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Building Responsible & Secure UK/ Australia Supply Chains

Building a Responsible and Secure UK-AUS Supply Chains

The Critical Minerals Association collaborated with Austrade and the State Governments of Western Australia, Queensland, and South Australia to deliver a webinar and parallel workshops as part of the Australia Takeover on the 24th of November 2021.

The virtual event, which began with an overview of the Australian opportunity, brought together insights of what is happening in Australia, and provided an opportunity for earnest discussion on how the UK and Australia can collaborate to build secure and responsible critical mineral supply chains.

The CMA was delighted to welcome:

· David Grabau, Head of Resources & Energy, Austrade

· Tony Knight, Chief Government Geologist, Geological Survey of Queensland

· Thomas Northcott, CEO, Vecco Group

· Flavia Tata Nardini, CEO, Fleet Space Technologies

· Jennifer Parker, VP Corporate Affairs, Lynas Rare Earths

· Mark Thompson, MD & Founder, Talga Group

The discussion was moderated by Jeff Townsend, Critical Minerals Association.

I am pleased that we have been able to host this discussion, providing a platform and opportunity for the states of Queensland, South Australia and Western Australia as well as Austrade to have their voice heard in the UK, so we can work to build industrial links between companies here and in Australia.’

Watch the webinar here:

Webinar - The Australian Opportunity

David Grabau - Australian Government: Australian Trade and Investment Commission

My role in the Australian Trade and Investment Commission is to work with Austrade’s extensive offshore network to advocate for Australia as a great place to invest, and focus on what we consider to be sectors of strategic policy interests. For the last two and a half years critical minerals have been the rising star of the resources sector, and we have a real appetite to understand the opportunities in this area.

Australia and the UK have strong and well-established trade and investment links, as well as common values, shared heritages, strong people-to-people links, and a strongly aligned strategic outlook and interests. Additionally, the UK is Australia’s second largest overseas investor, and free trade agreements between the nations are ongoing.

Australia offers significant advantages for critical minerals investors and customers. We are the world's largest producer of lithium, the second largest producer of rare elements with many untapped deposits, and have large resources of cobalt, manganese, tantalum, tungsten and zirconium. Australia has been recognised as an attractive region for mining as a world leader in sustainable practices, with a history of implementing strong environmental and safety management practices, corporate governance, voluntary standards and codes of practice. In addition to our abundant natural resources Australia has one of the most technologically advanced, innovative and efficient mid-sector producing capability in the world, reinforcing Australia’s position as a global hub for mining innovation.

The Australian government has developed a range of initiatives designed to support the development of this important sub-sector. These include sector-wide support through trade and investment facilitation, research and development, and standards and accreditation. These initiatives help create a level playing field and build competitive cost advantages through shared infrastructure and precincts. Strong financial support for critical minerals projects has recently been underlined through the creation of the AUS$2bn critical minerals fund, administered by Export Finance Australia (EFA), created to promote the development of Australian critical minerals projects which have possible spin offs for potential investors and equity partners. Additionally, there are other investment facilities including the Northern Australia Infrastructure Facility and the Clean Energy Finance Corporation, and agencies such as Austrade, which play a key enabling role in the Australian critical minerals sector.

Austrade is Australia’s leading trade and investment facilitation agency working to connect investors and offtakers, to Australian critical minerals projects. We work closely with Geoscience Australia, and other geological agencies to try and harness investment opportunities in Australia. Austrade focuses on markets (such as the UK) where there is demand for Australian critical minerals, and where we can work to de-risk supply chains, target investment and build long-standing value chains. In doing so, we leverage our extensive offshore network and relationships with federal, state and territory governments. Austrade and Geoscience Australia have compiled the critical minerals prospectus, with the third edition due to be released in early December, which highlights more than 40 greenfield investment and offtake opportunities for Australia. The prospectus includes technical, commercial and geological data, to help facilitate international investment into these projects.

Australia has abundant opportunities for new mineral discoveries, as well as having the world’s largest source of recoverable mineral resources. Geoscience Australia has pre-competitive data available, including the Exploring the Future Programme, to support and reduce risk in resource decision-making and investment.

There is great opportunity for collaboration between Australia and the UK in terms of unlocking our midstream. We need to start identifying how Australia can move into the midstream and how that matches up on the demand side from the UK both in offtake and in technical capability. Our success will be in identifying areas of globally competitive capability so we can de-risk these supply chains and build value chains between Australia and the UK.

A lot is being done by the Australian government to help Australia build its downstream capacity, for example Resources Technology & Critical Minerals Processing has been identified as one of the six national manufacturing priorities under the modern manufacturing strategy. Additionally, the Modern Manufacturing Initiative (MMI) has a $1.3b fund attached to build scale in the processing of critical minerals. These strategies will help the development of Australia’s downstream industries, and allow us to work more closely with our trading partners to identify possible gaps where Australia may not be as globally competitive, as well as helping our progression to low-carbon technologies.

