tag:theconversation.com,2011:/au/topics/iron-ore-1061/articlesIron ore – The Conversation2024-03-12T19:14:40Ztag:theconversation.com,2011:article/2192992024-03-12T19:14:40Z2024-03-12T19:14:40ZChina’s green steel push could crush Australia’s dirty iron ore exports<figure><img src="https://images.theconversation.com/files/580605/original/file-20240308-20-db5ci3.jpg?ixlib=rb-1.1.0&rect=51%2C594%2C5760%2C2742&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/hot-steel-on-conveyor-mill-341057252">Zhao Jian Kang/Shutterstock</a></span></figcaption></figure><p>Australia’s <a href="https://www.ibisworld.com/australia/industry-trends/biggest-exporting-industries/">largest export</a>, iron ore, has long been a <a href="https://www.nma.gov.au/defining-moments/resources/iron-ore-exports">powerhouse</a> of economic growth. Over the past two decades, its contribution to our national income has <a href="https://www.aspistrategist.org.au/the-australian-goose-that-lays-the-multi-billion-dollar-iron-ore-eggs/#:%7E:text=Since%202005%2C%20Australia's%20total%20iron,ore%20in%20a%20mutual%20dependency.">surged</a> from just A$8 billion in 2005 to over A$124 billion today. </p>
<p>But the Australian iron ore industry faces a major challenge as its biggest customers – China’s steel mills – move to drastically reduce their <a href="https://interactive.carbonbrief.org/the-carbon-brief-profile-china/">carbon footprint</a>. </p>
<p>The issue lies in the purity of our product. Most of Australia’s current iron ore exports are not classed as high grade. Typically, the lower the iron content of an ore is, the <a href="https://ieefa.org/resources/australia-faces-growing-green-iron-competition-overseas">more energy is required</a> to refine it. </p>
<p>Our competitors – countries such as Brazil and Guinea with higher-grade ores in relative abundance – are positioned to become the steel industry’s suppliers of choice. </p>
<p>Australia could adapt its production to meet this change in demand. But if it doesn’t do so quickly, it may find itself left behind in the new green economy. </p>
<h2>Iron ore’s biggest customer cleans up its act</h2>
<p>China is the largest importer of Australian iron by a hefty margin. Australia shipped <a href="https://www.watc.wa.gov.au/media/lbopz4i3/wa-iron-ore-profile-march-2023.pdf">736 million tonnes</a> – more than 80% of iron ore exports – to China in 2022. </p>
<p>Last year, China’s steel mills made up <a href="https://worldsteel.org/steel-topics/statistics/annual-production-steel-data/?ind=P1_crude_steel_total_pub/CHN/IND/WORLD_ALL">the majority of global steel production</a>. But they were also a major polluter, accounting for <a href="https://www.sciencedirect.com/science/article/abs/pii/S1001074223001936?via%3Dihub">about 15%</a> of China’s total greenhouse gas emissions.</p>
<p>They’re now facing a double whammy of decarbonisation pressures. </p>
<p>At home, the Chinese government has mandated the steel industry reduce its emissions as part of China’s wider <a href="https://interactive.carbonbrief.org/the-carbon-brief-profile-china/">“dual carbon” goals</a>. These will require emissions to peak before 2030 and for the country to become carbon neutral by 2060. </p>
<p>And internationally, <a href="https://ec.europa.eu/commission/presscorner/detail/en/ip_23_4685">upcoming tariffs</a> on carbon-intensive steel imports are set to make producing “dirty” steel much costlier. </p>
<h2>Australian ore doesn’t make the grade</h2>
<p>Making steel with low-grade iron ore isn’t at all carbon friendly. </p>
<p>For one, it <a href="https://www.researchgate.net/publication/290515326_Natural_resources_sustainability_Iron_ore_mining">consumes vastly more energy</a> in the traditional steelmaking process. My analysis shows that using one tonne of low-grade ore can emit over 200 kilograms more carbon dioxide in a blast furnace than high-grade.</p>
<p>A high level of impurities in low-grade ore also significantly reduces the efficiency of the process.</p>
<p>Reducing the use of low-grade ore has become a priority for Chinese steel mills, significantly affecting iron ore’s demand profile. </p>
<p>Much of the iron ore exported by competing nations like Brazil and Guinea is high-grade, containing <a href="https://ieefa.org/resources/australia-faces-growing-green-iron-competition-overseas">more than 65% iron</a>. But most of Australia’s current exports fall below that threshold, between <a href="https://ieefa.org/resources/australia-faces-growing-green-iron-competition-overseas">56% and 62%</a>.</p>
<h2>New technologies</h2>
<p>A number of new and emerging steelmaking technologies offer the promise of significantly lower emissions. </p>
<p>But common to all of them is a need for higher-grade iron ore than Australia produces.</p>
<p>There are four new steelmaking technologies in use or under construction by a number of Chinese steel corporations, including the world’s biggest steelmaker – <a href="https://www.reuters.com/markets/commodities/worlds-top-10-steelmakers-2023-12-19/#:%7E:text=1.,million%20metric%20tons%20last%20year.">China Baowu Group</a>. These include: </p>
<ul>
<li><p>hydrogen-enriched carbon recycling and oxygen furnace (<a href="https://worldsteel.org/case-studies/environment/china-baowu-development-and-application-of-low-carbon-metallurgical-technology-based-on-hycrof/">HyCROF</a>) </p></li>
<li><p>hydrogen reduction and electric smelting process (<a href="https://yieh.com/en/NewsItem/145738">HyRESP</a>) </p></li>
<li><p><a href="https://link.springer.com/article/10.1007/s12613-020-2021-4">hydrogen metallurgy</a> </p></li>
<li><p><a href="https://www.seaisi.org/details/21695?type=news-rooms">green hydrogen zero carbon fluidized bed iron making technology</a>.</p></li>
</ul>
<p>Here’s how these technologies could help China reduce its carbon emissions:</p>
<iframe title="CO₂ emissions reduction (%) achieved by new steelmaking processes" aria-label="Column Chart" id="datawrapper-chart-PuGJ0" src="https://datawrapper.dwcdn.net/PuGJ0/3/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="653" data-external="1" width="100%"></iframe>
<h2>Increased use of steel scraps</h2>
<p>Global demand for steel is forecast to increase to <a href="https://www.woodmac.com/press-releases/decarbonising-global-iron-ore-and-steel-industry-by-2050-necessitates-urgent-action-and-us$1.4-trillion-of-investment/">2.2 billion tonnes by 2050</a>. </p>
<p>But that won’t all translate into greater demand for our iron ore.</p>
<p>Overall demand for iron ore could be reduced by the increasing availability and use of steel scraps or “recycled steel”, such as scrapped vehicles, white goods and machinery. </p>
<p>Using one tonne of recycled steel for steelmaking <a href="https://worldsteel.org/wp-content/uploads/Climate-change-production-of-iron-and-steel-2021.pdf">saves 1.4 tonnes of iron ore and avoids about 1.5 tonnes of carbon dioxide emissions</a>.</p>
<h2>New tariffs on carbon</h2>
<p>A number of legislative measures are on the horizon for the global steel industry, which <a href="https://edgar.jrc.ec.europa.eu/report_2023">produced about 7% of global greenhouse gas emissions</a> in 2022. </p>
<p>One such international measure, the European Union’s Cross-Border Adjustment Mechanism (CBAM), has further accelerated a global drive toward sustainable steelmaking. </p>
<p>This <a href="https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en">legislation</a> acts as a carbon tariff on imports to the EU, initially aimed at carbon-intensive products such as steel. It will be fully in force by 2026. </p>
<p>EU importers of steel products will be required to pay an import carbon tax, at a price set by the EU, based on the differences in carbon emissions between traditional steel mills and the EU’s emission benchmarks. </p>
<p>Being forced to charge higher prices for carbon-intensive steel products will incentivise non-European steel mills to accelerate their transition to green steel.</p>
<h2>What lies ahead</h2>
<p>The global transition to green steelmaking is bound to shape the future of Australia’s iron ore industry. Reduced demand for Australia’s low-grade iron ore could put pressure on its producers’ revenue, or even force some smaller iron ore miners to shut down. </p>
<p>But it also presents opportunities. Here are two ways Australia could ride the wave:</p>
<p><strong>1. Substantially increase production and export of magnetite.</strong></p>
<p>Australia is abundant in magnetite, an ore type which <a href="https://www.ga.gov.au/scientific-topics/minerals/mineral-resources-and-advice/australian-resource-reviews/iron-ore">differs in composition from hematite</a> or “direct shipping ore” (DSO). Magnetite has a low iron content (between 30 and 40%), but can be processed to a higher grade through a process of removing impurities known as “beneficiation”. This process is energy intensive, but could become economically viable if we continue to see rapid uptake of renewable energy. </p>
<p><strong>2. Build direct reduction plants here in Australia.</strong></p>
<p>Unlike the traditional blast furnace process, which uses coal as a source of energy, the direct reduction process uses hydrogen to reduce iron ore into iron without melting it. </p>
<p>There has been <a href="https://www.afr.com/companies/energy/australia-a-hydrogen-superpower-only-if-solar-costs-plummet-20240125-p5ezvr">much hype</a> around Australia’s potential to produce cheap hydrogen with renewable energy. But if we pull it off, we could <a href="https://www.sciencedirect.com/science/article/pii/S0360319923022930">stand at the forefront</a> of the green steel revolution as a global production hub of direct reduced iron. </p>
<p>Decisions made by Australia’s major iron ore producers and political leaders will shape the outcome of this global shift. Rather than fear the transition, Australia could take on a leading role. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/green-or-blue-hydrogen-what-difference-does-it-make-not-much-for-most-australians-223351">'Green' or 'blue' hydrogen – what difference does it make? Not much for most Australians</a>
</strong>
</em>
</p>
<hr>
<img src="https://counter.theconversation.com/content/219299/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Charlie Huang does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>China’s steel mills are shifting to greener production processes which don’t favour Australian iron ore. Australian miners must quickly adapt or get left behind.Charlie Huang, Co-leader, Sustainable Global Business Operations and Development Research Group, School of Management, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2151502023-12-31T20:26:22Z2023-12-31T20:26:22ZEconomically, Australia has been lucky – what matters now is what we do next<figure><img src="https://images.theconversation.com/files/564120/original/file-20231207-15-e6h1m6.png?ixlib=rb-1.1.0&rect=528%2C108%2C473%2C274&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Australia has long thought of itself as the lucky country.</p>
<p>Whenever its economy has started to falter, a commodity boom has usually come along to restore prosperity… until in the 1980s, when the rest of the world failed to rescue us, and we embarked on a decade of reform. </p>
<p>I am afraid the world is going to fail to come to our rescue once again, and this time it’ll be harder to get a boost from reform because the easy reforms have already been done.</p>
<p>Here’s how I see our history from the earliest days of colonisation.</p>
<h2>Exports kept making Australia rich</h2>
<p>For most of those two or so centuries, we have been a <a href="https://www.dfat.gov.au/sites/default/files/australias-trade-since-federation.pdf">commodity exporter</a>, at first specialising in wool and wheat (mainly for the United Kingdom) and later specialising in minerals (initially for Japan).</p>
<p>We had to shift our focus quickly when the United Kingdom joined the European Economic Community in 1973. </p>
<p>Fortunately for us, Japan had surpassed the United Kingdom as our biggest customer the year before, in 1972, as our exports of minerals built steadily following the <a href="https://www.robertmenziesinstitute.org.au/on-this-day/australia-japan-commerce-agreement">Australia-Japan Commerce Agreement</a> signed in 1957.</p>
<p>Taiwan and South Korea later emulated Japan, buying our coal, iron ore and bauxite to modernise their cities as well as for manufacturing.</p>
<p>Demand for these commodities kept building until the late 1970s when it slowed as the East Asian economies matured. </p>
<h2>Then came economic reform, and China</h2>
