Carol Brown (Tasmania, Australian Labor Party, Assistant Minister for Infrastructure and Transport) | Link to this | Hansard source

On behalf of the Minister for Resources, Ms Madeleine King, I table a ministerial statement on the Critical Minerals Strategy.

Susan McDonald (Queensland, National Party, Shadow Minister for Resources) | Link to this | Hansard source

I move:

That the Senate take note of the document.

I rise to take note of this most important matter, Australia's critical minerals industry. The coalition strongly supports the growth of this sector, one that is so vital to not only Australia's future prosperity but the prosperity and advancement of the world. Delivering ongoing, significant and rock-solid investment into the critical minerals sector is crucial for securing our national security and our economic wealth and for meeting the demands of the future. It is crucial because Australia is fortunate to have a critical minerals sector with such extraordinary potential, hosting vast deposits which are among the world's best. From mobile phones to computers, from microchips to banknotes, from defence to health, the importance of these resources is all around us.

The coalition is proud of what we achieved in critical minerals during our term in government. We created Australia's first Critical Minerals Strategy, a landmark document that signalled stability and certainty and the coalition's commitment to the sector. We delivered an update in 2022 to better reflect the shifting global mineral environment, and in 2019 the former Australian Prime Minister and the US President coordinated the first US-Australian action plan for critical minerals cooperation.

Further to this, the coalition has invested billions developing our critical minerals sector. In 2021, the coalition set up the Critical Minerals Facility, a loan facility specifically targeted at supporting the diversification of the critical minerals value chain, including supply chains and downstream processing. In April 2022, Iluka Resources was awarded an historic $1.25 billion loan to develop Australia's first integrated rare earths refinery at Eneabba in Western Australia. In 2022 the coalition set up the $200 million Critical Minerals Accelerator Initiative to provide targeted funding towards early-stage and mid-stage critical minerals projects. This funding was directed at key projects designed to build our production capability. The first six grants, totalling approximately $50 million of investment, were announced by the coalition in April 2022. Unfortunately, this program was cut by over $100 million by the Labor government, a disappointing blow to other projects seeking to kickstart investment.

The coalition also committed $50.5 million over three years in the March 2022-23 budget to establish the Virtual National Critical Minerals Research and Development Centre. We extended the Junior Minerals Exploration Incentive with an additional $100 million in support and created the $225 million Exploring for the Future program. All of this great work highlights the proud legacy the coalition—in particular the last two resource ministers, Keith Pitt and Matt Canavan—has in the critical minerals space. This is a legacy that has set critical minerals up for a promising, sustainable and productive future.

This now brings us to the minister's announcement last month, the 2023 Critical Minerals Strategy. I wrote to Minister King strongly advocating for the inclusion of potash, phosphate, aluminium, alumina, bauxite, nickel, copper and zinc. To mitigate supply chain risks to regional food security, Australia needs to increase domestic extraction of potash and phosphate in order to secure these minerals, which are vital for large-scale quality food production. Including these on the critical minerals list will help provide security of supply domestically, assist Australia in providing regional food security and help achieve the goal of growing our agricultural industry to $100 billion by 2030.

Further minerals identified on a number of international critical minerals lists—aluminium, nickel, copper and zinc—are essential for the functioning of our modern technologies and economies and, in an increasingly unstable world, are susceptible to the shocks of disrupted international supply chains. Countries around the world have identified the importance of many of these minerals to their economies, with the International Energy Agency, the United States, Canada, Japan, the European Union and the Republic of Korea identifying some or all of these strategic minerals. As we have seen in recent years, global supply chain disruptions can occur at a pace that far outstrips the development of required new mineral resources. As such, the heightened uncertainty of reliable access has driven many nations around the world to strengthen their supply chains for many of the minerals in which Australia is either globally dominant or competitive. However, despite these strong arguments in support of adding these minerals to the list, the government has instead chosen to postpone any further reviews or updates to the strategy until 2026. It's a very disappointing outcome for the sector.