Tony Knight, Chief Geologist Queensland

My role as the Chief Government Geologist for the state of Queensland involves leading the Geological Survey of Queensland, which is an economic development agency aiming to help enable industry success in terms of being efficient and effective in exploration, discovery and development of resources. Currently in Queensland there is a lot of energy around ‘new economy minerals’, particularly concerning electrification.

Australia has a very large potential for critical mineral exploration. Through history this has been based on a small number of minerals at scale, with other minerals not being the focus of development as they were not valuable at the time. Because of this, we do not know Australia’s full mineral endowment, and there are great opportunities to revise previous operations and look particularly at tailings to recover critical minerals that were bypassed previously. Our search space for new deposits is wide.

Australia has eight governments, and the key decisions are made at state and territory level which can make things difficult as they all have different rules, regulations and their own trade agencies. Improvements could be made in terms of coordination of governments, but we must not ignore the cooperation that does exist, such as the number of federal organisations that exist around funding for critical mineral industry development.

Governments understand the real opportunity around critical minerals, but we have faced challenges with creating the supply chains to meet the rapidly increasing demand. They are starting to realise that a different approach is needed in creating these critical mineral supply chains, an approach where the government needs to play a larger role.

From a governmental view, the UK can offer markets, market certainty and longevity. Significant investments are required and there are long payback times for processing plants for example. The UK also offers potential in terms of supporting high ESG credentials, ensuring that mining is done correctly in the future.

Tom Northcott, CEO, Vecco Group

Vecco Group is a Queensland-based company developing Australia's first integrated vanadium mine and battery electrolyte production facility, which is expected to begin production from mid-2022. Our strategy is working within our integrated supply chain and working to sell that product into the local markets initially in Queensland, then more broadly within Australia, and finally looking at expanding overseas to Europe and North America.

With deposits like ours, we have seen that historically there may have been very little known about them as there was no market for them. As their value increased, and the availability of capital has expanded, multiple exploration companies have come to market. The benefit of operating in Australia is that the exploration of these minerals will occur within jurisdictions with high environmental and workplace standards, which is of great importance for the end-users.

Small incentives go a long way. We know there is a market out there within Europe, yet some countries are more willing to provide incentives to attract companies, which makes a big difference to where companies will choose to establish themselves.

We are seeing some midstream and downstream potential from UK companies, such as in the electric battery sector. Furthermore, we are finding that it may be the technology sector that fits in more with our midstream industry.

Matthew Pearson, Fleet Space Technologies

Fleet Space Technologies build and operate a constellation of small satellites, focussed on connecting critical infrastructures. We are also keen on critical mineral exploration, providing real-time communication and accelerating cutting-edge techniques which can be used for Australian mineral exploration projects.

In terms of ESG, Fleet Space could allow people to conduct exploration in a way that was not possible 10-20 years ago. Across the board we are seeing old techniques being updated such as the development of low-power sensors that can be hand carried into sensitive environments. With our technologies it is possible to explore large areas much faster without disturbing the environment or having to worry about getting the permitting, which is needed with more invasive techniques. We put out large arrays of passive sensors enabling users to get the results back in real time, a method more responsible and more economical.

We are strongly considering having a greater presence in the UK going forward. Already, Australian businesses are using UK satellites constantly, such as with maritime communications, and we are hoping that this will continue and go both ways so we can aid the UK in tracing its resources as they cross the world, for example, enabling more efficient supply chains.

Jennifer Parker, Lynas Rare Earths

Lynas Rare Earths operates a mine close to Laverton in Western Australia, which is one of the world’s premier resources of high-grade rare earths. From there, we produce a material that is processed in our advanced materials processing plant in Malaysia, which is then sold to customers in Europe, Asia and the US for end products critical to the green transition, such as permanent magnets used in wind turbines, hybrid and electric vehicles. Being an Australian-based company, Lynas benefits greatly from our environmental and safety standards which we then apply in each of the jurisdictions in which we operate. This highlights our key role in supply chain sustainability and supply chain resilience.

Western Australia is in a fantastic position, as it has almost all of the critical minerals in its abundant resources, as well as high ESG standards, leaving it well-placed to provide responsible and traceable rare earths and other critical minerals - qualities that are becoming increasingly important to the end users.

In terms of the midstream, our new Kalgoorlie facility will aid us in developing more onshore processing in Australia. However, you need those downstream supply chains to feed into as well, and we see benefits in being close to the customer when we are refining our material to very particular specifications for their needs. The Australian Government are very supportive of our industry, but we agree that when it comes to areas such as shared infrastructure, there is a bigger role for governments to play in that. This is an area where there may be opportunity for collaboration between the UK and Australian Governments, in order to facilitate these critical mineral supply chains.

