Paul Scarr (Queensland, Liberal Party) | Hansard source

I also rise to take note of the ministerial statement in relation to the critical minerals strategy. The first point I'd like to make is in relation to some of the points which Senator Cox made. I agree with many of Senator Cox's themes in terms of the need to work closely with Aboriginal and Torres Strait Islander people with respect to the development of mining projects.

But can I say this: in my experience—and I am someone who comes from the Australian mining industry—I would back the Australian mining against any other country's mining industry around the world in terms of its environmental health and safety performance. I want to put on the record excerpts from a recent documentary played by National Public Radio in the United States in relation to what is happening in some parts of the world in relation to the mining of critical minerals. I think this is really important for us to know. If minerals like cobalt aren't mined in Australia, they will be mined in other jurisdictions which do not have the standards which we have in Australia. That mineral will still be mined, but it is preferable that it is mined in a jurisdiction like Australia's, which has very stringent environmental conditions and health and safety requirements and has the rule of law. I want to quote from this documentary that was played on National Public Radio Siddharth Kara, who is a fellow at Harvard's T.H. Chan School of Public Health and at the Kennedy School. He has been researching modern-day slavery, human trafficking and child labour for two decades. He says that although the DRC—the Democratic Republic of the Congo—has more cobalt reserves than the rest of the planet combined, there is no such thing as a clean supply chain of cobalt from the country.

In an article about the documentary Terry Gross writes:

In his new book, Cobalt Red, Kara writes that much of the DRC's cobalt is being extracted by so-called "artisanal" miners—freelance workers who do extremely dangerous labor for the equivalent of just a few dollars a day.

"You have to imagine walking around some of these mining areas and dialing back our clock centuries," Kara says. "People are working in subhuman, grinding, degrading conditions. They use pickaxes, shovels, stretches of rebar to hack and scrounge at the earth in trenches and pits and tunnels to gather cobalt and feed it up the formal supply chain."

Kara says the mining industry has ravaged the landscape of the DRC. Millions of trees have been cut down, the air around mines is hazy with dust and grit, and the water has been contaminated with toxic effluents from the mining processing. What's more, he says, "Cobalt is toxic to touch and breathe—and there are hundreds of thousands of poor Congolese people touching and breathing it day in and day out. Young mothers with babies strapped to their backs, all breathing in this toxic cobalt dust."

It is desperately important—desperately important—that these critical minerals and materials are mined in countries such as Australia, which has checks and balances, like this place, the Senate, where people such as the Acting Deputy President can hold companies to account with respect to their actions in terms of their mining operations in this country. That is the first point I want to make.

The second point I want to make is in relation to Senator McDonald's comments on critical minerals and what is included in critical minerals. Interestingly, the United States actually has two categories: critical materials and critical minerals. They list critical materials, which they define as:

Any non-fuel mineral, element, substance, or material that the Secretary of Energy determines (i) has high risk for supply chain disruption; and (ii) serves an essential function in one or more energy technologies, including technologies that produce, transmit, store, and conserve energy …

The definition of critical materials includes aluminium. It includes copper. It includes nickel and minerals which aren't considered critical minerals under our regime.

Indeed, in relation to the definition of critical minerals, which is defined under the Energy Act 2020 as any mineral, element, substance or material designated as critical by the Secretary of the Interior acting through the Director of the US Geological Survey, the definition specifically includes, again, nickel and zinc, so I think we need to deeply reflect on how we categorise minerals and whether or not they are critical materials or critical minerals in this context. It is quite disturbing that we appear to be out of step with some of our major trading partners. To be frank, if a material is a critical mineral or a critical material in the United States then surely it has to be a critical mineral or critical material in Australia.

Lastly, I want to comment in relation to a matter which is not in my view adequately dealt with in the critical minerals strategy document. And, again, whilst there's much in that strategy document which I do support, there is a lack of awareness that decisions of government at both federal and state level can determine whether or not Australia is seen as an attractive investment destination for our foreign trading partners.

I want to quote from an article by Michael Smith in the Australian Financial Review, entitled 'Australia no longer Japan's "most trusted" LNG supplier'. It reads:

Australia is no longer seen as a trusted supplier of LNG and Japan will seek new sources for gas in Alaska and other parts of the world, one of Japan's top energy advisers has warned as Tokyo ramps up criticism of Labor's new climate policy.

Japan's Institute of Energy Economics chief executive Tatsuya Terazawa said Australia was no longer a candidate to make up any shortfall from reduced LNG supply from Russia, in a damning assessment of the Albanese government's policy which will force gas operators to cut emissions or pay for carbon offsets.

…   …   …

"Australia and Japan worked together at the highest level to develop and support LNG but now changing policies, new constraints and burdens are put in place," Mr Terazawa told a briefing of foreign journalists in Tokyo late on Tuesday.

"It is like changing the rules of the game after the game has started, and the game was started at the highest level.

I just want to repeat that. He said:

It is like changing the rules of the game after the game has started, and the game was started at the highest level.

The article goes on:

"While we understand the need to deal with the environment issue, this long-term trust and win:win relationship that we have developed over the years will have to be more respected."

…   …   …

"Australia has been our most trusted supplier of LNG. Unfortunately, the recent policy changes in Australia put serious questions on the future role of Australia as a reliable supplier of LNG," he said, noting Japan's first shipment of LNG came from Australia in 1989.

"The most likely candidate would have been Australia—

That's what he said—

but with the recent changes in the policies by the Australian government it poses a really serious question as to the future role of Australia as the trusted supplier of LNG.

"That makes us very much concerned and that forces us to look for alternative options for LNG supply in the future and that would include Alaska," he said.

That is sovereign risk. That is our major trading partners looking at policy recalibrations taking place at both the federal and state level and raising the sovereign risk red flag, and that is deeply, deeply disturbing. The mining industry and the oil and gas industry will not invest in this country if they consider that, in the words of this Japanese commentator:

It is like changing the rules of the game after the game has started, and the game was started at the highest level.

That is sovereign risk. And there will be people making decisions around boardrooms all over world who will be considering policy decisions which have been made by this federal government, particularly with respect to pricing control in the gas industry, and also with respect to royalty decisions, including in my home state of Queensland. Decisions will be made as to whether or not Australia is a preferred investment destination. Unless we get those policy parameters correct, we can forget about major investment in this country in the mining and the oil and gas industries.