<p>Demand stayed subdued throughout the 1980s and 1990s as Australia got on with economic reform, boosting the economy by letting in foreign banks, floating the dollar, cutting tariffs, removing cosy regulations and privatising enterprises in fields as diverse as airlines, airports, banking, telecommunications and energy.</p>
<p>By the early 2000s, China was a member of the World Trade Organisation and began demanding Australian iron ore and later coal and education, and the old pattern of commodity booms repeated itself, except this time bigger.</p>
<p>The usual pattern is growth in demand for Australian resources followed by a boom in foreign investment to develop those resources that pushes up the value of the dollar and boosts Australia’s buying power but makes its other exports less competitive.</p>
<p>When demand for resources falls, as is about to happen as China’s economy matures, Australians need to tighten their belts.</p>
<p>That’s unless Australia can find another big market or unleash another wave of economic reform.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/chinas-population-is-now-inexorably-shrinking-bringing-forward-the-day-the-planets-population-turns-down-198061">China's population is now inexorably shrinking, bringing forward the day the planet's population turns down</a>
</strong>
</em>
</p>
<hr>
<h2>China is a hard act to follow</h2>
<p>China’s size makes the export boom we have just had hard to repeat. India has the population and an infrastructure deficit, but more of its own resources, and a more inward-focused growth strategy. </p>
<p>Indonesia has strong growth prospects, but faces challenges investing in infrastructure at scale in its densely populated chain of islands. And Australia faces competition from other commodity exporters. To keep prices high we need global demand to at least keep pace with potential supply. </p>
<p>Yet the International Monetary Fund is <a href="https://www.imf.org/en/Publications/WEO">downgrading</a> its global growth forecasts. </p>
<p>Geopolitical tensions, rising populism and protectionist sentiments, high debt levels and rising rates of natural disasters and climate-related disruptions are all downside risks for global growth, and, with this, the demand for commodities.</p>
<hr>
<p><iframe id="omEG0" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/omEG0/1/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<hr>
<p>The one bright spot is the minerals needed for the <a href="https://www.oecd.org/trade/topics/global-value-chains-and-trade/documents/clean-energy-supply-chains-OECD-G7-202305.pdf">energy transition</a>, where demand exceeds forecast supply. </p>
<p>But Australia has many competitors in the supply of many of these minerals, and we failed to get a head start on the clean energy approaches to processing that would have given us an early advantage.</p>
<h2>We’ll need reforms, but more subtle ones</h2>
<p>So what are our options? </p>
<p>The reforms of the Hawke and Keating governments are still with us, but the declining role of government in the production of goods and services and a generally light-handed approach to regulation seems to have failed to prevent a <a href="https://treasury.gov.au/sites/default/files/2022-10/p2022-325290-productivity-growth.pdf">decline in competition</a> and, with it, a decline in <a href="https://ministers.treasury.gov.au/ministers/andrew-leigh-2022/speeches/fh-gruen-lecture-australian-national-university-canberra">economic dynamism</a>.</p>
<p>While some of the government’s own actions might have dampened competition, it is entirely possible that the government’s withdrawal from all sorts of markets might be allowing those markets to become more concentrated.</p>
<p>It might even be that the government needs to change course again and reenter or better regulate some markets in order to force providers to lift their games. </p>
<p>While renationalisations are neither viable nor sensible, the energy transition and the projected growth of the care sector offer opportunities to reconsider the balance between the roles of government and the private sector.</p>
<p>The recently-announced <a href="https://treasury.gov.au/review/competition-review-2023">Competition Review</a> chaired by Kerry Schott is a step in the right direction.</p>
<p>The right solutions might be more subtle than those that worked in the 1980s. None of them should be off the table.</p><img src="https://counter.theconversation.com/content/215150/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jenny Gordon is an Honorary Professor at the Australian National University and a non-resident fellow at the Lowy Institute. She serves on the Asian Development Bank Institute Advisory Council.</span></em></p>As China winds down it demand for Australian resources, we will be forced to reply once again on economic reform, and the easy options have been taken.Jenny Gordon, Honorary Professor, Centre for Social Research and Methods, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2163732023-10-29T19:12:04Z2023-10-29T19:12:04ZAustralia’s new dawn: becoming a green superpower with a big role in cutting global emissions<p>Australia has three ways it can help reduce world greenhouse emissions, the only reduction that matters in tackling climate change.</p>
<p>First, we can remove emissions from our economy. This will reduce global emissions <a href="https://www.aofm.gov.au/sites/default/files/2022-11-28/Aust%20Govt%20CC%20Actions%20Update%20November%202022_1.pdf">by just 1.3%</a>, but it must be done so we share the transition burden with other countries. </p>
<p>Second, we can stop approving new coal and gas projects, which will raise the cost of these products and so reduce world demand for them to some extent. This would have an important demonstration effect, although the reduction in world emissions may be less than some advocates think.</p>
<p>Third, we can quickly pursue industries in which Australia has a clear comparative advantage in a net-zero world. Of any country, Australia is probably best placed to produce <a href="https://www.youtube.com/watch?v=t6BLjjTW694&ab_channel=ABCNews%28Australia%29">green iron</a> and other minerals that require energy-intensive processing, as well as <a href="https://www.csiro.au/en/news/all/articles/2023/september/sustainable-aviation-fuel">green transport fuels</a>, <a href="https://www.theland.com.au/story/7985444/good-to-go-green-with-green-urea/">urea</a> for fertiliser, and <a href="https://www.afr.com/policy/energy-and-climate/australia-s-green-energy-future-can-maximise-global-decarbonisation-20230906-p5e2c1">polysilicon</a> for solar panels.</p>
<p><iframe id="tc-infographic-973" class="tc-infographic" height="400px" src="https://cdn.theconversation.com/infographics/973/534c98def812dd41ac56cc750916e2922539729b/site/index.html" width="100%" style="border: none" frameborder="0"></iframe></p>
<h2>Australia’s huge green industry opportunity</h2>
<p>Of these three ways, by far the least public discussion is on the third: producing energy-intensive green exports. Yet these industries could reduce world emissions by as much as 6–9%, easily Australia’s largest contribution to the global effort. And it would transform our economy, turning Australia into a green energy superpower.</p>
<p>Australia produces <a href="https://www.mining-technology.com/data-insights/iron-ore-in-australia-2/#:%7E:text=Australia%20accounts%20for%2038%25%20of,share%20being%20exported%20to%20China.">almost 40%</a> of the world’s iron ore. Turning iron ore into metallic iron accounts <a href="https://research.csiro.au/tnz/low-emissions-steel/#:%7E:text=Australia%20produces%20almost%20half%20of,global%20green%20house%20gas%20emissions.">for 7% of global emissions</a>. Our iron ore is largely processed overseas, often using Australian coal, which can be exported cheaply. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-to-beat-rollout-rage-the-environment-versus-climate-battle-dividing-regional-australia-213863">How to beat 'rollout rage': the environment-versus-climate battle dividing regional Australia</a>
</strong>
</em>
</p>
<hr>
<p>In the net-zero world, iron ore can be reduced to iron metal <a href="https://www.ing.com/Newsroom/News/Hydrogen-sparks-change-for-the-future-of-green-steel-production.htm#:%7E:text=The%20magic%20of%20hydrogen%20is,natural%20gas%20instead%20of%20hydrogen.">using green hydrogen</a> rather than coal. Considerable renewable energy will be needed, yet renewable energy and hydrogen are very expensive to export. </p>
<p>Therefore, rather than export ore, renewable energy and hydrogen, it makes economic sense to process our iron in Australia, before shipping it overseas. Doing so would reduce global emissions by around 3%.</p>
<p>Likewise, turning Australia’s bauxite <a href="https://arena.gov.au/blog/green-steel-and-aluminium-production-within-reach/">into green aluminium</a> using low-cost renewable energy could reduce world emissions by around 1%. Making polysilicon is also energy-intensive, so again Australia is a natural home for its production. And Australian low-cost green hydrogen plus sustainable carbon from <a href="https://arena.gov.au/renewable-energy/bioenergy/">biomass</a> are needed for making green urea and transport fuels. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/beyond-juukan-gorge-how-first-nations-people-are-taking-charge-of-clean-energy-projects-on-their-land-213864">Beyond Juukan Gorge: how First Nations people are taking charge of clean energy projects on their land</a>
</strong>
</em>
</p>
<hr>
<h2>From gas and coal power to clean power</h2>
<p>Australia is the <a href="https://australiainstitute.org.au/post/new-analysis-australia-ranks-third-for-fossil-fuel-export/">world’s largest exporter of gas and coal taken together</a>. Some analysts focus on the costs of losing this large comparative advantage as the world responds to climate change. They overlook two key points. </p>
<p>First, Australia has the world’s best combination of <a href="https://www.ga.gov.au/scientific-topics/energy/resources/other-renewable-energy-resources/wind-energy">wind</a> and <a href="https://www.ga.gov.au/scientific-topics/energy/resources/other-renewable-energy-resources/solar-energy">solar</a> energy resources, and enormous sources of biomass for a zero-emissions chemical industry. </p>
<p>Second, we have abundant and much-needed minerals that require huge amounts of energy to process. The high cost of <a href="https://arena.gov.au/blog/can-we-export-renewable-energy/">exporting renewable energy</a> and <a href="https://www.rechargenews.com/energy-transition/opinion-does-it-make-financial-sense-to-export-green-hydrogen-derived-ammonia-around-the-world-/2-1-1325336">hydrogen</a> makes it economically logical for these industries to be located near the energy source. </p>
<p>In other words, more of Australia’s minerals and other energy-intensive products should now be processed in Australia. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/why-australia-urgently-needs-a-climate-plan-and-a-net-zero-national-cabinet-committee-to-implement-it-213866">Why Australia urgently needs a climate plan and a Net Zero National Cabinet Committee to implement it</a>
</strong>
</em>
</p>
<hr>
<p>If Australia seizes this opportunity it can repeat the experience of the <a href="https://aus.thechinastory.org/archive/economics-and-the-china-resources-boom/#:%7E:text=For%20China%2C%20resources%20remain%20the,of%20trade%20surplus%20with%20China.">China resources boom</a> of around ten years ago, but this time the opportunity can be sustained, not boom and bust, with benefits spread over more regions and people.</p>
<p>Some of the actions governments must take to achieve the 6–9% reduction in world emissions will also help to decarbonise our economy. We must develop the skills we need, support well-staffed government bodies to provide efficient approvals for new mines and processes, build infrastructure that will often be far from the east coast electricity grid, and maintain open trade for imports and exports. </p>
<h2>What government must do</h2>
<p>But we also need policy changes to give private investors assistance to bridge the current <a href="https://www.afr.com/policy/energy-and-climate/why-it-will-cost-320b-to-ditch-coal-in-three-maps-and-a-chart-20220608-p5as3t">cost gap between green and black products</a> (meaning ones made by clean or by fossil fuel energy) in these new industries, and to help early movers. </p>
