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Australia will become a global centre for commercialising and manufacturing cutting-edge technology products and services for the global resources sector that benefit a range of other industries.

Australia will have a strategic critical minerals processing industry that captures significant additional value, strengthens our global position downstream from our resource endowments and underpins a range of advanced manufacturing opportunities.

Resources technology opportunities

Driven by global demand for companies to boost productivity and environmental performance, there are opportunities for Australian resources technology manufacturers to build scale and competitiveness. Globally, mining equipment is expected to generate revenue of US$165.8 billion by 2027 with Asia-Pacific becoming the largest market.[5]

Australian companies are at the forefront of resources technology innovation. Historically, this has been driven by tier-one resources companies developing technologies in-house, or working with technology service providers on solutions which those companies own. More recently, technology manufacturers are collaborating with smaller resource producers and offering innovative solutions to a larger range of clients, including in other sectors. Resource technologies embed a high level of service application in their manufacturing products, and the export market for these services is growing.

Feedback from industry stakeholders highlighted areas of opportunity including technology products and services that:

  • develop technologies to drive operational efficiencies
  • develop products that support sustainability and productivity
  • develop technologies to recover value from waste
  • deploy cross-cutting manufacturing technologies to other sectors.

Developing technologies which drive operational efficiencies

Digitalisation and technological advances are driving a range of cost-saving opportunities across the resource exploration, extraction and processing stages. Novel, cutting-edge technologies such as advanced data analytics and mapping software help Australian producers improve and make smarter decisions that lead to greater competitiveness. This includes energy-saving technologies for extracting and processing ores through products such as:

  • ore body mapping technologies
  • new geophysical tools and drilling technologies
  • automated trucks and robotic equipment
  • grinding and processing technologies.

Adopting these technologies offers enormous cost-saving opportunities for the resource sector. For example, miners in Western Australia using autonomous haulage technology have reported a 20% improvement in productivity.[6] In 2017, CSIRO estimated that advanced analytics applied to complex ore mapping and processing operations can lead to yield improvements in the order of $20–50 billion of additional earnings for resources companies globally.[7]

Analysis in 2015 predicted that data used to improve equipment maintenance timing could result in a 5–10% reduction in costs by 2025.[8]

Australian resources technology companies are already providing these technologies to the sector, but have the potential to greatly expand.

Increasingly, opportunities for Australian manufacturers lie in their ability to deliver premium value products and services to sophisticated markets. These may include:

  • integrating technology to produce smarter solutions to problems. Examples include precision instrumentation, sorting solutions, specialised vehicles and parts, monitoring consoles, processing equipment, and drones
  • providing intelligence to support efficient operations. This includes technology that monitors and improves performance such as digital twinning, predictive maintenance, data analytics, sensors and asset health. Opportunities also exist in developing and deploying technology to enhance and enable equipment performance such as autonomous systems, remote control, augmented reality, artificial intelligence and machine learning.

Australia has significant capability in these technologies and potential to grow. Australia is currently home to 60% of global mining computer software development.[9]

Developing products that support sustainability and productivity in the resources sector

Effective environmental stewardship is driving demand for products and services that reduce the environmental impact of the resources industry. Australia’s high environmental standards have built a strong capability in our technology sector which could help position Australia as a global maker and supplier of technology products that improve the environmental performance of resource development activities.

This includes technologies and services that:

  • extract resources with improved environmental performance
  • improve ore to waste ratios in metal recovery
  • lower the use of toxic or environmentally sensitive chemicals in processing
  • maximise water and emissions efficiencies in operations
  • help companies to monitor and address environmental problems
  • assist companies to rehabilitate resource operations sites and decommission facilities at the end of life. 

Australia’s oil and gas decommissioning liability is estimated to be $60 billion over the next 30 years.[10] As the industry matures, decommissioning efforts will become a greater focus. Australian companies are building technical capabilities in this area, including manufacturing capabilities which are highly sought after by countries with similar requirements.

According to National Energy Resources Australia (NERA), Australia has the potential to become the Asia-Pacific hub for manufacturing equipment and technology for subsea inspection, maintenance and repair. This includes decommissioning offshore oil and gas installations.