Mark Thompson, Talga Group

Talga Group is an Australian-listed company which currently has research and development facilities in the UK focusing on battery anode and graphene additive products, as well as having other branches in Germany, Japan and Hong Kong. For us, the possible links between Australia and the UK regarding supply chains will be heavily centred around lithium-ion batteries, where a key component of these batteries is graphite – a material which the UK does not possess. We see that our large, and low-CO2, graphite deposit in Sweden would suit being processed or worked on downstream in the UK for local manufacturers, as there is an existing car and mobility transport sector that is looking to transform to electrification.

It is essential for governments to get involved in this industry to enable their respective countries to become globally competitive and attract attention, especially since the sector is so resource intensive. Governments need to step in to offset energy costs, invest in cleaner energy, improve restrictions caused by red tape, develop a downstream industry and offset R&D costs to facilitate these industries and allow them to solidify themselves in a global market. These elements will be crucial to further develop the opportunities for collaboration in creating secure and responsible supply chains.

The webinar was followed by two workshops, ‘ESG, Blockchain and Provenance’, led by Sarah Gordon, CEO & Founder, Satarla and ‘Regional and Emerging Markets’, led by Darryn Quayle, VP Resources, Worley.

Workshop - ESG, Blockchain & Provenance | led by Sarah Gordon

Key panellists:

  • Helen Degeling, Director, Minerals Geoscience, Geological Survey of Queensland

  • Leanne Kemp, CEO & Founder, Everledger

  • Cameron Scadding, MD, Source Certain International

  • Anne-Marie Sylvestre, Sustainability Lead and Europe Sales Manager, Lynas Rare Earths

  • Paul Clayton, COO, Circulor

Our speakers brought a wealth of experience to the group, both in terms of using technology to trace the provenance of raw materials, to providing data to companies. When we are thinking about the provenance of information, it is not just the downstream supply chain, from when you have extracted the raw material, processed it, and sold it to the customers, it is thinking about the full value chain of mining itself. We must utilise methods such as mineral resource and reserve reporting codes to make sure that the exploration companies are including ESG in their initial calculations.

The second issue we discussed was how we can be sure that the information supplied can be trusted, and how far we can rely on it to drive the correct kind of behaviours that we want to see in the mining industry.

Thirdly, we held discussions on who should pay for this. Should it be the mining companies that have to pay the price to prove that they are responsible? Or should it be on the customers to pay the price to make sure that the products they are buying are responsible?

Workshop - Regional & Emerging Markets | Led by Darryn Quayle

Darryn Quayle, Vice President, Resources at Worley led the ‘Regional & Emerging Markets’ workshop, with the following participants:

  • Roland Hill, Managing Director, FYI Resources

  • Frank Richards, Marketing Manager, Arafura Resources

  • Mark Thompson, Managing Director & Founder, Talga Resources

  • Paul Atherley, Chairman, Pensana

Our discussion centred around the reasons for setting up in the UK. There are physical factors like availability of customers, energy prices, and the commitment to low-carbon energy, but the UK’s key strength is in its innovation, invention and its technical services which are extremely important factors if Australian companies are to set up there. For smaller and newer critical mineral companies setting up in the UK or Australia, we have the benefit of conducing a life cycle assessment (LCA) and building the project system with the LCA at the front end of it, which is much more of a pragmatic approach then trying to retrospectively implement sustainable practices.

Whilst an assured supply chain in critical minerals is very important to the establishment of the ecosystem in the UK, we shouldn’t lose focus on the fact that the UK is extraordinarily strong in professional and technical services, which enable projects to develop efficiently and at the lowest possible cost. Furthermore, there are numerous incentives that the Australian and UK Governments can provide, which can make the decision-making process easier.

Darryn asked the panel what they thought was needed to get Australian operations in the UK up and running quickly. The panel outlined some of the considerations and challenges to setting up in the UK.

Considerations/ incentives include:

  • Identifying industrial locations which are able to manage reagents, water treatment etc.

  • Ease of planning permission process/ doing business in the UK

  • Access to low cost, high quality, low carbon energy

  • Demand for goods in-country – a local domestic market

  • Tax breaks to attract businesses to the UK

The country in which a company is operating needs to have access to demand in the domestic market otherwise there are unnecessary transport costs added on from transporting goods between markets. It isn’t competitive to move goods between multiple countries. Building operations in mainland Europe provides easy access to other countries on the European continent. The export market in the UK needs to be compelling enough to attract industries to set up there.

Darryn also highlighted that shortening the time to market would be key to getting materials needed for the new technologies for the energy transition quickly.

Some of the UK’s advantages for attracting midstream/ downstream industries from Australia are:

· The patent system

· Technological development such as robotics, drones, sensors, electrification

· UK skills and higher education providers

· Globally recognised UK engineering/ service providers

· Finance – e.g. UK’s Export Credit Agency

· Channels into the EU market

One suggestion that was raised was for the UK to focus on smaller scale, higher margin business models in critical mineral industry development, and for example to develop industries for high performance battery materials.

During the event, the Australians took over the Critical Minerals Association's website. See what the Australians are up to in the Critical Minerals space here:

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