<p>If we help companies to produce these products at scale, costs will fall as processes are streamlined and technology improves. Capital grants for early movers are an option, but more work is needed to determine the best forms of support.</p>
<p>Let’s make a distinction between energy-intensive green products and mining. While Australia should mine the energy transition minerals the world needs – such as lithium, cobalt and rare earths – mining does not need the financial incentives just cited. Critical minerals are used in black as well as green products and Australia already has significant expertise in mining. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-road-is-long-and-time-is-short-but-australias-pace-towards-net-zero-is-quickening-214570">The road is long and time is short, but Australia's pace towards net zero is quickening</a>
</strong>
</em>
</p>
<hr>
<p>Some will argue Australia can wait until other countries have proven the technology and scaled up production so that the green-black price gap disappears; these new green industries will end up in Australia anyway because of our strong comparative advantage. This complacent argument has many flaws.</p>
<p>Australia is making decisions on its climate and economic direction now. If we do not focus on industries in which we have sustainable advantages we will end up damaging our prosperity. For example, we might pursue labour intensive industries that will be low margin and pay low wages, when other countries are better locations for them.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1717381491477590212"}"></div></p>
<p>Second, while technology breakthroughs will be shared internationally, innovation is often about streamlining processes to suit local conditions. If we learn these lessons in Australia, we can achieve lowest-cost world production. If not, these industries could permanently locate elsewhere.</p>
<h2>The need for speed</h2>
<p>Most importantly, Australia needs to move now to put in place the incentives set out above. No other nation that has the capacity to make these energy intensive green products at scale seems focused on the task. If Australia does not do it, the reduction in world emissions could be seriously delayed. </p>
<p>Of all countries, Australia is best placed to show the world what is possible. Companies and countries using conventionally made steel today can say they want to use green iron but none is available. Let’s deny them that excuse.</p>
<p>Once the large investment, productivity and prosperity benefits of this agenda are properly explained, all Australians will applaud it. </p>
<p>What’s more, the level of renewable energy required by the transition will see our power prices fall to some of the lowest in the world.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/worried-economists-call-for-a-carbon-price-a-tax-on-coal-exports-and-green-tariffs-to-get-australia-on-the-path-to-net-zero-216428">Worried economists call for a carbon price, a tax on coal exports, and 'green tariffs' to get Australia on the path to net zero</a>
</strong>
</em>
</p>
<hr>
<img src="https://counter.theconversation.com/content/216373/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rod Sims is also Chair of the Superpower Institute.</span></em></p>Australia has a massive opportunity to reduce global emissions by as much as 9%, all while renewing its heavy industries and economy. But to seize the opportunity, government needs to move fast.Rod Sims, Professor in the practice of public policy and antitrust, Crawford School of Public Policy, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2134712023-09-13T08:37:21Z2023-09-13T08:37:21ZPolitics with Michelle Grattan: Asia expert Richard McGregor on Anthony Albanese’s coming visit to China<figure><img src="https://images.theconversation.com/files/548011/original/file-20230913-17-ou8076.jpg?ixlib=rb-1.1.0&rect=0%2C1%2C1100%2C714&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Integrity20.org</span></span></figcaption></figure><p>Anthony Albanese has now confirmed he’ll be heading to China before the end of the year. He is the first Australian prime minister to visit since 2016, and it is the culmination of an improvement in China-Australia relations since the change of government.</p>
<p>In this podcast, we’re joined by Richard McGregor, an expert on China and senior fellow at the Lowy Institute. He was at the high level dialogue attended by Australian and Chinese retired government officials and others in Beijing on September 6-7.</p>
<p>McGregor says the Albanese trip will be particularly important, given the hiatus between prime ministerial visits.</p>
<blockquote>
<p>We haven’t had a prime minister in China for six, seven years. We all know why that’s the case, it’s not just COVID. It’s also because Australia’s relationship with China went downhill slowly, then quickly to the point where we didn’t have any political dialogue at all for about two to three years.</p>
<p>Our position in South East Asia, our position in the Pacific and our alliance with the United States all are affected by the China relationship. </p>
</blockquote>
<p>While the government has trodden carefully in rebuilding the relationship, McGregor acknowledges there will be risks in the trip. “There are risks, undoubtedly, we’re going up to another level in what the Chinese call a ‘reset’ [and] we studiously call ‘stabilisation’.” </p>
<blockquote>
<p>The Chinese see value in stabilising relations with Australia inasmuch as it sort of turns off a very bad signal that the bilateral fight was sending to the rest of the world. Australia and China had deep divisions [and] we made a lot of noise about it. </p>
<p>Many countries which normally wouldn’t really take much notice of Australian foreign policy, particularly in Europe and to some extent in a different way in South East Asia, in Japan and South Korea, have all watched Australia closely for lessons about how to manage the downside of the relationship. And I think that for China, it wasn’t working for them as well for all sorts of reasons. </p>
<p>So the election allowed the beginning of the stabilisation and I think the Chinese are taking advantage of that.</p>
</blockquote>
<p>Australia and China have been embroiled in a bitter trade dispute since former Prime Minister Scott Morrison pressed for an investigation into the origin of COVID-19 in 2020. Up to $20 billion worth of Australian exports were targeted by the Chinese government. Recently Trade Minister Don Farrell estimated that has come down to $2.5 billion. On the remaining sanctions McGregor sees a mixed picture. </p>
<blockquote>
<p>On the commodities or sectors which are still affected, wine I think is running on its own track – that’s the subject of a World Trade Organisation complaint by Australia. Until we get a draft report with a resolution to that or a decision – Australia seems to expect it will be in our favour – but until we get that we’ll see no movement from China I think. </p>
<p>In the other areas we might get some sort of flashy opening or partial reopening of the punitive trade measures on areas like lobster, around the time Mr. Albanese is to visit. I think that’s a time honoured Chinese technique, to sort of ‘sweeten the tea before it’s drunk’ But no big change I think. </p>
<p>The bulk of [Australian] trade with China, which is dominated by iron ore, LNG and the like, the bulk of that was not affected. That was the fascinating thing about our trade dispute because during that period both sides tried to diversify, and both sides really failed. We still have complementary economies, we sell them stuff that they still need, and China won’t self harm.</p>
</blockquote>
<p>While Albanese has flagged there are no concessions in place for the visit, McGregor says if he doesn’t make any progress regarding imprisoned Chinese-Australians Cheng Lei and Yang Hengjun, it will be “embarrassing and damaging” for his reputation: </p>
<blockquote>
<p>This is where the risks of the Albanese trip comes in - Australia has constantly said that we would go to China without any preconditions and I think that’s fair enough. But if six months or so after the trip […] there’s been no movement on the two high-profile detainees Cheng Lei and Yang Hengjun, then I think that would be very embarrassing and damaging for Mr Albanese. </p>
</blockquote>
<p>Chinese President Xi Jinping and Albanese have a lot of talking points to cover, and McGregor believes Chinese foreign investment in Australia and climate change will be of particular focus: </p>
<blockquote>
<p>China is a big, complicated country, but it’s a clean energy superpower. 90% of solar panels in the world are manufactured in China. […] Yes, they are struggling to get their emissions down because their economy is still growing. Just one figure, the share of coal-fired power in the Chinese economy has gone down from about the mid 70’s to 50% in recent years. </p>
<p>Foreign investment is a point of conflict. […] I think Australia’s going to be very restrictive in the area of lithium and rare earths. And I think the Chinese will be raising that quite vociferously. I expect the Australian response at the top table will be vague, but we’ve already made it pretty clear that we’re not going to allow, potentially, a country which has been unfriendly and which we we have not a great deal of trust in investing in there and potentially dominating that industry in Australia. </p>
<p>Other than that, both leaders will be laying out, I think, their view of the world, their view of the region, their concerns about instability in the region and the possibility of conflict. There are all sorts of things that Mr. Albanese will have to raise.</p>
</blockquote><img src="https://counter.theconversation.com/content/213471/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>In this podcast, senior fellow from the Lowy Institute and expert on Asia Richard McGregor joins The Conversation to canvass the prime minister's coming trip to China.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2014692023-04-03T20:06:58Z2023-04-03T20:06:58ZAustralia’s main iron ore exports may not work with green steelmaking. Here’s what we must do to prepare<figure><img src="https://images.theconversation.com/files/518959/original/file-20230403-28-92q6tv.jpg?ixlib=rb-1.1.0&rect=28%2C7%2C4750%2C3173&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Making steel was responsible for <a href="https://missionpossiblepartnership.org/wp-content/uploads/2022/09/Making-Net-Zero-Steel-possible.pdf">about 7%</a> of global greenhouse gas emissions in 2020. That’s because steelmakers in countries like China, Japan and South Korea have long relied on fossil fuels like coal to make steel in blast furnaces. </p>
<p>But change is coming, as the world works to decarbonise. Researchers and steelmakers are exploring new ways of making steel without using coal. </p>
<p>If the move to green steel gathers speed, Australia could be left behind. That’s because even though we’re the world’s largest exporter of iron ore, some of the new techniques rely on ore with a higher purity than we currently export. Coal exporters could also lose income, as we’re the largest exporter of the coking coal burnt in furnaces using current technology. </p>
<p>To avoid this, we should plan for a green steel future. Our <a href="https://energytransitionsinitiative.org/wp-content/uploads/2023/02/Pathways-to-Industrial-Decarbonisation-report-February-2023-Australian-Industry-ETI.pdf">recent report</a> on opportunities for Australian industry to decarbonise suggests this is possible. Australia can make the transition to green steel and remain a major global player. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/518966/original/file-20230403-22-km64zt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="steelmaking" src="https://images.theconversation.com/files/518966/original/file-20230403-22-km64zt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/518966/original/file-20230403-22-km64zt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/518966/original/file-20230403-22-km64zt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/518966/original/file-20230403-22-km64zt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/518966/original/file-20230403-22-km64zt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/518966/original/file-20230403-22-km64zt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/518966/original/file-20230403-22-km64zt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Steelmaking is an energy-intensive process - but it’s becoming possible to do it without fossil fuels.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>Why would Australia be affected by a shift to green steel?</h2>