Australia’s resources technology industry is also building capabilities in deploying low emissions and renewable energy technologies which opens extensive markets in:

  • renewable micro grids
  • carbon capture, use and storage technologies
  • hydrogen technologies.

Similarly, technologies that improve productivity in difficult environments are highly sought after. Worldwide, the depletion of near-surface high-quality mineral resources and the move to extract ore bodies of increasing complexity and lower grade will drive this demand. This includes technologies which:

  • improve detection of and access to resources at depth. This could include new sensing, predictive modelling and analytical methods, or advanced drilling technologies
  • improve access to more refractory ores or recover metal from waste, for example, hydrometallurgical solutions
  • increase selectivity in mining, materials handling and processing.

Developing technologies to recover value from waste

Waste from mining operations, such as tailings, and ‘end of life’ batteries, e-waste and mobile phones can still hold valuable resources. But they are technically or economically challenging to recover. CSIRO estimates that between 5–7 billion tonnes of tailings are produced globally each year. This presents an enormous opportunity for resources technology companies to develop solutions to extract value from waste. Better management of tailings could also help reduce the potential financial, environmental and safety liabilities following a tailings storage facility collapse. CSIRO estimates this liability to be as much as $5 billion, based on the 2015 Samarco dam collapse in Brazil.

There are a number of companies currently using technology that recovers value from waste in Australia. These technologies make waste material recovery economically feasible, and convert potential liabilities into new resource commodities. New Century Resources is successfully mining the existing tailings storage facility of an old mine site near Mt Isa. Companies, such as SoilCyclers, offer a technology that transforms mining overburden (the heap of earth removed from an open-cut mine) into top soil, using renewable energy. The Tailings and Mine Affected Water cluster comprises a group of companies and industry research organisations who are looking at new and innovative ways to deal with mine affected water.

Investing in manufactured products and services that can recover value from waste streams is a real opportunity for Australia and can bolster its position as a world-leader.

Deploying cross-cutting manufacturing technologies to other sectors

Manufacturing technology for the resources sector can often make an impact in other industries.

Stakeholder feedback emphasised the opportunity for Australian resources technology producers to achieve scale through exploiting cross-sector applications. This can include expanding into adjacent markets that share similarities such as defence, space or agriculture, or deploying technologies to unrelated sectors that can apply innovations in new ways.

Automation, robotics and advanced data analytics are examples of manufacturing technologies that can be used by a variety of sectors. By selling their technological capabilities to other sectors, Australian resources technology companies can reach additional markets, providing manufacturers with the opportunity to scale production across a variety of markets. 

The potential for growing a more broadly focused technology sector is significant. Sweden has demonstrated how to grow a successful technology services sector, off the back of its capability in resource technologies. Some large Swedish companies are world-leading manufacturers but started their lives as suppliers of mining equipment including Epiroc AB, Sandvik AB, Volvo and ABB. These companies have had a successful history of collaborating with mine operators to develop new technologies and adapting those technologies to other industry sectors.

Critical minerals processing opportunities

There is a significant manufacturing opportunity in doing more advanced critical minerals processing in Australia. This processing would provide inputs into a range of future-facing technologies such as:

  • batteries
  • solar cells
  • magnets for traction motors
  • light weight alloys for aerospace and automotive industries
  • wind turbine components
  • fuel cells.

Significant demand growth is forecast for many minerals and metals, and will be exponential across the next 10 years.

Projected demand increases for Lithium-ion metals

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Source: BloombergNEF

Note: Metals demand is assumed to occur approximately one year before battery demand. For example, this would mean metals demand in 2030 is the metal content of batteries deployed in 2031 (with allowances for material waste fabrication). Lithium includes material used in cathodes and electrolytes. It is expressed as Lithium Carbonate Equivalent (LCE). To convert to contained metal, multiply by 19%. Copper includes copper current collectors and pack wiring. Aluminium includes aluminium current collectors, cell and pack materials and aluminium in cathode active materials.

