The German historian Alexander Dermandt once catalogued 210 reasons that had been given for the fall of the Roman Empire. One was the depletion of its mineral resources. The silver of the Rio Tinto mines of Roman times was no doubt important to the longevity of the Pax Romana but minerals are even more important to our modern economy.
Take the smartphone. There are 26 different minerals and metals that make up a smartphone, and 15 of them are produced in Australia. There are about 10 to 20 grams of rare earths in every modern phone.
But rare earths are also essential to the production of wind turbines, modern fighter jets and electric vehicles.
Rare earths have special magnetic, electrical, catalytic and other properties that make them essential for so many modern products. If you get an MRI you can thank the rare earth gadolinium.
You can pick up a three-pack of rare earth magnets for $9.30 in your local Bunnings store. As the Bunnings website says: “Neodymium rare earth magnets are extremely strong.” So strong that modern wind turbines would be impossible but for the 700kg of neodymium magnets that each turbine contains.
Rare earths are not that rare. Cesium, a so-called rare earth, is in fact the 25th most abundant element in the earth’s crust, and lutetium, the scarcest rare earth, is about the 60th most abundant.
What is rare is finding these elements at sufficient concentrations to support commercial mining operations. That has led to the concentration of production of rare earths in China. Chinese rare earth production accounts for about 70 per cent of global supplies. Australia is the world’s next largest supplier, with 11 per cent of production.
The rise of electric vehicles is also increasing demand for lithium, nickel and cobalt, the main inputs to an electric car battery. Australia has trebled its production of lithium in just eight years and is now the world’s largest producer. About half of the world’s cobalt comes from the Congo.
The explosion of demand for commodities has not so far led to an explosion of supply sources. Part of this is because the concentrated nature of these commodity markets creates barriers to entry. New suppliers face the threat of strategic behaviour from the existing dominant suppliers.
However, given these commodities are essential to so many modern products it would make sense to encourage a more diverse supply of them. That is why the Australian government has announced it will support the development of new sources of rare earth and critical minerals supplies. We are doing that by building infrastructure (like the Mount Tom Price to Karratha Road), innovation (through the establishment of a battery minerals CRC) and investment (by opening up funds in Export Finance Australia to support new projects). We have also announced the establishment of a Critical Minerals Facilitation Office to attract investment in Australian critical minerals and conduct further research on how we can develop more secure supply chains with other countries.
Because Australia cannot do this alone we must seek the support of other countries that will be the primary users of rare earths and critical minerals. Australia has already attracted government backing from Japan for the Mount Weld rare earths mine, the largest producer of rare earths outside China. And we have agreed to work on a joint action plan with the US to identify their needs, Australia’s ability to supply them and how we might work together to get these options into production.
Last year the US identified a list of 35 minerals that are critical to the US economy. The US is 100 per cent reliant on imports for 14 of these minerals.
Australia has potential to supply nine of these 14 minerals, underscoring our ability as a nation blessed with mineral diversity to play an important role in developing mature and diverse supply chains of minerals critical to modern life.
It took about 1500 years from the end of the Roman Empire to the re-emergence of Rio Tinto as a modern mining company that helped fuel the industrial revolution. The resources industry remains critical to technological progress. The industrial revolution would not have been possible without copper, nickel and bauxite. Modern-day activists might like to campaign against mining, often using phones to communicate their propaganda, while not even realising without mining there would be no WhatsApp or wind turbines.
Senator Matt Canavan is the Minister for Resources and Northern Australia
