Australian natural resources – the future beneath our feet

Scratch beneath the surface, and Australia’s a very rich country indeed. The question is, how do we turn it into dollarbucks?

Well, they say Australia’s the lucky country, don’t they? Sand, sea, sun and a pretty impressive array of beers to boot – how much better does it get?

Literally scratch beneath the surface, and it gets better. And better. And better.
Because our Australian critical minerals and natural resources are epic. They’ve played a massive role in driving the country’s economy so far, and they’re going to play an even more massive role in the global drive for net zero. (Whether you think that’s achievable or an absolute fantasy is another discussion best had over a couple of schooners of that beer we talked about. The point remains, what lies beneath is going to shape the country’s future for generations to come.)

We have it all. Now, what to do with it?

As the world becomes more environmentally conscious, we need low-emission tech. Solar panels. Wind turbines. Batteries. Magnets. All of which require critical minerals.

As luck would have it, Australia won lotto. We’ve got tonnes of the stuff, and to date have been managing it well.

Today, we have some of the world’s largest resources of (take a deep breath) gold, iron ore, lead, lithium, nickel, rutile, uranium, zinc, and zircon.

Also, we’ve got a sh*tload (technical term) of coal, natural gas, bauxite, cobalt, manganese ore and various other minerals. 

And that means opportunity. With a great big capital O.

Who’s paying attention?

Sit back, it’s time for a history lesson.  A short one at least.

We’ve been mining here in Australia for more than 200 years. Coal was discovered near Newcastle, NSW back in 1797, and the gold rushes of the 19th century – but mining really took off in the mid-20th century. From there on into the early 21st century, these resources have really taken off – with global demand and the ease of global trade increasing the potential. 

 In 2022-23, the mining sector overall generated $455 billion in annual export revenue – 66% of all of Australia’s exports.

The challenge – and the opportunity

Loads of stuff that the world wants? Ka-ching! Not so fast. Because, you see, there’s a problem.

We’re just not built to extract and process the volume of stuff in the timespan needed.

Funding the processing facilities is one thing (and we’ll come back to that in a moment). Building them in the sometimes remote locations in which natural resources and critical minerals are found is another.

Then there’s the people needed to work in them. The environmental impact. The transport. The co-operation between state governments (good luck with that one). And the investment.

Because that’s what some of this boils down to – the money to put in upfront. The government has some but not enough. Private investors are needed – and it looks like a good opportunity for them, too.

Research from PwC suggests the post-tax internal rate of return for a critical minerals project was 26%, which is a damn good return in anyone’s book. However, overseas investment in Australian resources brings with it its own set of challenges. 

There’s a whole host of work that needs to be done, and it’s high on the agenda of the people in power. But with short political terms and a focus on self-preservation and populist drum-beating rather than pushing truly long-term initiatives, the desire to make something happen may not be as strong as you’d expect.

But this is a topic that’s interesting to keep an eye on. Not only does the country’s future prosperity rely on it, but it’s also powering increasing numbers of homes and vehicles.

And, if and when processing plants need to be constructed, there’ll be some pretty sweet contracts on offer.