<p>Emerging steelmaking technologies are well along the path to development. Sweden produced the <a href="https://www.theguardian.com/science/2021/aug/19/green-steel-swedish-company-ships-first-batch-made-without-using-coal">first batch</a> of steel made without coal in 2021. </p>
<p>This steel was made using a direct reduced iron-electric arc furnace process, which can be powered with renewable energy and green hydrogen. While the pilot schemes are promising, this technology could take until the late 2030s to be available at scale. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/518980/original/file-20230403-20-yz4916.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="chart direct reduced iron" src="https://images.theconversation.com/files/518980/original/file-20230403-20-yz4916.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/518980/original/file-20230403-20-yz4916.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=173&fit=crop&dpr=1 600w, https://images.theconversation.com/files/518980/original/file-20230403-20-yz4916.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=173&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/518980/original/file-20230403-20-yz4916.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=173&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/518980/original/file-20230403-20-yz4916.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=218&fit=crop&dpr=1 754w, https://images.theconversation.com/files/518980/original/file-20230403-20-yz4916.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=218&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/518980/original/file-20230403-20-yz4916.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=218&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">This figure shows what’s involved in making green steel using the direct reduced iron-electric arc furnace process.</span>
<span class="attribution"><span class="source">Australian Industry Energy Transitions Initiative</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>The problem for Australia is this approach needs high purity ore. At present, the bulk of our iron ore exports would simply not be compatible, as there are too many impurities.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/green-steel-is-hailed-as-the-next-big-thing-in-australian-industry-heres-what-the-hype-is-all-about-160282">'Green steel' is hailed as the next big thing in Australian industry. Here's what the hype is all about</a>
</strong>
</em>
</p>
<hr>
<p>Australia exports two main types of iron ore: hematite and magnetite. </p>
<p>Hematite is mined in Western Australia’s Pilbara. It’s a naturally higher-grade ore (56–62% iron) and makes up <a href="https://www.ga.gov.au/scientific-topics/minerals/mineral-resources-and-advice/australian-resource-reviews/iron-ore#:%7E:text=Approximately%2096%25%20of%20Australia's%20iron,grade%20hematite%20iron%20ore%20deposits.">almost all</a> (96%) of our exports. </p>
<p>Magnetite is a lower grade ore (25-40% iron) which needs extra processing. This processing, however, produces ore with more iron content, fewer impurities and less waste rock (known as gangue) than hematite. </p>
<p>It’s also, as the name suggests, magnetic. That makes it possible to efficiently separate iron from waste rock using magnets. </p>
<p>Why does this matter? Because this processing converts lower grade iron ore into a product compatible with direct reduced iron-electric arc furnace technology. </p>
<p>You might wonder why it’s important to get rid of waste rock. Doesn’t it slough off in the furnace? In a traditional blast furnace, this is true. But in the direct reduction process, the iron ore doesn’t actually melt. And the next step – the electric arc furnace – can’t handle too many contaminants. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/518978/original/file-20230403-26-rc3oiw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="chart on green steel" src="https://images.theconversation.com/files/518978/original/file-20230403-26-rc3oiw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/518978/original/file-20230403-26-rc3oiw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=275&fit=crop&dpr=1 600w, https://images.theconversation.com/files/518978/original/file-20230403-26-rc3oiw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=275&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/518978/original/file-20230403-26-rc3oiw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=275&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/518978/original/file-20230403-26-rc3oiw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=345&fit=crop&dpr=1 754w, https://images.theconversation.com/files/518978/original/file-20230403-26-rc3oiw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=345&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/518978/original/file-20230403-26-rc3oiw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=345&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">This chart shows a comparison between hematite and magnetite processing. Magnetite processing requires more steps but produces a product more compatible with current green steel methods.</span>
<span class="attribution"><span class="source">Australian Industry Energy Transitions Initiative</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<h2>Hematite or magnetite?</h2>
<p>This leaves us with a predicament. </p>
<p>Our major iron ore export, hematite, won’t be able to supply green steelmakers using one of the leading technologies. But our much smaller ore type, magnetite, could. </p>
<p>If we develop new methods of processing hematite to allow it to be used in green steelmaking, we could keep current mines open and preserve existing markets. But it would mean significant research and development to make possible commercially viable methods. </p>
<p>The other option is to accelerate mining of magnetite, because processing this kind of ore is well understood. </p>
<p>Some Australian miners are already heading down this path. Fortescue’s Iron Bridge <a href="https://www.fmgl.com.au/in-the-news/media-releases/2022/10/31/fortescue%E2%80%99s-iron-bridge-magnetite-project-marks-first-ore-into-processing-plant">magnetite project</a> in the Pilbara is scheduled to begin production this quarter. </p>
<p>Magnetite is also recognised as an opportunity in South Australia, given it makes up 90% of the state’s ore body. The state government has set a target of 50 million tonnes per year <a href="https://www.energymining.sa.gov.au/home/events-and-initiatives/initiatives/magnetite_strategy">by 2030</a>.</p>
<p>To ensure expanded mining of magnetite is sustainable, we need strong benchmarks to limit emissions and broader environmental impacts from new mine facilities. </p>
<p>That’s because the actual mining of iron ore is an emissions-intensive industry, given it relies on heavy machinery. But our modelling shows there are pathways to progress here too, with electrification and fuel switching. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/518970/original/file-20230403-14-ymxurn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="BHP Yandi mine" src="https://images.theconversation.com/files/518970/original/file-20230403-14-ymxurn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/518970/original/file-20230403-14-ymxurn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=357&fit=crop&dpr=1 600w, https://images.theconversation.com/files/518970/original/file-20230403-14-ymxurn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=357&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/518970/original/file-20230403-14-ymxurn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=357&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/518970/original/file-20230403-14-ymxurn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=448&fit=crop&dpr=1 754w, https://images.theconversation.com/files/518970/original/file-20230403-14-ymxurn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=448&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/518970/original/file-20230403-14-ymxurn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=448&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The Pilbara’s iron ore exports are almost all hematite, which has impurities incompatible with current green steel approaches.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/ginger_ninja/637464434/in/photolist-YkaY7-2hrstKo-cxfT9E-2hrvxf1-7kp6EG-oK8DaS-ku53Gu-8TxH3Z-otkudZ-qhQq3k-bjzXw9-agvRXC-otEyPB-2hmWG4Q-c3wr51-kB5HtL-7ZeoAR-2hrRs9E-orUXXM-8MTUfw-NLNEvG-njV3hk-YfJUM-dZSA1y-7kp6G1-TJJNK1-nBq6dV-oMz4Bp-nzoNeE-nprLbh-nFWGWp-nps7k4-njWJkL-bG6SBi-oK8GRD-npsvaT-nCp21d-agvPKU-njWVuE-njWFz6-nFS3jT-aGLGUp-njWQRU-nErKuK-bGPeLD-7HWVkc-bW9tkz-njWHhq-nFWz1z-YkiKS">Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<h2>Are other green steel techniques better suited to Pilbara ore?</h2>
<p>The direct reduction method being pioneered in Sweden isn’t the only way to clean up steelmaking. </p>
<p>We looked at a range of potential low-emissions steelmaking techniques, some of which could make use of Australia’s existing hematite exports. </p>
<p>Australian steelmaker Bluescope and multinational miner Rio Tinto are exploring <a href="https://www.youtube.com/watch?v=eEY0I_ORnDE&ab_channel=TVBlueScope">another method</a>, using direct reduction to get rid of oxygen, melting the ore to remove impurities, and then using a basic oxygen furnace to make steel. This, they hope, will let them keep using Pilbara hematite ore. </p>
<p>Other emerging steelmaking techniques, such as <a href="https://cordis.europa.eu/project/id/768788">electrolytic steelmaking</a>, should also be developed to ensure there are plenty of options for the use of hematite in zero emissions steelmaking in the future.</p>
<p>Fortescue Future Industries recently announced they have succeeded in producing <a href="https://energyandmines.com/2023/03/fortescue-future-announces-breakthrough-conversion-of-iron-ore-into-green-iron/">zero carbon iron</a> using an electrolyser and a membrane, but so far have not provided details of the process.</p>
<p>It’s hard to give concrete timelines for these changes, as a transformation at this scale will require coordinated effort. Each of these technologies requires significant investment and a massive build-up of reliable, cost-competitive renewable energy and green hydrogen production. </p>
<h2>Planning and action is needed now</h2>
<p>As you would imagine, steelmaking companies plan for their plants to last decades. This timeframe means decisions being made now will affect emissions in the future. </p>
<p>It’s vital Australia is prepared for the shift to green steel. We’ll need a national strategy to futureproof iron ore production, and iron and steel supply chain roadmaps to get suppliers, finance, consumers and decision-makers on the same page in working to take the fossil fuels out of industries.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/red-dirt-yellow-sun-green-steel-how-australia-could-benefit-from-a-global-shift-to-emissions-free-steel-179286">Red dirt, yellow sun, green steel: how Australia could benefit from a global shift to emissions-free steel</a>
</strong>
</em>
</p>
<hr>
<img src="https://counter.theconversation.com/content/201469/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Dr Tessa Leach works for Climateworks Centre. She is a member of the Australian Industry Energy Transitions Initiative, which received funding from the Australian Renewable Energy Agency.</span></em></p><p class="fine-print"><em><span>Dr Tyra Horngren works for Climateworks Centre. She is a member of the Australian Industry Energy Transitions Initiative, which received funding from the Australian Renewable Energy Agency. </span></em></p>Promising new green steelmaking techniques won’t work with our main iron ore exports. We must future proof this key industry.Tessa Leach, Senior Analyst at Climateworks, Monash UniversityTyra Horngren, Senior Analyst (Industry System), Climateworks CentreLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1764522022-03-22T21:12:41Z2022-03-22T21:12:41ZThe economic case for the mining industry to support carbon taxation<figure><img src="https://images.theconversation.com/files/452923/original/file-20220317-23-1fpa886.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C8264%2C3301&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">RioTinto's Kennecott mine in Utah produces a variety of metals, including copper, gold and silver.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/19779889@N00/36571631266">(arbyreed/Flickr)</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-sa/4.0/">CC BY-NC-SA</a></span></figcaption></figure><p>As governments try to navigate a path to a safe climate in the 21st century, the public debate has focused on net zero, carbon taxes, electrification and renewable energy. Mining is rarely an anchor point of the discussion, even though renewable energy infrastructure and low-carbon technology require vast amounts of metals and minerals. </p>
