This page belongs to: Critical Minerals Strategy 2023–2030

4. Promoting Australia as a world leader in ESG performance

Regulatory and policy frameworks set by the Commonwealth Government are fit for purpose and will:

  • enable fast, efficient and durable environmental approvals while upholding robust environmental protections

  • embed strong ESG practices that enable access to global markets

  • support the sector’s enduring social license to operate

  • fairly share the benefits of critical minerals development with communities, including First Nations Australians.

Why action is needed

Australia is a world-leader in developing responsible projects with high ESG credentials. However, we cannot take this for granted. Growing international competition means ongoing and enhanced efforts are required to ensure our critical minerals sector remains a world leader in ESG, and that these credentials are a major point of difference in the global market. Supply chain due diligence and traceability of our critical minerals will be increasingly important in enabling access of Australian critical minerals into global markets. We must also balance the impacts of current energy-intensive extraction, concentration and processing critical minerals projects with our commitment to net zero emissions by 2050. We must do this in a way that supports a sustainable and competitive industry without imposing undue costs or inefficient processes.

Critical minerals projects can benefit communities through:

  • closer partnerships and benefit-sharing with First Nations and regional communities
  • greater representation, equal pay and safer working conditions for women
  • showcasing the world’s best practice for sustainable development and performance. This includes decarbonising operations, effective environmental protection, safe practices and responsible rehabilitation.

'Australia’s international trade and investment infrastructure provides an opportunity for government to promote Australian miners’ ESG credentials to advanced economy customers, through scoreboards, international comparisons and by educating customers on the long-term importance of ESG to the global environment.' 

– Australian environmental services company

What we are already doing

ESG credentials

Australia has some of the world’s strongest ESG performance across indicators including political stability and absence of violence and terrorism, government effectiveness, regulatory quality, voice and accountability, rule of law and control of corruption (World Bank 2022).

This is in part due to our robust legislative frameworks for anti-discrimination, human rights, workplace health and safety, anti-bribery and anti-corruption. Australia’s robust corporate governance and financial disclosure frameworks also support ethical business practices and provide avenues to report unethical practices. Together, these frameworks help demonstrate Australia’s excellent reputation as a stable, trusted and ethical trading partner and improve investment opportunities.

Australia will apply the highest ESG standards and practices relevant to critical minerals to guide investment decisions.

For example, Export Finance Australia applies two globally recognised approaches in environmental and social risk assessment of projects and project related transactions: the OECD Recommendation of the Council on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence and the Equator Principles. All transactions, including those for critical minerals projects, are subject to screening, classification and risk assessment for potential environmental and social impacts. This helps to ensure that projects are developed in a manner that is socially responsible and reflects sound environmental management practices.

Global markets are increasingly placing an emphasis on minerals provenance. Consumers and financiers want to understand the origin of the minerals in their supply chains and to have confidence they have come from high ESG environments. Companies may need to increasingly engage with minerals provenance issues as policy settings evolve in key markets. Focus on traceability and provenance will increase market transparency, which will encourage investment in high ESG markets like Australia, across the whole supply chain. Within Australia, work is underway on a Certification and Life Cycle Analysis for Australian Battery Materials and a Battery Material Provenance Authentication pilot through the Future Battery Industries CRC. Streamlined traceability and certification will improve the marketability of Australian products and reduce compliance costs.

The Department of Industry, Science and Resources is ramping up activities to improve, showcase and draw on the ESG credentials of Australia’s critical minerals sector. We are starting a 4-year pilot program to develop tools and guidance to improve Australia’s critical minerals sector ESG performance.

This work will showcase Australia’s improved credentials to international markets and explore equivalency arrangements that reduce trade barriers with international partners.

International standards development

Australia is working closely with the international standards community and counterpart organisations on critical minerals standards, as well as to help shape critical and emerging technologies more broadly. Australia is engaging with international standards organisations to ensure fairness and transparency in critical minerals supply chains, including through the International Standards Organisation.

Australia’s participation on technical standard-setting committees and advocacy for internationally aligned critical minerals standards is seeking to enable greater interoperability, increase transparency for investors and support the continued growth of Australia’s critical minerals sector.

The Government is also working closely with our partners through the Quad to establish principles for clean energy supply chains in the Indo-Pacific. At the Quad Leaders' Summit on 20 May 2023, Quad leaders announced their commitment to a number of principles, including:

  • diversifying clean energy supply chains in the Indo-Pacific
  • supporting future clean energy workforce needs
  • exploring inter-operability in our technical standards, policies and measures
  • promoting enhanced cooperation to drive towards ESG practices for clean energy supply chains
  • encouraging greater public and private investment and collaboration in clean energy R&D and innovation
  • encouraging and incentivising companies to proliferate decarbonisation solutions.
Case study

Towards Zero Lithium Tailings

Albemarle’s lithium hydroxide refinery at Kemerton in Western Australia uses ore from the nearby world-class Greenbushes spodumene deposit. The tailings from processing hard rock lithium are rich in aluminosilicates but are normally disposed of in tailings storage facilities.

With the support of a grant from the Australian Government, Albemarle is investigating ways to apply a circular economy approach to convert the tailings into new products for use in the transport and construction sectors.

