18 Dec, 2023
Australia skips copper, nickel in critical mineral update, eyes production hubs
| The tankhouse crane at Glencore's copper refinery in Townsville, Queensland. Australia's federal government has created a 'strategic materials' list including copper, separate to its critical minerals list. |
Australia is planning strategic material hubs around the country for nickel and copper after leaving the two metals off its updated critical
The government added fluorine, molybdenum, arsenic, selenium and tellurium to the critical minerals list, Minister of Resources Madeleine King said in a Dec. 16 statement. Helium was removed, thus aligning the list more closely to those of Australia's international strategic partners.
"Critical minerals are crucial to the energy transition, and the newly listed commodities are all used in the defense and technology sectors," King said.
The government also released a new strategic materials list comprising copper, nickel, aluminum, phosphorus, tin and zinc, with plans to "scope the creation of strategic critical minerals hubs around the country," King said. A feasibility study will "explore where federal, state and territory governments could support critical minerals infrastructure precincts [that produce] commodities likely to become subject to supply chain disruptions."
The new lists will help the Minerals Research Institute of Western Australia (MRIWA) determine which metals to support next in order to help some "nascent industries ... get into production" CEO Nicole Roocke told S&P Global Commodity Insights.
Update 'a wasted opportunity'
Association of Mining and Exploration Companies CEO Warren Pearce called the critical minerals list expansion "a wasted opportunity."
"Instead of expanding Australia's critical minerals list to include nickel and copper, they have missed the mark completely," Pearce said in a Dec. 16 statement, adding that by 2050, global nickel demand is set to triple and copper demand is expected to double.
The federal government's separate critical minerals strategy launched earlier this year also left miners underwhelmed and concerned about their competitiveness, particularly regarding processing, in the face of huge incentives being offered in Europe and the US.
"These are hard decisions" as there are only 94 naturally occurring elements, over half of which are already on the critical minerals list, Shannon O'Rourke, CEO of the Future Battery Industries CRC, told Commodity Insights.
Australia and Indonesia were tied for the world's largest nickel reserves in 2022, and Australia had the second-highest copper reserves behind Chile, according to the US Geological Survey.
Funding conundrum
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| NickelSearch's Carlingup nickel project, Western Australia, which is also prospective for lithium. Source: NickelSearch |
For greenfields explorers like NickelSearch Ltd., "a hub doesn't provide any sense of support" other than potentially playing into a project's economics once a discovery is made, and even then it still depends on the proximity to the hub, Managing Director Nicole Duncan told Commodity Insights.
"I absolutely support the idea of hubs for copper and nickel. It's about seeing the government deliver on that," Duncan said. "To create a true hub, they must have government funding; otherwise, there will always be a party that has provided the funding and therefore has a certain amount of control over, and access to, the hub."
While industry awaits details of the hub concept, John Fennell, CEO of International Copper Association Australia, told Commodity Insights that "if it includes pushing for faster regulation and approvals, then we would support it." Fennell said permitting delays were contributing to some smaller copper producers' projects becoming uneconomic.
The absence of copper and nickel from the list means companies with the metals in their portfolios are unable to access the A$4 billion Critical Minerals Facility, Lefroy Exploration Ltd. Managing Director Wade Johnson told Commodity Insights.
"Without that level of support from our federal government, our industry will be forced to look for funding and financing sources elsewhere, potentially from outside Australia, to bring projects forward," Johnson said.
"If Australia as a nation wants to determine where the product goes, it has to participate in the funding of the development decision. There are a lot of explorers competing for a limited amount of capital, and the risk appetite attached to that capital has shrunk over this year, so you're competing for an even smaller piece of a smaller pie," Duncan said.
The Metals and Mining Research team at Commodity Insights sees the copper concentrate market moving into deficit this year. While the global primary nickel market will stay in surplus in 2024, the analysts flagged the possibility that nickel "could be hit by price-supportive mine supply curtailments."