend, likely started out underground in Australia. It’s the story of critical minerals and rare earth elements – one that’s rich in potential and prosperity.
Critical minerals – also commonly known as mineral sands – are metals and non-metals that have been deemed essential for the world’s major and emerging economies to thrive.
In Australia – as well as the US – there are 25 of them, including metals and semi-metals used in our smartphones, flat-screen monitors, electric cars, solar panels, paints, plastics, paper, glass and so much more. They include rutile, leucoxene, ilmenite, monazite and xenotime.
Rare earth elements, meanwhile, are a group of 17 metals made up of 15 lanthanides, plus scandium and yttrium. They are critical for industries such as aerospace and defence, as well as modern technologies like electric car batteries, permanent wind turbine magnets and agents used in medical imaging.
Both resources are also crucial to the development and expansion of clean technology applications, meaning growing global demand – especially for rutile, zircon and titanium – works to our advantage.
Looking to our closest ally, Australia has recently won the support of the United States for the development of its critical minerals industry after both countries reached an agreement to coordinate policies and investment to support the industry’s growth.
The deal paves the way for Australian suppliers of these minerals to be treated as domestic suppliers under the U.S. Defence Production Act.
The Ukraine-Russia conflict, to give one example, brought into sharp relief the fact this region of the world supplied 30% of the titanium for Boeing aircraft.
So when that supply chain is impacted at a fundamental level, as it has been by the ongoing conflict, where does the product then come from? And what does it mean for other nations?
It’s a question with which the world has been forced to grapple. And for Australia it means opportunity, for reasons ranging from risk to timeframes.
When companies look at where to do business, what they’re fundamentally looking for is certainty. That partners can supply decades of product, that this supply will be consistent and that, among other things, it will be done within appropriate safety guidelines.
In Australia, this works to our favour, given our ongoing political stability and rigorous commitment to quality. And it’s contributing to investment as a growing force, particularly from Europe, which is proactively exploring opportunities here.
That stands in contrast to some of the high-profile logistical issues centred around China in recent years.
During the pandemic, companies that were used to getting most of their product from the Asian powerbroker realised that supply wasn’t guaranteed – especially given geopolitical uncertainties.
Furthermore, a rise in product costs, coupled with inflation, opened up a case to look into other countries, like Australia, that may previously have been considered more expensive.
There was a fresh perspective that potentially paying a bit more was palatable if it shored up supply and quality, especially with Aussie companies showing their willingness to invest in strategic assets.
An example of this was RZ Resources’ move in 2020 to acquire a mineral separation plant at the mouth of the Brisbane River. As the only such plant on the east coast – noting China as our main competitor for this service – it significantly reduced capital cost and time to production. And it was done by a company that is 100% Australian owned and operated.
It creates an exciting precedent in an evolving industry which requires ongoing conversations, and leadership from the highest levels of government to ensure Australia can capitalise on its rich resources to position itself as an attractive place to invest and do business.
There’s also the influence of geopolitics on supply chains.
Looking to our closest ally, Australia has recently won the support of the United States for the development of its critical minerals industry after both countries reached an agreement to coordinate policies and investment to support the industry’s growth.
The deal paves the way for Australian suppliers of these minerals to be treated as domestic suppliers under the U.S. Defence Production Act.
The Ukraine-Russia conflict, to give one example, brought into sharp relief the fact this region of the world supplied 30% of the titanium for Boeing aircraft.
So when that supply chain is impacted at a fundamental level, as it has been by the ongoing conflict, where does the product then come from? And what does it mean for other nations?
It’s a question with which the world has been forced to grapple. And for Australia it means opportunity, for reasons ranging from risk to timeframes.
When companies look at where to do business, what they’re fundamentally looking for is certainty. That partners can supply decades of product, that this supply will be consistent and that, among other things, it will be done within appropriate safety guidelines.
In Australia, this works to our favour, given our ongoing political stability and rigorous commitment to quality. And it’s contributing to investment as a growing force, particularly from Europe, which is proactively exploring opportunities here.
That stands in contrast to some of the high-profile logistical issues centred around China in recent years.
During the pandemic, companies that were used to getting most of their product from the Asian powerbroker realised that supply wasn’t guaranteed – especially given geopolitical uncertainties.
Furthermore, a rise in product costs, coupled with inflation, opened up a case to look into other countries, like Australia, that may previously have been considered more expensive.
There was a fresh perspective that potentially paying a bit more was palatable if it shored up supply and quality, especially with Aussie companies showing their willingness to invest in strategic assets.
An example of this was RZ Resources’ move in 2020 to acquire a mineral separation plant at the mouth of the Brisbane River. As the only such plant on the east coast – noting China as our main competitor for this service – it significantly reduced capital cost and time to production. And it was done by a company that is 100% Australian owned and operated.
It creates an exciting precedent in an evolving industry which requires ongoing conversations, and leadership from the highest levels of government to ensure Australia can capitalise on its rich resources to position itself as an attractive place to invest and do business.