<p>Nickel, for example, is essential for electric vehicles and battery storage. The amount of nickel required by 2040 for the energy transition alone will be <a href="https://www.iea.org/reports/the-role-of-critical-minerals-in-clean-energy-transitions/executive-summary">equal to the total demand for nickel across all industries in 2020, according to the International Energy Agency</a>.</p>
<figure class="align-center ">
<img alt="a graph showing projected demand for copper and nickel increasing over time." src="https://images.theconversation.com/files/448160/original/file-20220223-25-5f0cjt.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/448160/original/file-20220223-25-5f0cjt.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=385&fit=crop&dpr=1 600w, https://images.theconversation.com/files/448160/original/file-20220223-25-5f0cjt.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=385&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/448160/original/file-20220223-25-5f0cjt.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=385&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/448160/original/file-20220223-25-5f0cjt.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=484&fit=crop&dpr=1 754w, https://images.theconversation.com/files/448160/original/file-20220223-25-5f0cjt.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=484&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/448160/original/file-20220223-25-5f0cjt.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=484&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Projected demand change for copper and nickel requirements for energy transition technology. The solid bars show the amount of metal demand projected for the energy transition, while the transparent bar shows the actual total demand for copper and nickel across all industries in 2020.</span>
<span class="attribution"><span class="source">(Cox et al. 2022)</span></span>
</figcaption>
</figure>
<p>There is widespread consensus among economists that <a href="https://policyintegrity.org/files/publications/ExpertConsensusReport.pdf">carbon taxation is one of the most effective policies to reduce carbon emissions</a>. Presently, <a href="https://carbonpricingdashboard.worldbank.org/map_data">27 countries have enacted carbon taxation policy at the national level</a>, yet only <a href="https://www.statista.com/statistics/1114898/leading-mining-countries-worldwide-based-mineral-production-value/">seven are leading mining countries</a>, and mining companies and industry organizations oppose carbon taxes in many of these countries. </p>
<p>Addressing climate change requires a coalition between industry and government. The idea that the industry supplying the technology for renewable energy is also opposing the economic policy needed to curb emissions is counter productive. </p>
<p>Simple economic modelling proves that resisting a carbon tax is the wrong strategy for the industry. <a href="https://doi.org/10.1038/s43247-022-00346-4">Our recent paper</a> shows that the mining industry has an economic incentive to support a tax on carbon dioxide emissions. </p>
<h2>Opposed to taxes</h2>
<p>The mining industry has historically opposed taxes, especially carbon taxes. When <a href="https://www.legislation.gov.au/Details/C2011A00131">Australia introduced a price on carbon emissions in 2011</a>, the Minerals Council of Australia led a <a href="https://doi.org/10.1080/13567888.2011.640030">multi-million-dollar campaign against the carbon tax policy</a> even though there are <a href="https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd1112a/12bd068#_Toc308423383">tax-relief provisions for emissions-intensive industries such as steel and coal</a>. </p>
<p><a href="https://www.theguardian.com/environment/2014/jul/17/australia-kills-off-carbon-tax">The Australian carbon tax policy was repealed in 2014</a>, but some mining groups do support carbon taxes. <a href="https://www.theguardian.com/business/2019/aug/04/bhp-could-quit-minerals-council-after-clashes-over-climate-policy">BHP Billiton Ltd. supported carbon pricing in 2017 and distanced itself from the Minerals Council of Australia</a>. </p>
<p>This fractured industry standpoint on carbon pricing is also present in Canada. <a href="https://www.reuters.com/business/sustainable-business/worlds-largest-miners-pledge-net-zero-carbon-emissions-by-2050-2021-10-05/">Some mining companies have made public commitments to carbon neutrality by 2050</a>, yet there has been opposition from some industry groups at the provincial level. </p>
<h2>Metals out, a little CO2 in</h2>
<p>There are many factors throughout the mining process that contribute to carbon emissions. The commodity being mined heavily influences the amount of emissions and where the emissions are generated throughout the mining process. </p>
<p>For iron and steel most emissions are generated in the later stages during <a href="https://www.ctc-n.org/technologies/smelt-reduction-iron-and-steel-sector">smelting</a>. Mining copper ore, on the other hand, generates most of its emissions in the earlier stages <a href="https://copperalliance.org/wp-content/uploads/2020/07/Emissions-Copper-Mine-of-the-Future-Report.pdf">during the crushing, grinding and hauling of ore</a>.</p>
<p>One way to look at the impacts of carbon taxation in mining is to compare the commodity’s carbon footprint to its economic value. For example, <a href="http://hdl.handle.net/102.100.100/101541?index=1">the average carbon footprint of copper</a> is 3.83 tonnes of carbon dioxide per tonne of copper. </p>
<p>So, for each tonne of carbon dioxide emitted, 261 kilograms of copper worth US$1,700, using 2019 copper prices, are produced. This is a relatively high value. The same cannot be said for other industries, like animal agriculture, where a tonne of carbon emissions corresponds to about US$125 of wholesale beef (using equivalent 2019 pricing). </p>
<h2>How would a carbon tax affect mining?</h2>
<p>The basics of a carbon tax are that more carbon-intensive industries will be taxed more. Our study tested three levels of carbon taxation: US$30, US$70 and US$150 per tonne of carbon dioxide, and compared them against commodity prices in 2019. These levels closely follow <a href="https://www.canada.ca/en/environment-climate-change/services/climate-change/pricing-pollution-how-it-will-work/carbon-pollution-pricing-federal-benchmark-information/federal-benchmark-2023-2030.html">the Pan-Canadian approach to carbon pollution pricing</a>, which are currently set to $50 per tonne and increase $15 per year to $170 in 2030. </p>
<p>We modelled the impact of a carbon tax on a range of commodities. Our model included all <a href="https://www.epa.gov/climateleadership/scope-1-and-scope-2-inventory-guidance">Scope 1 and Scope 2 emissions</a> — direct emissions from the source and indirect emissions associated with heating, cooling or electricity. The production of some commodities is more carbon-intense than others, which affects the impact of the carbon price. </p>
<p>In some cases, the carbon tax can be greater than the product’s value. When the price of carbon is US$150, coal is taxed at 144 per cent of its value. Copper, on the other hand, is taxed at 10 per cent of its value. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/448164/original/file-20220223-21387-17vmmj.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/448164/original/file-20220223-21387-17vmmj.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=344&fit=crop&dpr=1 600w, https://images.theconversation.com/files/448164/original/file-20220223-21387-17vmmj.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=344&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/448164/original/file-20220223-21387-17vmmj.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=344&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/448164/original/file-20220223-21387-17vmmj.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=433&fit=crop&dpr=1 754w, https://images.theconversation.com/files/448164/original/file-20220223-21387-17vmmj.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=433&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/448164/original/file-20220223-21387-17vmmj.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=433&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The impact of three levels of carbon taxation (US$30, $70 and $150) modelled as a percentage of present product value for selected commodities. This shows that most mining industry and energy transition commodities will not be taxed to the same degree as other commodities.</span>
<span class="attribution"><span class="source">(Authors)</span></span>
</figcaption>
</figure>
<p>Two metals are outliers to the industry: aluminum and steel. The mining of the raw materials are not carbon intensive. Bauxite and iron ore generate 0.005 and 0.02 tonnes of carbon dioxide per tonne of product respectively, but smelting these ores into metals emits more carbon in production.</p>
<h2>Mining for carbon taxes</h2>
<p>Outside of aluminum refining and steel mills, the mining industry will perform better with a carbon tax than it would without one. This is because the carbon tax would increase the price of fossil fuels relative to renewable energy and the materials required for renewable energy technology.</p>
<p>For example, the costs of coal used for energy production will more than double, making electricity from coal increasingly uncompetitive. The rising demand for solar and wind power will drive further increases in the consumption of base metals for wind turbines and solar panels. </p>
<p>If implemented on a global scale, a carbon tax would not change the underlying cost of the base metal business, but it does have vast financial benefits for the mining sector. These benefits come from the increased demand for metals from the energy transition, paired with a relatively lighter percentage of global carbon taxes, in comparison to other industries. </p>
<p>Rather than opposing carbon taxes, the mining sector should become a global advocate for aggressive carbon targets, the harmonization of international carbon taxes and pursue further reductions to emissions such as the <a href="https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/fintech-company-aims-to-simplify-electrification-of-mining-sector-ceo-says-60076285">electrification of fleets</a> or <a href="https://magazine.cim.org/en/environment/tailings-to-the-rescue-en/">carbon offsets</a>.</p><img src="https://counter.theconversation.com/content/176452/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sally Innis receives funding from NSERC. Some of her research projects are industry partnered with FL Smidth.</span></em></p><p class="fine-print"><em><span>Benjamin Cox receives research funding from various sources, including the Canadian Federal Government through the NSERC, and MITACS, industry partners Eriez, FL Smidth.</span></em></p><p class="fine-print"><em><span>John Steen receives research funding from a variety of sources including the Canadian Federal Government through the NSERC and Supercluster programs, MITACS, Teck, Rio Tinto, EY, Eriez, FL Smidth, and the Project Management Institute.</span></em></p><p class="fine-print"><em><span>Nadja Kunz receives funding from a variety of sources including government funding agencies (NSERC, SSHRC) and MITACS. Some of her research projects are co-sponsored by industry partners which currently include FLSmidth, Eriez, Resourceful Paths, Vale, Compass Minerals. Nadja also consults for the International Finance Corporation.</span></em></p>Simple economic modelling shows the mining industry would benefit from a carbon tax.Sally Innis, PhD Candidate in Mining Engineering, University of British ColumbiaBenjamin Cox, PhD student, mining engineering, University of British ColumbiaJohn Steen, EY Distinguished Scholar in Global Mining Futures, University of British ColumbiaNadja Kunz, Canada Research Chair and Assistant Professor, Mining, University of British ColumbiaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1688522021-10-03T19:00:22Z2021-10-03T19:00:22Z3 ways the collapse of Evergrande will hurt the Australian economy<figure><img src="https://images.theconversation.com/files/423976/original/file-20210930-20-4cxkwj.jpg?ixlib=rb-1.1.0&rect=0%2C180%2C3647%2C1845&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Miyuki Yoshioka/AP</span></span></figcaption></figure><p>Evergrande, China’s second-largest property developer, is in peril. After a decade of massive growth, including investing in “<a href="https://www.bloomberg.com/news/articles/2021-07-22/china-evergrande-is-said-to-explore-listing-of-tourism-business">Fairyland</a>” theme parks, an <a href="https://www.scmp.com/business/companies/article/3150633/evergrande-autos-ev-production-plans-hit-bump-debt-ridden">electric car company</a> and a professional football team (<a href="https://gzfc.evergrande.com/english/about.aspx">Guangzhou FC</a>), it is now struggling to service debts exceeding US$300 billion. </p>