Photo of a lithium refinery
Photo credit: Albemarle Corporation

Environmental technologies and progress towards a circular economy

Australia is a leader in developing and implementing more efficient, safer and environmentally friendly technologies and processes. In partnership with industry, our national R&D institutions are developing and commercialising novel ways to reduce the sector’s environmental footprint, reduce energy requirements, and progress the critical minerals sector towards a circular economy.

Geoscience Australia has published an Atlas of Mine Waste, highlighting opportunities to reprocess previously mined material to extract critical minerals and other resources. The Atlas has identified 1,050 sites across Australia so far which are possible sources of critical minerals.

The circular economy presents an opportunity for Australia to harness the full potential life cycle value of its critical minerals. In 2022, Australia’s environment ministers agreed to work with the private sector to design out waste and pollution and keep materials in use and foster markets to achieve a circular economy by 2030. In support of this, a national Circular Economy Advisory Group has been established and will provide guidance to Government on challenges and opportunities for Australia’s circularity transition.

The group is considering the impact of key international policies on the demand for Australia’s critical minerals. It is also looking at opportunities for Australia to leverage a circular economy approach to maximise the value and trade opportunities of critical minerals, including through recovery, reprocessing and recycling in Australia. This work is being led by Australia’s Chief Scientist through the National Science and Technology Council.

Case study

Chalice Mining – Gonneville Nickel-Copper-PGE Project

Chalice Mining’s discovery of the Gonneville Nickel-Copper-PGE deposit in Western Australia is one of the world’s largest recent nickel discoveries and the largest discovery or platinum group elements in Australian history.

The Gonneville discovery was assisted by pre-competitive datasets available from both the Geological Survey of Western Australia and Geoscience Australia (GA), including a continental-scale analysis of potential for intrusion-hosted Ni-Cu-PGE sulphide deposits in Australia (Geoscience Australia Record 2016/01).

Chalice is progressing the new discovery on farmland and in parallel is exploring the surrounding region, which includes areas of the Julimar State Forest. Recognising the environmental sensitivities of this region, Chalice is using a staged exploration approach as well as innovative low-impact methods.

Chalice has pioneered the use of small, track-mounted diamond drill rigs with telescopic masts and above ground drilling fluids systems in all vegetated areas, which avoids trees and removes the need for any mechanised clearing of vegetation.

Comprehensive baseline flora and fauna surveys, conducted by teams of specialist botanists and zoologists, also ensure impacts from exploration are minimised.

Chalice has engaged Yued and Whadjuk Traditional Owners to conduct cultural heritage surveys to better understand the cultural values of the area. Drilling activities in the state forest are monitored by Traditional Owner representatives, with over 60 Yued and Whadjuk members participating in this work since 2022.

EPBC Act reforms

The Government is already well advanced in reforming national environmental protection laws, including in response to Professor Samuel’s review of the EPBC Act.

The Government is considering how to identify and prioritise strategically significant mineral projects through this process to ensure faster approvals and strong environmental protections. The federal Minister for the Environment and Water and Minister for Resources will meet regularly with state and territory counterparts to ensure these actions align with state and territory efforts to streamline approvals processes.

Emissions reduction

Critical minerals are vital to global efforts to achieve net zero. However, critical minerals mining and processing requires significant amounts of energy, particularly gas (ARENA, 2019).

The Australian resources industry is pioneering and adopting energy-efficient and lower carbon practices. The Government supports these efforts through policy frameworks including the Powering Australia Plan and the Safeguard Mechanism reforms.

The Government is boosting renewable electricity generation in the critical mineral sector through the Powering Australia Plan. This will help drive down project costs and reduce emissions from energy intensive operations. Reforms to the Safeguard Mechanism will give the resources sector the certainty it needs to invest in technologies to decarbonise operations.

A small number of critical minerals mining and processing facilities will be eligible for government support through the Powering the Regions Fund. The fund’s $600 million Safeguard Transformation Stream supports decarbonisation by providing competitive grants to trade-exposed facilities covered by the Safeguard Mechanism.

The Government is also working to improve regulations for carbon capture and storage technologies. This will bring massive-scale hydrogen projects online and develop high-quality carbon offsets.

What we will do

Australia’s ESG credentials are an advantage for our industry, but maintaining them takes time, effort and resources for businesses.

The industry considers reducing the duplication, risk and uncertainty of environmental and planning approvals to be one of the highest priorities for all levels of government. It is important to consider this in the context of international best practice with respect to emissions intensity and environmental impact. Australia’s critical minerals extraction and processing needs to operate consistently with the Government’s broader objectives to decarbonise industry.

Key actions

  • Through the EPBC Act reforms, ensure fast, efficient and certain federal environmental approval processes for strategically significant critical minerals projects and work with states and territories to align reform efforts, while ensuring rigorous environmental standards are upheld.
  • Use national science agencies and R&D initiatives to further reduce the sector’s environmental footprint by adopting renewable fuel, reducing energy requirements, and progressing the critical minerals sector towards a circular economy, for example through recycling and reprocessing materials.
  • Give industry a clear pathway and support to reach net zero by 2050. We will do this through the Powering Australia Plan, Powering the Regions Fund, Safeguard Mechanism and Rewiring the Nation initiative.
  • Develop tools to build industry capability and strengthen existing ESG credentials while pursuing better market access with international partners.