Following on from our previous introduction to Beyond Zero Emissions’ (BZE) “Million Jobs Plan”, we will look further at Australia’s unique position as the market begins to adjust itself as demand for clean energy becomes preferable over fossil fuels. Almost all of these technologies require a rare earth metal. If metals such as lithium, manganese and cobalt were refined domestically, Australia would create a high value product for use domestically and for export. The demand for these rare earth metals are growing by the day as more and more people adopt clean energy options such as electric cars, renewable energy technology and battery systems.
Investment in Innovation
In terms of profits, Manganese when refined to a high-purity metal becomes 4x more valuable. Western Australia has already begun to take advantage of this new demand in the market. Companies such as Tianqi and Albemarle have already taken initiative by investing in processing facilities for battery grade lithium hydroxide. These plants employ thousands of local workers. In WA, an expansion in the energy metals industry would see an opening of approximately 22 000 jobs, and an additional 53 000 indirect jobs by 2025. Most of these jobs would be looking at secondary processing of lithium and the manufacturing of battery components. According to the BZE plan “these would be ongoing jobs with higher wages than normal mining operations”. Project have already begun with companies such as Sun Metals already investing in a 125MW solar farm which is looking to supply zinc, and has resulted in an expansion creating hundreds of extra jobs to reduce the unemployment rate.
NSW’s Approach – an example?
In an attempt to boost the economy and establish over 15,500 jobs, the NSW and federal government have approved 32 mining projects that were in hiatus in the NSE planning system. Analysts have found that the state will generate over $13 billion through these approved mining projects. Research has further found that of this $13 billion the money will be distributed across various regions within the state. We will see $2.7 billion generated in the Hunter Valley, $2.1 billion generated in the Illawarra, $3.6 billion generated in the Central West, 2.7 billion generated in the far West NSW, 470 million generated in the Lithgow/Mudgee region and $1.5 billion generated in the Gunnedah Region. It also has been identified that 21 of the 32 mining projects are coal projects, whilst the remaining 11 are metal projects. The quantity of metal projects has almost doubled in the last year with 2019’s metal projects approved was six.
Current advanced economic and industry modelling have predicted that the demand for rare earth metals will sky rocket over the upcoming years as interest in electric car continues to grow, with companies such as Tesla unable to keep up with the demand for electric cars. Many rare earth metals, which are found in isolated regions around the world (including Australia), are an integral part of the Tesla electric battery and motor system, making it an important commodity for the future. As mentioned in the previous GRT article, the world is currently moving in the direction of renewable energy. However, this economic boost will only provide short-term economic relief. What is needed is a plan that is more subjected towards green energy, and the future of the energy industry. There are far more economic and effective projects that are able to support not only the national economy, but also local economies, and support local businesses over a long term within the renewable energy industry.
Geopolitical Implications
At the moment China produces 80% of the world’s Neodymium-Praseodymium (NP), which is a combination of rare earth metals that are critical to the strength of permanent magnets. These strong magnets are utilised in electric vehicles. These magnets are 3x stronger and 1/10 the size of a conventional magnet, making them a very vital component of the electric vehicle motor. Thanks to Lynas Corporation LTD, Australia is already the second largest producer of rare earth metals in the world. Currently, there are 4 Australian companies that are mining the NP, with 3 of them based here in Australia, and one in Tanzania. During the COVID pandemic Australian has invested in 4 more new rare earth metal mines that area already in the advanced planning stages. Even with the COVID situation in the March quarter the company has sold over 136 tonnes of rare earth metals to a company in Germany. This high demand during the COVID has sparked an increase in Australian mining companies in Tanzania.
Other companies such as Northern Minerals are focussing on other rare earth metals such as Dysprosium and Terbium. Due to the scarcity of these rare earth metals, countries such as the US rely heavily on China for their rare earth metals. As a result of this situation where the US and Australia have formulated a “rare, rare earth partnership”. China threatens to use rare earth mineral exports as leverage in its ongoing trade war with the US. Australia and the US have partnered together to find new source of these critical minerals in an attempt to reduce their reliance on Chinese imports.
A Rare Opportunity
The demand for rare earth minerals is skyrocketing, with countries slowly attempting to decarbonise their economy. No country has yet to successfully decarbonise their economy completely. However, over time with more investments, renewable energy projects and policy infrastructure upgrades, it is expected for this to be soon accomplished. Australia has been put in a very unique position to possibly become one of the largest exporters of rare earth metals in the world (alongside China) to a world that is quickly adopting a “green technological revolution”. Unless within the next 5 years an alternative method of electric motors is found, rare earth metals are Australia’s mining way forward. With unemployment rates soaring in Australia, demand for these metals increasing and the million jobs plan underway, the Australian Governments has an opportunity to push Australia into the right direction. This could be the first step in putting Covid19 behind us economically, and look forward to the future.
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