<p>So far it has avoided the fate of dozens of its unfinished apartment towers — demolished in spectacular fashion in recent weeks — by selling off assets to make its payments. </p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/FTVxMyGBW48?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
</figure>
<p>But this is not a sustainable strategy. Credit rating agency Fitch has in the past week <a href="https://www.fitchratings.com/research/corporate-finance/fitch-downgrades-evergrande-subsidiaries-hengda-tianji-to-c-28-09-2021">downgraded Evergrande</a> to a “C”, indicating <a href="https://info.creditriskmonitor.com/Help/FitchGlossary.asp">exceptionally high risk</a>, with default “imminent or inevitable, or the issuer is in standstill”.</p>
<p>Without intervention by the Chinese government, the company will collapse. Here are three key ways in which that could affect Australia.</p>
<h2>1. Lower demand for iron ore</h2>
<p>Evergrande’s collapse will reverberate throughout China’s real estate market. Investors and lenders will be more cautious, potentially resulting in a credit crunch. This could severely dampen property development, and thereby demand for construction materials including steel, made using mostly imported iron ore. </p>
<p>China is by far the world’s biggest steel producer, and accounts for <a href="https://oec.world/en/profile/hs92/iron-ore">nearly 70%</a> of global iron ore imports. About 60% of that iron ore has been imported from Australia. </p>
<p>This trade has made iron ore Australia’s most valuable export commodity, worth an <a href="https://publications.industry.gov.au/publications/resourcesandenergyquarterlyjune2021/index.html">estimated AU$149 billion</a> in the 2020-2021 financial year. About <a href="https://publications.industry.gov.au/publications/resourcesandenergyquarterlyjune2021/documents/Resources-and-Energy-Quarterly-June-2021-Iron-Ore.pdf">75% went to China</a>. Any drop in Chinese demand will therefore affect the Australian economy.</p>
<p>China has already been seeking to <a href="https://www.9news.com.au/national/iron-ore-prices-why-is-it-falling-china-cuts-steel-output-carbon-emissions-explainer/b444b066-a740-43c3-9ef8-6ff9468bdcbe">cut back steel production</a>, a high-energy process, to reduce carbon emissions. The iron ore price has halved since July. </p>
<hr>
<p><strong>Plummeting demand for iron ore</strong> </p>
<figure class="align-center ">
<img alt="Iron ore spot price (US$ per tonne)" src="https://images.theconversation.com/files/424123/original/file-20211001-13-1t3ecdd.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/424123/original/file-20211001-13-1t3ecdd.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=330&fit=crop&dpr=1 600w, https://images.theconversation.com/files/424123/original/file-20211001-13-1t3ecdd.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=330&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/424123/original/file-20211001-13-1t3ecdd.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=330&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/424123/original/file-20211001-13-1t3ecdd.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=414&fit=crop&dpr=1 754w, https://images.theconversation.com/files/424123/original/file-20211001-13-1t3ecdd.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=414&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/424123/original/file-20211001-13-1t3ecdd.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=414&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Iron ore spot price (US$ per tonne)</span>
<span class="attribution"><a class="source" href="https://tradingeconomics.com/commodity/iron-ore">tradingeconomics.com/</a></span>
</figcaption>
</figure>
<hr>
<p>Further falls in demand and thus prices will affect the Australian businesses and <a href="https://www.minister.industry.gov.au/ministers/pitt/media-releases/pilbara-iron-ore-powering-australias-economy">45,600 jobs</a> employed directly by the industry, as well as the thousands of jobs sustained though their wages, and government revenues from mining-related royalties and taxes.</p>
<h2>2. Overall weakening of China’s economy</h2>
<p>Beyond the direct effects, problems in China’s real estate and financial sectors could ripple across China’s economy, hurting Chinese demand for other goods and services in which Australia is a major provider. </p>
<p>To put <a href="https://www.abs.gov.au/articles/australias-trade-goods-china-2020">trade with China</a> in context, Australia’s exports to China are about three times those of our second-most valuable market, Japan. Even with iron-ore exports removed from the equation, China is still our biggest export market.</p>
<p>The effect of China buying less from Australia has been a matter of considerable debate. Some have argued Australia can compensate by diversifying into other markets. But such things take time. Economists Rod Tyers and Yixiao Zhou, who have simulated the <a href="https://theconversation.com/an-all-out-trade-war-with-china-would-cost-australia-6-of-gdp-151070">effects</a> of Australia-China trade being shut down, have argued short-term effects could be severe.</p>
<h2>3. Global contagion</h2>
<p>Evergrande’s debt crisis has echoes of the case of Lehman Brothers, the US investment bank whose bankruptcy in 2008 played a big part in precipitating the Global Financial Crisis. </p>
<p>Although most of Evergrande’s debt is localised in China, in financial and real estate sectors there is always a risk of investors and banks in other markets getting spooked, leading to a credit crunch throughout global markets. </p>
<p>Australian share markets have already fallen off their highs over the past few weeks, certainly in part over concerns about China’s economy. The mining sector has experienced the real <a href="https://www.mining.com/mining-stocks-carnage-as-iron-ore-copper-prices-fall/">carnage</a>, but there are indicators of general unease in falls across all sectors. </p>
<h2>Will the Chinese government intervene?</h2>
<p>Without external help Evergrande has a very high likelihood of failure. All the signs are there. It is averting bankruptcy by servicing the interest payments on its massive debt by selling assets at unfavourable prices.</p>
<p>All eyes are now on the Chinese government as a potential saviour through some form of debt restructure or guarantees. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/vital-signs-evergrande-may-survive-but-for-its-executives-expect-a-fate-worse-than-debt-168930">Vital Signs: Evergrande may survive, but for its executives expect a fate worse than debt</a>
</strong>
</em>
</p>
<hr>
<p>So far it <a href="https://www.nytimes.com/2021/09/26/business/china-evergrande-crisis.html">has not committed itself</a>, and it has taken a <a href="https://www.reuters.com/article/us-china-property-policy-idUSKBN2761ES">strong stance against high debt</a> by developers. But it may consider Evergrande “too big to fail” — its collapse having potentially disastrous local and global implications. So some form of intervention to stabilise the situation seems more likely than not.</p>
<p>Australians, and the rest of the world, will need to wait to see exactly what hand the Chinese government will play.</p><img src="https://counter.theconversation.com/content/168852/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Robert Powell does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Evergrande has a very high likelihood of failing without intervention by the Chinese government.Robert Powell, Professor, Edith Cowan UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1635782021-07-14T04:20:41Z2021-07-14T04:20:41Z5 rocks any great Australian rock collection should have, and where to find them<figure><img src="https://images.theconversation.com/files/411135/original/file-20210714-25-17z85xl.jpg?ixlib=rb-1.1.0&rect=5%2C11%2C3928%2C2607&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Road tripping with a geologist is a little different. While you’re probably reading road signs and dodging roadkill, we’re reading road cuttings and deciphering the history of the area over the previous millions — or even billions — of years. </p>
<p>Geology has shaped the Australian landscape. In Victoria where I live, for example, the western plains are pockmarked by <a href="https://www.tandfonline.com/doi/full/10.1080/08120099.2013.806954">Australia’s youngest volcanoes</a>, while the east of the state has been <a href="https://www.annualreviews.org/doi/abs/10.1146/annurev.earth.28.1.47">pushed up</a> to form the mountains of the Great Dividing Range. </p>
<p>Along the southern margin of the state are fossilised braided rivers, relics of when <a href="https://www.tandfonline.com/doi/abs/10.1046/j.1440-0952.1999.00757.x">Australia drifted away from Antarctica</a>. Evidence of this event extends into Tasmania, where dolerite, <a href="https://core.ac.uk/download/pdf/156738663.pdf">a rock that signifies this rift</a>, looms in enormous columns over Hobart from Mount Wellington.</p>
<p>This probably won’t surprise anyone who knows me, but I have rocks peppered around my house that I’ve collected on my travels. Every time I look at them, I not only think about how the rocks were formed, I’m also reminded of the trip when I collected them.</p>
<p>With international and even state borders set to remain closed for a while longer, this is the perfect time to take a great Australian road trip, become a rock detective, and build up your rock collection while you’re at it. </p>
<p>To help you get started, I’ve listed five rocks any great Australian rock collection should have.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/411149/original/file-20210714-19-12ucjmr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Green, volcanic crater" src="https://images.theconversation.com/files/411149/original/file-20210714-19-12ucjmr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/411149/original/file-20210714-19-12ucjmr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=339&fit=crop&dpr=1 600w, https://images.theconversation.com/files/411149/original/file-20210714-19-12ucjmr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=339&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/411149/original/file-20210714-19-12ucjmr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=339&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/411149/original/file-20210714-19-12ucjmr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=426&fit=crop&dpr=1 754w, https://images.theconversation.com/files/411149/original/file-20210714-19-12ucjmr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=426&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/411149/original/file-20210714-19-12ucjmr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=426&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The crater of an erupted volcano near Mount Gambier in Victoria.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>1. Mantle xenoliths</h2>
<p><em>Western Victoria</em></p>
<p>The youngest rocks in Australia are those that erupted out of Australia’s <a href="https://www.biodiversitylibrary.org/page/41319502#page/12/mode/1up">youngest volcano</a> in Mount Gambier, South Australia, 4,000 to 8,000 years ago. That volcano is the culmination of an enormous field of volcanoes that span central and western Victoria.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/photos-from-the-field-the-stunning-crystals-revealing-deep-secrets-about-australian-volcanoes-161176">Photos from the field: the stunning crystals revealing deep secrets about Australian volcanoes</a>