The chart shows the expected growth in demand, in million metric tons, expected for Lithium-ion metals from 2020 to 2030:

  • Copper will grow 7 times
  • Aluminium will grow 9.5 times
  • Phosphorus will grow 10 times
  • Iron will grow 10 times
  • Manganese will grow 4 times
  • Graphite will grow 8 times
  • Nickel will grow 11 times
  • Cobalt will grow 2.4 times
  • Lithium will grow 7.5 times

This table provides the numbers that the chart is based on.

Metal Supply Year

2020e*

2021e

2022e

2023e

2024e

2025e

2026e

2027e

2028e

2029e

2030e

Battery Demand Year

2021e

2022e

2023e

2024e

2025e

2026e

2027e

2028e

2029e

2030e

2031e

Lithium

193,303

283,945

364,505

446,987

535,379

639,956

766,847

921,789

1,082,039

1,283,449

1,456,680

Cobalt

88,291

110,018

121,869

132,250

133,664

141,870

152,482

162,163

172,613

189,353

208,567

Nickel

127,014

209,235

281,927

357,587

440,502

565,518

705,644

853,207

1,035,147

1,242,808

1,430,749

Graphite

238,630

352,527

459,278

571,624

701,119

842,556

1,019,041

1,244,296

1,469,407

1,752,199

1,987,608

Manganese

37,643

52,907

65,337

76,149

78,462

86,650

94,737

104,049

113,296

127,086

143,935

Iron

51,290

73,646

103,338

136,045

186,961

208,774

247,581

322,981

370,969

446,485

493,185

Phosphorus

28,393

40,768

57,205

75,311

103,496

115,571

137,054

178,793

205,358

247,161

273,013

Aluminium

293,126

467,860

617,949

776,978

946,429

1,156,542

1,410,430

1,719,255

2,041,138

2,445,163

2,795,394

Copper

304,492

455,135

588,957

726,421

881,978

1,034,941

1,220,705

1,464,624

1,681,765

1,964,550

2,220,175

*’e’ is an abbreviation for ‘expected’.

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Globally, the supply chain ‘pinch point’ for critical minerals is at the processing and early manufacture stages where markets are highly concentrated. It is clear that many Australian critical minerals projects are seeking to operate in this space. This means moving further downstream into value-added oxides, alloys and precursor materials. Moving downstream will not only help diversify global supply chains, but will also generate new high-paying jobs and manufacturing activity across Australia.

Stakeholder feedback has highlighted that the opportunity for Australia to move up this value chain is time-sensitive. Taking action in the near term will put Australia in a strong position to not only become a world-leading producer of critical minerals, but also a significant market player in those value chains before global supply chains are cemented.

Feedback from industry stakeholders highlighted areas of opportunity including:

  • capturing additional value from our critical raw materials
  • building advantage through commercialisation and innovation
  • leveraging Australia’s world-class environmental, social and governance credentials

Capturing additional value from our critical raw materials

There is an opportunity to capture significant additional value by undertaking more advanced processing in Australia.

For example, an analysis by CSIRO shows that while Australia’s lithium exports in 2017 were worth $1.1 billion, it represented less than 1% of the global battery value chain. While in recent years, Australia has been successful in attracting a number of downstream processing and manufacturing opportunities the benefits generated from this value chain is still very small.

Exponential economic benefits can be realised if industry moves up the value chain at a time when demand is set to skyrocket. Recent forecasts suggest demand for lithium for electric vehicles alone will grow from 25,000 tonnes in 2020, to 425,000 tonnes in 2030.[11]

Battery value chain 2017[12]

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This diagram demonstrates that very little of the value incorporated into lithium ion batteries is retained in Australia. From left to right the diagram shows the value chain in 2017:

  • The Mine/Concentrate phase (hard rock vs brine) is worth $1.13 billion in Australia and $740 million to the rest of the world
  • The Refine/Process phase (LiOH/Li2CO3) is worth $2 billion to the rest of the world with no economic benefit to Australia
  • The Electro-chemical production phase (W.Graphite; Al; Ni; Cu; Si; Co; etc.) is worth $22.1 billion to the rest of the world with no economic benefit to Australia
  • The Battery Cell production phase (Sinter/Assemble) is worth $3.1 billion to the rest of the world with no economic benefit to Australia
  • The Battery Pack/System Assembly phase (Manufacture, Deploy, Manage) is worth $156 billion to the rest of the world with no economic benefit to Australia.

