Australian opposition leader backs miners on nuclear as key to critical minerals

Australia's federal opposition leader has united with miners in calling for the government's 26-year-old ban on nuclear energy to be overturned to help unlock the country's abundant critical minerals resources.

The Liberal-National Coalition opposition party proposed June 19 to build and own nuclear power plants in seven locations across regional Australia where there are coal-fired power stations that have closed or are scheduled to close. The coalition could get started on the plan after Sept. 27, 2025, the latest date that the next federal election can be held.

Liberal-National Coalition Party leader Peter Dutton. Source: Office of Peter Dutton.

Peter Dutton, leader of the Coalition, sees nuclear as a viable and essential aid for miners struggling to compete with US government incentives and high energy costs. Miners have long argued for the nuclear energy ban, in place since 1998, to be overturned to aid their energy needs.

Australia has the largest reserves and resources of uranium in the world, more than double Namibia in second place, according to S&P Global Market Intelligence data. The Olympic Dam mine, which has the biggest uranium reserves and resources, is in South Australia.

Australia is already the biggest lithium producer and is in the top six for reserves and resources of critical minerals including lithium, cobalt, graphite, nickel and heavy mineral sands.

"Our allies and partners are looking to Australia to supply and process critical minerals and rare earths, which we have in abundance. These sectors require 24/7 baseload power to thrive," Dutton said in a July 12 email to S&P Global Commodity Insights. "Energy is the economy. Through the Coalition's plan to introduce zero-emissions nuclear technology into Australia's energy mix, we have a chance to leverage growing demand for our uranium and critical minerals, and underpin cheaper, cleaner and more consistent power for our mining sector for decades to come."

Rebecca Knol, CEO of the South Australian Chamber of Mines and Energy. Source: SACOME.

Downstream momentum

Nuclear will also be critical for Australia to move further downstream into advanced manufacturing in the clean energy technology supply chain.

"The advantage of nuclear energy for the mineral sector is in the provision of industrial heat for smelting, refining and processing," Rebecca Knol, CEO of the South Australian Chamber of Mines and Energy (SACOME), told Commodity Insights. "All critical minerals downstream manufacturing requires an industrial heat source, currently provided by coal and gas."

Knol said nuclear would be needed to provide stable power and frequency to new industrial plants.

"Advanced manufacturing [also] requires stable electricity frequency, which cannot be provided through renewable energy, which has an unstable frequency," Knol said. "If Australia is serious about attracting advanced manufacturing investment, then as a nation we need to provide affordable, reliable and stable electricity. Renewables alone cannot achieve this."

Australia is the only one of the top 20 economies not using nuclear in its energy mix, Dutton told Sydney media when launching his party's nuclear proposal.

Increasing energy demand

Australian miners' electricity use reached a multiyear high in fiscal 2021–22, reaching over a fifth of the country's total use, according to data from the Australian government. Yet miners' electricity generation accounted for just 6.6% of the country's total generation that year and remained flat in fiscal 2022-23.

Demand is expected to further rise if Australia grows its capacity to process critical minerals further downstream as desired.

"Nuclear sits in the sweet spot" for critical minerals end-users who want their materials supplied from a source of energy that is low-carbon, and constant for reliable production, said Adrian Paterson, founder and principal of specialist energy systems group Siyeva Consulting.

The Australian government is targeting Australia's heavy industry for decarbonization through the Safeguard Mechanism reform, which aims to cut emissions by 43% by 2030 compared to 2005 levels.

"If this is to be achieved then an alternative industrial heat source to coal and gas needs to be available," Knol said. "Government has latched onto hydrogen to provide this alternative heat source, but the technology is in its infancy and currently not achievable at scale. Nuclear will decarbonize heavy manufacturing by providing a carbon neutral heat source for smelting, refining and processing."

Knol cited South Australia's Nyrstar NV multi-metals smelter facility at Port Pirie, GFG Alliance Ltd.'s Whyalla Steelworks and BHP Group Ltd.'s polymetallic Olympic Dam mine complex as global-scale operations that would benefit from nuclear power.

Albanese doubtful on nukes

Australian Prime Minister Anthony Albanese mocked what he called the opposition's "nuclear fantasy" at a Sky News/The Australian Economic Outlook lunch on June 7. And Minister for Resources Madeleine King indicated in a June 27 speech that the opposition's "uncosted [proposal for a] nuclear industry with so many known unknowns" was a distraction from the government's own critical minerals processing plan, which focuses on renewable power such as solar and wind.

Yet, Paterson, who is also the former CEO of the Australian Nuclear Science and Technology Organisation, said Australia's nuclear ban could be hindering Australia in the global race to provide battery materials, which it has in abundance, as well as uranium.

"Among everybody who we trade with, partner with and has the same democratic values, we're the only one that bans nuclear. So from a geopolitical point of view, we're getting isolated," Paterson told Commodity Insights.