</strong>
</em>
</p>
<hr>
<p>In western Victoria, the volcanoes were formed from magma that ascended from the Earth’s mantle — the layer between the Earth’s core and crust. While the magma was rising, it tore off chunks of the surrounding mantle rock and transported it to the surface. We can find these chunks of the mantle — or <a href="https://www.sciencedirect.com/science/article/pii/S0012821X97000587?via%3Dihub">mantle xenoliths</a> (xeno = foreign, lith = rock) — in cooled lava today in western Victoria. </p>
<p>At first, these rocks look like any other piece of black or brown basalt, but then you turn them over or crack them open and there’s <a href="https://theconversation.com/photos-from-the-field-the-stunning-crystals-revealing-deep-secrets-about-australian-volcanoes-161176">a blob of bright green rock</a> staring back at you. The mantle rock inside is comprised mainly of olivine, which is a green mineral, and some black/brown pyroxene.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/411142/original/file-20210714-25-1olsmws.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Green rock blob encased in black rock" src="https://images.theconversation.com/files/411142/original/file-20210714-25-1olsmws.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/411142/original/file-20210714-25-1olsmws.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=397&fit=crop&dpr=1 600w, https://images.theconversation.com/files/411142/original/file-20210714-25-1olsmws.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=397&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/411142/original/file-20210714-25-1olsmws.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=397&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/411142/original/file-20210714-25-1olsmws.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=499&fit=crop&dpr=1 754w, https://images.theconversation.com/files/411142/original/file-20210714-25-1olsmws.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=499&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/411142/original/file-20210714-25-1olsmws.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=499&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Green mantle xenolith (xeno = foreign, lith = rock) encased in cooled basaltic lava from Mount Shadwell, Victoria.</span>
<span class="attribution"><span class="source">Dr Melanie Finch</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>Mantle xenoliths are a great place to start your rock collection because not only will they be your very own piece of Earth’s mantle, but you can find them yourself through a bit of fossicking around some of the volcanoes in western Victoria.</p>
<h2>2. Meteorites</h2>
<p><em>The Nullarbor Desert, South Australia and Western Australia</em></p>
<p>The Nullarbor is a desert plain region which straddles the border of South Australia and Western Australia. </p>
<p>The dry environment is ideal for preserving meteorites that fall to Earth, and the light colour of the limestone country rock and lack of vegetation means the black and brown meteorites are easier to see.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/411144/original/file-20210714-21-i1bpv1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/411144/original/file-20210714-21-i1bpv1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/411144/original/file-20210714-21-i1bpv1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/411144/original/file-20210714-21-i1bpv1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/411144/original/file-20210714-21-i1bpv1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/411144/original/file-20210714-21-i1bpv1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/411144/original/file-20210714-21-i1bpv1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/411144/original/file-20210714-21-i1bpv1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">A black meteorite standing out against the white limestone of the Nullarbor Plain.</span>
<span class="attribution"><span class="source">Professor Andy Tomkins</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>Even if you don’t have a great eye for spotting meteorites hiding in plain sight, you can do as the geologists do and use a magnet on a stick to help you. Most meteorites are iron-rich, so wandering around with a magnet hovering over the surface is a good way to pick them up. </p>
<p>Thousands of meteorites have been found in the Nullarbor, <a href="https://onlinelibrary.wiley.com/doi/pdf/10.1111/j.1945-5100.2010.01289.x">some up to 40,000 years old</a>.</p>
<h2>3. Metamorphic rocks</h2>
<p><em>Broken Hill, New South Wales</em></p>
<p>You’ve probably heard of Broken Hill because of the large silver, lead and zinc mine there. But the geological conditions that created the ore deposit around <a href="https://pubs.geoscienceworld.org/gsa/geology/article/32/7/589/29483/Subseafloor-origin-for-Broken-Hill-Pb-Zn-Ag">1.7 billion years ago</a> also made some beautiful rocks.</p>
<p>A visit to Broken Hill’s <a href="https://www.brokenhill.nsw.gov.au/Facilities/Albert-Kersten-Mining-and-Minerals-Museum">Albert Kersten Mining and Minerals Museum</a> will demonstrate the vast array of unusual minerals found in the region, some of them described for the first time at this locality. </p>
<p>If you’re seeking your own chunk of Broken Hill’s geological history, Round Hill is the place for you. Just a short way out of the town centre, you’ll find beautiful red garnets surrounded by patches of white minerals (quartz and feldspar). </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/411143/original/file-20210714-23-22ws9z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A geologist holding a rock with various colours" src="https://images.theconversation.com/files/411143/original/file-20210714-23-22ws9z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/411143/original/file-20210714-23-22ws9z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=424&fit=crop&dpr=1 600w, https://images.theconversation.com/files/411143/original/file-20210714-23-22ws9z.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=424&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/411143/original/file-20210714-23-22ws9z.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=424&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/411143/original/file-20210714-23-22ws9z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=532&fit=crop&dpr=1 754w, https://images.theconversation.com/files/411143/original/file-20210714-23-22ws9z.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=532&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/411143/original/file-20210714-23-22ws9z.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=532&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">A large garnet from the Broken Hill region.</span>
<span class="attribution"><span class="source">Professor Andy Tomkins</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>These rocks started out as sand and mud, and <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1525-1314.2005.00608.x">record the history</a> of being buried and heated to over 700°C deep below the Earth’s surface. This process caused the rock to start melting and created the striking stripey, garnet-rich rocks we find there today.</p>
<h2>4. Banded iron formation</h2>
<p><em>Western Australia</em></p>
<p>Banded iron formation is a layered sedimentary rock mainly comprised of alternating bands of chert (a sedimentary rock made of quartz) that’s often red in colour and silver to black iron oxide. It is the main host of iron ore, and can be found in several regions in Western Australia.</p>
<p>The Hamersley Province in the northwestern part of Western Australia has the <a href="https://www.sciencedirect.com/science/article/pii/S0301926815003629">thickest and most extensive</a> banded iron formations in the world. They are about <a href="https://www.tandfonline.com/doi/abs/10.1111/j.1400-0952.2004.01082.x?casa_token=QbHbov_0we0AAAAA:brBYBRIolr2lzbYRHh1CxGZ8zJDTdP02YNjrkq-wXVUfzNj5SK5c9cmcWlmmvOi2WUYd4biGz6ao">2.45 to 2.78 billion years old</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/411141/original/file-20210714-23-1kx5iq1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Red and brown bands along a rock face" src="https://images.theconversation.com/files/411141/original/file-20210714-23-1kx5iq1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/411141/original/file-20210714-23-1kx5iq1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=398&fit=crop&dpr=1 600w, https://images.theconversation.com/files/411141/original/file-20210714-23-1kx5iq1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=398&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/411141/original/file-20210714-23-1kx5iq1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=398&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/411141/original/file-20210714-23-1kx5iq1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/411141/original/file-20210714-23-1kx5iq1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/411141/original/file-20210714-23-1kx5iq1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Banded iron formation at Forescue Falls, WA.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/graeme/12116315164/in/photolist-7CDYgj-2j6Va2M-2jdGHSf-oEf3Dz-2jdKu3P-2jdKu2m-2dN6GRq-2dN6GBh-oUHcDh-9q1zoW-oEg6Xp-oWKg3z-9q1Ajo-h9Ze7W-oWtFjP-oEfWy6-jsFhnA-mgHSqk-gTUFeN-oWuEdP-zAzaNc-7AevFd-7AazUx-7Ae6uE-7AedRo-7Ae3iw-7AadWP-7Aahr4-7Ae5Qh-7Aai96-7Ae2ps-7AaXwr-2jWei3g-2jW9Sxi-uRHgZW">Graeme Churchard/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>Geologists believe they <a href="https://onlinelibrary.wiley.com/doi/abs/10.1046/j.1365-3091.2003.00594.x">formed on a continental shelf</a>, where thick continental crust extends out into the ocean and then drops away to oceanic crust.</p>
<p>Banded iron formation is exciting because it no longer forms on Earth today, meaning it records an ancient process that we no longer see happening. </p>
<p>It is thought to have formed in ancient oceans, which were starting to increase in oxygen content at the time. It records the chemical input of these oceans, as well as sediments from the continent and volcanoes on the ocean floor.</p>
<h2>5. Dinosaur fossils</h2>
<p><em>Central and western Queensland</em></p>
<p>Oh to have been in Queensland 100 million years ago! Judging by the fossils found in parts of the state, it would have been a cornucopia of dinosaur activity.</p>
<p>From an unlikely duo of <a href="https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0006190">dinosaurs in a 98-million-year-old billabong</a> in Winton, to <a href="https://www.tandfonline.com/doi/abs/10.1080/02724634.2012.694591">fossilised evidence of a dinosaur herd</a> at Lark Quarry, Queensland is the place to go to peer back in time to the Mesozoic Era between 252 and 66 million years ago. </p>
<p>And if you’re really lucky, you might even have dinosaur bones on your property, like <a href="https://peerj.com/articles/11317/">the huge, long-necked sauropod</a> discovered just this year on a Queensland cattle farm.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/411146/original/file-20210714-27-uptilx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="An outback museum with a dinosaur statue in front" src="https://images.theconversation.com/files/411146/original/file-20210714-27-uptilx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/411146/original/file-20210714-27-uptilx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/411146/original/file-20210714-27-uptilx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/411146/original/file-20210714-27-uptilx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/411146/original/file-20210714-27-uptilx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/411146/original/file-20210714-27-uptilx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/411146/original/file-20210714-27-uptilx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The Australian Age of Dinosaurs Museum in Winton, Queensland, is home to the largest collection of Australian dinosaur fossils. (Note: not a real dinosaur.)</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<p>When building your Australian rock collection, remember to check first if <a href="https://theconversation.com/how-to-hunt-fossils-responsibly-5-tips-from-a-professional-palaeontologist-156861">fossicking is allowed in the area</a>. When you find an interesting rock, your state or territory geological survey might be able to help with identifying it. </p>