This means that only 0.53% of the battery value chain is realised in Australia.

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Countries can build economies of scale where minerals processing and associated manufacturing occurs at or near the mine site, or near the end-use customer. Given Australia’s geological reserves, there is an opportunity to bring early and mid-stage downstream mineral processing that currently occurs offshore, back onshore.

Taskforce members, the CSIRO and the Future Battery Industries CRC have identified a range of critical minerals and metals which Australia should target.[13] Areas of opportunity for more advanced processing include:

  • lithium (carbonates, hydroxides, precursors and cathodes)
  • nickel (sulphates, precursors and cathodes)
  • cobalt (sulphates, precursors, cathodes, heat-resistant superalloys)
  • high purity alumina (HPA) (synthetic sapphire)
  • vanadium (V2O5 electrolyte, redox flow batteries)
  • graphite (battery anode)
  • manganese (concentrate, sulphate)
  • scandium (master alloys, high performance aluminium alloys)
  • titanium (titanium dioxide, high purity titanium metals)
  • platinum (PGM precursors, proton exchange membranes)
  • chromium (high-strength alloy)
  • rare earths (dysprosium, neodymium)
  • silicon (high purity silicon).

Australia can position itself as a preferred supplier for key manufacturing inputs by supporting firms, including mid-tier resources companies, to invest further downstream where there is additional value to be captured. This will capture significant economic growth and job opportunities in the process.

Examples of Australia’s critical minerals with high development potential[14]

Critical mineral

Geological potential

Economic reserves ranking

Production ranking

Cobalt

High

2nd in the world

3rd largest producer

Graphite

Moderate

8th in the world

No production

Lithium

High

2nd in the world

World’s largest producer

Rare earths

High

6th in the world

2nd largest producer

Titanium

High

Ilmenite: 2nd in the world

Rutile: 1st in the world

Ilmenite: 3rd largest producer

Rutile: world’s largest producer

Tungsten

Moderate

2nd in the world

Minimal production

Vanadium

Moderate

3rd in the world

No production

Nickel

High

1st in the world

4th largest producer

Building this capability in Australia will also allow us to provide processed critical minerals as feedstock for domestic advanced manufacturing supply chains. This includes defence, aerospace, batteries and medical technology. There are also opportunities to develop export relationships with countries looking to partner with Australia to develop alternative supply chains.

In the battery technology value chain, the Future Batteries Industries CRC has completed a detailed audit of Australian businesses’ industrial activity and capability to secure more of this value. It believes Australia can compete effectively in a number of areas including:[15]

  • Refining chemicals (global value $2 billion (2018)): BHP is progressing a nickel sulphate refinery at Kwinana, Western Australia. Projects from other companies are at a pilot or technology development stage.
  • Electro-chemical/pre-cursor and engineered materials production ($22 billion): no current commercial production of electrolytes, cathodes and anodes is occurring but several projects are at the piloting and demonstration stage.
  • Battery cell production ($31.1 billion): There may be niche applications for Australia to develop battery cells for our specific climatic conditions and in mining, defence and utility applications.
  • Battery assembly ($156 billion): Some domestic assembly is currently occurring (for example, Magellan Power in Western Australia and Feline in Queensland) and some projects in the pipeline could expand as the energy transition occurs.
Examples of target opportunities at each production stage

Production stage

Example area of target opportunity

Mining and concentrating

Mining and concentrating for domestic and international markets

Refining to chemicals

Manufacturing battery-grade chemicals, for example: Lithium hydroxide, cobalt sulphate, nickel sulphate, manganese sulphate, refined graphite etc. Australia can compete in the international market for supplying these products as well as used to feed into domestic supply chains.

Precursor manufacture

Manufacturing precursor products and active materials (cathode, anode, electrolytes and separators) that can be exported as well as used in domestic supply chains.

Cell manufacture

Manufacturing and testing of battery cells with properties that meet the demands of a range of speciality domestic applications.

Battery assembly

Small-scale assembly and testing of high-value battery packs that are specifically designed for domestic deployment needs in niche industry applications, for example, defence, mining etc.