What has the strategy actually outlined? Three of the six key focus areas are concerning to the coalition: promoting Australia as a world leader in ESG performance; unlocking investment in enabling infrastructure and services; and growing a skilled workforce. Firstly, on ESG performance, specifically the calls to streamline the EPBC approvals, the government's work on the review of the EPBC Act does not fill the coalition with confidence. Progress on new environmental laws and standards is stalling under Labor, and, despite having been in the job for over a year, the environment minister still appears to be months away from finishing that work. It is appearing increasingly likely that Labor's approach will culminate in more regulation, more red tape and less incentives and clarity for businesses and resource projects.

Secondly, on infrastructure, it is laughable that Labor now claim one of their priorities is unlocking investment in enabling infrastructure and services when they have done so much damage to the infrastructure sector. In Labor's first budget, they cut $9.6 billion from the infrastructure program. This was in addition to cutting more than $10 billion in regional programs and $7 billion in dams and water infrastructure. In the May budget, Labor announced a 90-day infrastructure review, now pushed out to 105 days, which is expected to make further cuts to road and rail infrastructure across regional Australia. As a result of these delays, projects are being put on hold, some workers stood down and some contracts relinquished.

Finally, on growing a skilled workforce, it is ironic that the Critical Minerals Strategy is calling for a skilled mining workforce when currently the government is trying to push through destructive industrial relations legislation at odds with our nation's mining sector. The government's same job, same pay legislation is deeply misleading. Employers should be able to reward their employees for their individual experience, job performance or ability. Labor needs to stop taking direction from their union paymasters and adopting policies which will not work in reality.

However, despite the issues in half of the government's objectives, what do we find when we unpack the new investment in the sector? It appears Labor are relying on programs delivered by the former federal coalition government as the main investments to develop the sector. They have committed no real programs or initiatives of their own to help investment in critical minerals projects. Labor's budget provided no real investment into the sector, with $57.1 million for the Critical Minerals International Partnerships program and $23.4 million for critical minerals policy development and project facilitation. Both of these funding pools are largely administrative with neither going to supporting new projects or investing in developing our critical minerals reserves. This funding is a drop in the ocean in comparison to the billions the coalition invested, and to quote Mineral Resources managing director Chris Ellison, 'This funding is the Australian government telling industry to go it alone.'

The $500 million investment from the Northern Australia Infrastructure Facility is not new funding, but simply earmarked funding from the $2 billion increase that David Littleproud, as then minister for Northern Australia, along with myself as former special envoy, announced in December 2021. Overall, the coalition strongly support the critical minerals sector. We believe there is a bright future for the critical minerals sector to operate alongside vital traditional resources industries like iron, coal and gas.

The update to the critical minerals strategy provided the government with an opportunity to illustrate its plans for the development of the industry; however, what we saw announced was far more fluff than substance. Australia is on the cusp of reaping the generational rewards of building a vast and substantive critical minerals sector. Every day Australia competes on the global market for investment dollars for our resources sector—dollars that create jobs here in Australia and put money back into our economy. The coalition set a secure foundation for the sector's growth; it is now up to the government to ensure this opportunity is not wasted.

Dorinda Cox (WA, Australian Greens) | Link to this | Hansard source

I rise to also speak to the ministerial statement provided by the Minister for Resources and take note of her statement regarding the government's new and much awaited Critical Minerals Strategy.

In her opening remarks, the minister states that we are on the cusp of the creation of a new resources industry. The minister spoke to the gold rushes of the 1800s, the Japanese investment in iron ore in the 1950s and the expansion of LNG in the 1980s and 1990s. Indeed, the minister also spoke about the benefits genuine partnerships between the critical minerals sector and First Nations people can bring. I note that she also circled around jobs and prosperity in this, which she sees as the very key aspects.

But what the minister failed to mention in particular in this ministerial statement is the dispossession of land, the contamination of sacred groundwater and other water sources, the destruction of cultural heritage and the unequal power balance between First Nations communities and very large mining companies, particularly in this country. The minister is right, in fact, that minerals that will be mined under this strategy are important in our fight against climate change. These minerals are needed for batteries in our electric vehicles, a cohort that I recently joined, and they will be needed for our solar panels, our wind turbines and our hydro facilities. However, we cannot, and we must not, proceed with the same carelessness and disregard of the impacts of these mines as we did with gold, coal and gas. We must learn the lessons that have been presented. They are the lessons of: What is consultation? What is co-design? What is free, prior and informed consent? It's the protection of cultural heritage.

