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APPG Critical Minerals: Australia-UK Critical Minerals Strategy


The APPG for Critical Minerals was honored to welcome:

  • Alexander Stafford MP, Vice Chair, APPG Critical Minerals

  • The Hon George Brandis QC, the Australian High Commissioner to the United Kingdom

  • Her Excellency Vicki Treadell CMG, MVO, the British High Commissioner to Australia

  • David Grabau, Senior Investment Specialist, Australian Trade and Investment Commission

  • Edmund Ward, Head of Manufacturing & Resource Strategy, UK Government Department for Business, Energy and Industrial Strategy (BEIS)



Highlights


Alexander Stafford MP, Vice Chair, APPG Critical Minerals


Alexander is interested in the importance of critical minerals for renewable technologies and hosted the first ever critical minerals debate in UK Parliament on 15th March 2021.


We need a safe, reliable source of minerals. The UK and Australia need to diversify away from upstream in countries such as the DRC and to talk about wider issues such as human rights and ecology. As we move to a renewable future we cannot be reliant on countries that we cannot trust. It's important that we increase our ties with countries like Australia with its vast mineral wealth. The UK has mineral potential (e.g. Cornwall) but countries like Australia can support with their skills and expertise in mining.


The Hon George Brandis QC, the Australian High Commissioner to the United Kingdom


Australia has a world leading resources sector and a robust critical minerals strategy which has been active since 2019. Our sustainably sourced and commercially viable reserves of critical minerals are playing a crucial part in high tech applications across sectors as diverse as electric vehicles, renewable energy, aerospace, defence, telecommunications, agri-tech. Given the scarcity of sustainably sourced critical mineral supplies, most of our partners, including the UK are beginning to take a strategic approach to ensuring security of supply of critical minerals and Australia welcomes this. We stand ready to work with the UK in this area.


In Australia, we want to move up the value chain into the minerals processing and advanced manufacturing that will integrate with international supply chains.


Moving to a net zero emissions future will require significant economic transformation and critical minerals will play a crucial role in achieving the climate objectives both our nations share. Clean energy solutions and low emissions technologies (electric vehicles, solar panels, wind turbines etc.) necessitate critical minerals. Critical minerals are essential commodities to our modern lives, global development and our national security as well.


Australia is a big supporter of free, open and transparent markets to get investment flows to where production can occur at the cheapest and most efficient price. But, there are some characteristics of critical minerals that give rise to a need for a level of government involvement - at least at the fledgling stage of development and for the protection of supply chains.


Some of these critical mineral markets are dominated by a very small number of suppliers, complex value chains, significant capital overheads and processing facilities, and relatively small markets. This means only a small number of companies and a small number of countries are involved in any one critical mineral market.


On one level here we should be doing what Governments do when faced with domination in markets - to mitigate the effects of monopolistic and oligopolistic behaviour and promote competition. Future demand for some critical minerals will also create bottlenecks and further strain already fragile supply chains.


Australia is a strong advocate for making sure that mining practices are as sustainable as they can be and as environmentally responsible as they need to be.


International engagement with close and trusted partners is critical. No country can achieve these outcomes by itself. Alongside the ongoing negotiations on the Australia-UK Free Trade Agreement, our two countries have agreed to establish a working group on critical minerals. As a world leader in exploration, extraction, production and processing of critical minerals, Australia stands ready to work with the United Kingdom through this collaborative process.


David Grabau, Senior Investment Specialist, Australian Trade and Investment Commission


Criticality is a subjective phenomenon. A number of countries have critical minerals lists but no two lists are the same. Countries look at what they have, what they need, and how they can maximise their competitive advantage to determine criticality.


Given the volatility of price and small quantities needed for critical minerals, a major challenge for investment is the absence of a floor price. Price is an important element of criticality. It's also absolutely incumbent on companies and countries to ensure ESG principles are strongly embedded in everything we do.


In 2019, the Australian Government established an Australian Critical Minerals Facilitation Office. They lead the development of the critical minerals roadmap, support research and development, promote opportunities with Austrade, and partner with other countries to build global supply chains.


The Australian Critical Minerals Strategy details initiatives such as: attracting new sources of capital and off-take agreements for projects, improving Australia’s geoscience data and developing new technologies and innovation.


There’s a high level of political support for Australia’s Critical Minerals Strategy, which is led by the Prime Minister, and supported by the Ministers for Resources, Trade, Defence, and Science & Technology. This has been crucial to the development of Australia’s critical minerals sector. Projects that boost Australia’s ability to extract and process critical minerals in Australia are eligible for financial assistance through Export Finance Australia.


There is an opportunity for the UK and Australia to collaborate on every element of the critical mineral supply chain and it's about identifying which parts of the supply chain we work together on. Recycling is going to be emerging quickly and there seems to be more progress in the UK on this front.


Her Excellency Vicki Treadell CMG, MVO, the British High Commissioner to Australia


The net worth of critical minerals production and processing to both our economies is inestimable, however we understand that the UK accessible market would be worth £24 billion pounds per annum within the next decade. This is a growth area and something that would be vital to us.


It's not just about securing the supply chains, it's about having an environment with more transparent and better managed global norms. We see huge synergies for what we both want for our respective economies.


The British High Commission commissioned a report to identify how we can best work together with Australia in developing this sector, encouraging the formation of a joint working group between officials to explore bilateral and international cooperation. A further detailed study commissioned by the British High Commission is examining the potential commercial opportunities related to four specific critical minerals projects.


There should be consideration for reduction of pollution, sustainability, and human rights of those who work in these fields. We have worked with the Australian Government and helped to set ISO standards on critical minerals.


Part of our work includes the strategic role and positioning of the City of London. The concern remains investor uncertainty. We must consider how we can create the frameworks that give investors certainty. These projects cost billions and the global supply chain has pinch points that allow price manipulation. We need to find a way to ensure that it is a genuinely level playing field. Competition drives success - but it has to be the right competition. Without demand-led impetus, the market is vulnerable to manipulation by investors and others. Consequently, the UK and Australia need to act in collaboration with other like-minded allies.


Edmund Ward, Head of Manufacturing & Resource Strategy at UK Government Department for Business, Energy and Industrial Strategy (BEIS)


We're keen to continue building on collaborative opportunities in this space. From the UK side examples of collaboration include the Automotive Transformation Fund which has already funded some feasibility projects with Australian companies.


If we look forward, there have been a number of UK policies released over the last 6 months, e.g. the '10 Point Plan for a Green Industrial Revolution' and 'Build Back Better: our Plan for Growth'. Critical raw materials are essential components of these Government announcements and there will be opportunities to build on this going forwards.

Press Release - 15th March 2021: Critical Minerals Make Waves in Parliament


Australia's Critical Minerals Strategy 2019


UK Parliament's First Debate on Critical Minerals - 15th March 2021


Australian_Critical_Minerals_Prospectus
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