Deployment

Deployment of batteries for a number of domestic industries such as defence, mining and utility. For example, industrial scale deployment of batteries for green hydrogen production, renewables and energy storage.

Recycling

Building domestic capability to extract valuable resources from spent batteries.

Building advantage through commercialisation and innovation

Australia has a strong track record in minerals processing innovation. The Australia’s Nuclear Science and Technology Organisation (ANSTO) is a recognised world-leader in rare earths processing innovation. The CSIRO has a demonstrated ability in novel processing technology that could provide Australia with competitive advantages. There are also a number of industry-research collaborations in the critical minerals processing space that are supported by Cooperative Research Centre project grants. Projects include a trial of a battery-grade manganese production pilot-plant, developing a new commercial-scale process for producing high purity graphite, and producing a 99.95% pure vanadium product for redox battery applications.

With the right funding and support mechanisms in place, Australia can leverage existing expertise and capability to commercialise new processes. This will help Australian projects compete with low-cost global producers. An example is the creation of Coogee Titanium by Coogee Chemicals and the CSIRO to commercialise and develop the TiRO process that produces titanium powder.[16]

Leveraging Australia’s world-class environmental, social and governance credentials

Sustainable sourcing and supply chain transparency is becoming more important for Australia’s export partners. Potential customers are looking to purchase key manufacturing inputs (such as battery metals, precursor chemicals and advanced metals) from more environmentally sustainable and ethical sources. This includes prominent mineral end-users and original equipment manufacturers who are beginning to deliberately source processed minerals from a ‘trusted’ third-party. This presents an opportunity for Australia to situate itself as a key global supplier of processed critical mineral manufacturing inputs.

Australia has world-leading environmental, social and governance (ESG) credentials with a reputation as a resources sector operating to the highest standards. Australia can further leverage its ESG credentials to create market advantage for Australian firms over the next decade. Business development and marketing is required to build Australia’s reputation in these areas and establish a viable market which is prepared to pay a premium for products sourced from ethical production jurisdictions.

Promoting technological innovations can further enhance this brand premium. This includes through:

  • using renewable energy sources to cost-effectively value-add our critical minerals
  • switching to electric and hydrogen powered mining fleets and methods of material transport
  • increasing selectivity, sensing and engineering to improve ore to waste ratios and minimising waste including quantified reductions in emissions and water use
  • dry stacking tailings or zero tailings mines
  • in-situ methods for metal recovery.

ESG brand recognition could also be enhanced through building Australia’s position as a leader in sustainable retrieval of critical minerals from tailings and existing products. For example, the Future Battery Industries CRC sees significant potential for Australia to develop technical capability in battery recycling which would extract critical minerals or reconfigure batteries for other applications. Companies such as CleanTeQ are actively developing technology to handle recycling streams from spent batteries as well as metals recycling from their products.

Funding available

The Modern Manufacturing Initiative is now open for resources technology and critical minerals processing projects that meet eligibility under its Translation and Integration streams.

Footnotes

5 Allied Market Research (2019), Mining Equipment Market by Equipment Type

6 McKinsey & Company (2018), Behind the mining productivity upswing: Technology-enabled transformation

7 CSIRO (2017), Mining Equipment, Technology and Services – A Road map for unlocking future growth opportunities in Australia

8 CSIRO (2017), Mining Equipment, Technology and Services – A Road map for unlocking future growth opportunities in Australia

9 DISER (2018), Industry Insights

10 Wood Mackenzie (2020), Australia Oil and Gas Industry Outlook Report

11 Best, A. and Vernon, C. (2020) State of Play, Australia’s Battery Industries. CSIRO, Australia.

12 Best, A. and Vernon, C. (2020) State of Play, Australia’s Battery Industries. CSIRO, Australia

13 Best, A. and Vernon, C. (2020) State of Play, Australia’s Battery Industries. CSIRO, Australia

14 Critical Minerals Facilitation Office and Geoscience Australia

15 Best, A. and Vernon, C. (2020) State of Play, Australia’s Battery Industries. CSIRO, Australia.

16 TiRO® process is a continuous technology for the direct production of titanium powder using a fluidised bed reactor.

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