Further to that, we must also consider the environmental impact of these mines. Yes, they may be needed to help us create technologies to transition to clean energy, but mining operations are also energy intensive. They use a lot of water and chemicals to explore, extract, process and transport these minerals. We also can't turn a blind eye to the impacts solely because these minerals are needed to make batteries and our other technologies. There needs to be a balance struck between the need for these minerals and the impact that they have on our water, climate, endangered species and cultural heritage.

Over 60 per cent of the resources projects operate on land covered by native title determination or native title claims, but the fact is that every single mine in this country is on stolen land. Every single dollar that mining companies make in this country is stolen wealth. Every single drop of water that is extracted to process these minerals is a stolen sacred resource. These resources are ours. This is country we have had a connection to for 65,000 years, and the water that runs out into our free country is ours.

Mining companies have a shameful history of strongarming traditional owners, and the Native Title Act unfortunately facilitates some of this. Native title bodies are told that they must provide consent in order to receive compensation, and this is in fact not true. Because of this representation, native title bodies provide their consent because they know that, even if they don't provide consent to that project, it will go ahead anyway and, if there is work happening on their land, they might as well benefit from it. Unfortunately, this is the horrible, horrible situation that traditional owners all over this country are placed in. This is why we need native title reform. We need stronger cultural heritage protections. We need to ensure that free, prior and informed consent is legislated.

For far too long First Nations people have been exploited. Our land has been destroyed. The minister actually refers in her statement to genuine partnerships. Well, I would like to see the model that the minister is proposing for what this would look like and guidelines or examples of what this government thinks genuine partnerships look like and what tangible benefits they will bring to First Nations communities. These benefits go beyond just the promised jobs, the infrastructure and the flash talk that comes along with what mining companies spin when they go into our communities. It's important that governments that are brokering some of these deals actually understand that.

I want to thank the minister, Minister King, who I meet with on a quarterly basis and have a good engagement process with, on her engagement on this critical minerals strategy. I look forward to the future engagement so that these considerations are not lost and to ensure that the right balance is struck and that First Nations people don't bear the brunt of the consequences of a new era of mining in this country. A new era means some of the wealth, some of the development and some of the opportunity needs to be shared.

Paul Scarr (Queensland, Liberal Party) | Link to this | 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.

Slade Brockman (WA, Liberal Party) | Link to this | Hansard source

I, too, wish to rise briefly to talk on the ministerial statement on critical minerals. The key thing here, following on from my friend and colleague Senator Scarr, is that this government is saying one thing but then doing another. It's doing one thing in terms of its legislative performance and it's doing another in terms of the legislative performance of state Labor governments. It's saying on the one hand that we want to see more gas developed but then it is changing the law to make gas development less likely. On the one hand, it is saying we need to see these critical minerals because they will drive things like our development of lower emissions energy systems, such as battery technology, solar technology, wind technology, and that these minerals are critical for that yet, at the same time, we are seeing a regulatory environment that is getting worse and worse for minerals development in this country.

In my own home state of Western Australia, regardless of what you think about the law itself, the Cultural Heritage Act, in its implementation, there is no doubt it has been an absolute disaster. It's been an absolute disaster. It has put a stop to everything from minerals development to literally the planting of trees by greening groups. When you have legislative overreach of that sort then you will have a freeze on investment in things like critical minerals.

The federal Labor government also has a cultural heritage bill somewhere. We don't know where. We don't know what stage it is up to. We don't know any details. We are told it won't override the state law, though I'm not sure how the minister can say that when the state law has been put back on the drawing board, and the Constitution clearly states that federal legislation overrides state law where they conflict. So I do not see how the federal minister can say that the federal law, when it comes to the light of day, when we see a draft of it, will not override the state law.

This government can't have it both ways. It can't say one thing to the left and then another to the right and for both those things to be true because they simply cannot be.

Question agreed to.