<p>Happy hunting!</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-to-hunt-fossils-responsibly-5-tips-from-a-professional-palaeontologist-156861">How to hunt fossils responsibly: 5 tips from a professional palaeontologist</a>
</strong>
</em>
</p>
<hr>
<img src="https://counter.theconversation.com/content/163578/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Emily Finch has previously received funding from an Australian Postgraduate Award and a Society of Economic Geologists Graduate Student Fellowship. </span></em></p>When borders reopen, take an Aussie road trip and explore the continent’s unique geology, from meteorites in the Nullarbor Plain to rock formations that are billions of years old.Emily Finch, Beamline Scientist at ANSTO, and Research Affiliate, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1559412021-02-24T19:07:18Z2021-02-24T19:07:18ZBeyond Juukan Gorge, the relentless threat mining poses to the Pilbara cultural landscape<p>Just as the <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Northern_Australia/CavesatJuukanGorge">parliamentary inquiry</a> into Rio Tinto’s destruction of the Juukan Gorge rock shelters was reconvening in Canberra, another culturally significant site was <a href="https://www.theguardian.com/business/2021/feb/23/aboriginal-rock-shelter-in-pilbara-damaged-after-bhp-promised-not-to-disturb-heritage-sites">damaged</a> at one of BHP’s iron ore mines in the Pilbara.</p>
<p>This latest rock shelter, a registered site for the Banjima peoples, was reportedly damaged by a rockfall in late January. BHP said the site was not part of its current mining operations and the cause of the rockfall was not known. </p>
<p>Both incidents make clear the invidious and relentless threat to Aboriginal cultural heritage in the Pilbara (and elsewhere in Australian mining regions). </p>
<p>The destruction of one ancient and sacred rock shelter is, of course, devastating. But there’s a greater and as yet unrecognised loss to cultural heritage that is occurring from the “cumulative impacts” of mining activities in the Pilbara. It’s destruction by a thousand cuts. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1364351865933103104"}"></div></p>
<h2>A heavily industrialised landscape</h2>
<p>It is difficult for most people to imagine the scale of the iron ore and gas operations in the region. Large swathes of this remote and ecologically delicate environment (a global <a href="http://museum.wa.gov.au/sites/default/files/WAM_Supp78(B)_HALSEetal%20pp443-483.pdf">biodiversity hotspot</a> for <a href="https://www.bing.com/search?q=wa+museum+subterranean+fauna+stygofauna&FORM=SSRE">subterranean fauna</a>) have been transformed over the last several decades into a heavily industrialised landscape.</p>
<p>There are more than 25 industrial-scale iron ore mines in the Pilbara. Of these, Rio Tinto owns 16. They are part of an <a href="https://www.riotinto.com/en/operations/australia/pilbara">integrated network</a> to transport iron ore out of the region, which includes four independent port terminals, a 1,700-kilometre rail network and other related infrastructure.</p>
<p><a href="https://cmewa.com.au/about/wa-resources/iron-ore/">Western Australia’s iron ore sales</a> have more than doubled over the past decade from 317 million tonnes in 2008-09 to 794 million tonnes in 2018-19. This was worth more than A$4.4 billion in royalties to the WA government in 2018. </p>
<h2>Ancestral paths are being ‘boxed up’</h2>
<p>As a submission to the parliamentary inquiry from the <a href="http://wintawariguruma.com.au/">Wintawari Guruma Aboriginal Corporation</a> stated, more than 93% of their Country is covered by mining tenements. There are seven mines in total, most owned by Rio Tinto. </p>
<p>This group is not unusual. The neighbouring Yinhawangka have four Rio Tinto mines on their Country, plus others owned by different companies, including FMG.</p>
<p>Under the current <a href="https://www.legislation.wa.gov.au/legislation/statutes.nsf/main_mrtitle_3_homepage.html">WA Aboriginal Heritage Act</a>, the focus of heritage protection efforts is on tangible (often archaeological) sites defined as discrete “way-points” on a map and separated from the cultural landscape that supports them. </p>
<p>But this is a core misunderstanding of cultural heritage management. <a href="https://australia.icomos.org/resources/australia-icomos-heritage-toolkit/intangible-cultural-heritage/">Intangible</a> or ethnographic sites, which are rarely visible to non-Indigenous people or those who are not customary knowledge holders, struggle to find recognition. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/friday-essay-masters-of-the-future-or-heirs-of-the-past-mining-history-and-indigenous-ownership-153879">Friday essay: masters of the future or heirs of the past? Mining, history and Indigenous ownership</a>
</strong>
</em>
</p>
<hr>
<p>These intangible sites are part of the interconnected spiritual journey known as “dreaming tracks” and “<a href="https://www.commonground.org.au/learn/songlines">song-lines</a>”. For the knowledge holders, these ancestral paths represent a fundamental truth of connection to Country.</p>
<p>However, as mining activity intensifies in the Pilbara, even if certain “sites” are protected, these ancestral paths are being “boxed up” and cut off from one another. </p>
<p>This is because the WA Aboriginal Heritage Act assesses applications and projects on an individual basis, without reference to the cumulative impacts of mining activities or the bigger picture of regional and national heritage. </p>
<h2>What are cumulative impacts?</h2>
<p>These cumulative impacts <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Northern_Australia/CavesatJuukanGorge/Submissions">include such things as</a> </p>
<p>1) loss of access to sacred sites, cultural places (including customary harvest grounds) and cultural materials </p>
<p>2) loss of cultural integrity of cultural places through destruction of Country in close proximity </p>
<p>3) loss through indirect effects, such as increased dust, vibration and noise</p>
<p>4) diminished amenities and visual integrity.</p>
<p>In 2015, BHP prepared <a href="https://www.bhp.com/-/media/bhp/regulatory-information-media/iron-ore/western-australia-iron-ore/0000/impact-assessment-report/160316_ironore_waio_pilbarastrategicassessment_commonwealth_appendix4_part1.pdf">a “cumulative impact assessment”</a> of its direct and indirect mining footprint in the Pilbara. The authors indicated it was the first of its kind for the region. </p>
<p>Though the focus was purely on the environmental effects of mining activities — not cultural effects — the results are nonetheless revealing. </p>
<p>The authors listed five species from the region, including the olive python and the northern quoll, that are now considered “vulnerable” or “endangered”. These species also have great significance for traditional owners. Yet, they were not engaged in the cumulative impact assessment process.</p>
<p>To the best of our knowledge, none of the major mining companies in the Pilbara have undertaken cumulative impact assessments for Indigenous cultural heritage that encompass the entirety of their operational footprint. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/can-a-mining-state-be-pro-heritage-vital-steps-to-avoid-another-juukan-gorge-146211">Can a mining state be pro-heritage? Vital steps to avoid another Juukan Gorge</a>
</strong>
</em>
</p>
<hr>
<h2>Land access protocols, locked gates and PPE</h2>
<p>The ability of traditional owners to access Country to care for it, maintain their obligations to it, monitor the effects of mining operations and ensure inter-generational knowledge transfer is another sensitive issue. </p>
<p>Many groups in the Pilbara have “land access protocols” with the companies operating on their land. A <a href="http://www.yinhawangka.com.au/wp-content/uploads/Land-Access-Protocol-Greater-Paraburdoo-2020.pdf">publicly available protocol</a> between the Yinhawangka and Rio Tinto gives insight into the strict visitation parameters for the company’s mining leases and tenements.</p>
<p>For instance, the “general conditions” require visitors to have vehicles fitted with a suitable UHF radio set to the sign-posted channels. </p>
<p>The requirements also include </p>
<blockquote>
<p>providing information of all the areas that you plan to visit within the … mining lease area, the number of people/vehicles in your group, the date and time that access is required and the duration of your trip. </p>
</blockquote>
<p>Each person entering a mining lease must also “meet the minimum PPE requirements”. </p>
<p>Though we recognise the need to manage for occupational health and safety, such intensive requirements would make access extremely difficult and unrealistic for many people, especially the elderly and children.</p>
<p>Land access protocols do not just apply to mining leases, but also to pastoral leases, which are owned by the companies to facilitate the development of mining operations and ensure land access. Rio Tinto owns six such leases in the Pilbara. </p>
<p>The visitation rights for these pastoral leases are similarly strict. The protocols for <a href="http://www.yinhawangka.com.au/wp-content/uploads/Land-Access-Protocol-Rocklea-Station-2020.pdf">Rocklea station</a>, for instance, allow native title holders to camp for no more than three nights.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/juukan-gorge-inquiry-puts-rio-tinto-on-notice-but-without-drastic-reforms-it-could-happen-again-151377">Juukan Gorge inquiry puts Rio Tinto on notice, but without drastic reforms, it could happen again</a>
</strong>
</em>
</p>
<hr>
<h2>The importance of conservation agreements</h2>
<p><a href="https://consultation.dplh.wa.gov.au/aboriginal-heritage/aboriginal-heritage-bill-2020/">WA’s draft new heritage laws</a> contain the phrase “cultural landscapes”, which is a step in the right direction. </p>
<p>However, to truly protect cultural heritage and accommodate Aboriginal rights and interests requires conservation agreements, similar to the <a href="https://theconversation.com/can-a-mining-state-be-pro-heritage-vital-steps-to-avoid-another-juukan-gorge-146211">Murujuga</a> agreements made between the Commonwealth and both Rio Tinto and Woodside in the Pilbara. </p>
<p>The state government would have to forgo some mining royalties and, in line with recommendations by the parliamentary inquiry, native title holders would have the right to protect sites and declare areas “no-go zones”. </p>
<p>This has been the successful model under the <a href="https://www.legislation.gov.au/Details/C2019C00117">Aboriginal Land Rights Act</a> in the NT for more than 40 years. Such a model <a href="https://www.academia.edu/4539641/Nourishing_Terrains_Australian_Aboriginal_views_of_Landscape_and_Wilderness_Australian_Heritage_Commission_Canberra_1996_">recognises</a> </p>
<blockquote>
<p>the interdependence of all life within Country constitutes a hard but essential lesson – those who destroy their Country ultimately destroy themselves.</p>
</blockquote>
<p>The risk is that if decisive and strong measures aren’t taken, large swathes of the Pilbara will become desecration zones, or “sterilisation” zones, as some Aboriginal groups have termed the industrial mining landscape. </p>
<p>This will be the legacy, not only for the mining companies, but for Australia and most painfully, for the traditional owners who remain long after the miners have gone.</p><img src="https://counter.theconversation.com/content/155941/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sarah Holcombe is a Senior Research Fellow at CSRM which conducts applied research with communities and Indigenous representative bodies, governments, mining companies and, currently, the Cooperative Research Centre for Transitions in Mining Economies (CRC TiME). </span></em></p><p class="fine-print"><em><span>Bronwyn Fredericks was the BHP Chair in Indigenous Engagement at CQUniversity from 2013-2018. </span></em></p>The destruction of one ancient rock shelter is devastating. But there’s a greater loss to cultural heritage that is occurring from the ‘cumulative impacts’ of mining operations in WA.Sarah Holcombe, Senior Research Fellow, The University of QueenslandBronwyn Fredericks, Pro Vice-Chancellor (Indigenous Engagement), The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1545582021-02-09T19:07:16Z2021-02-09T19:07:16ZIt might look like China is winning the trade war, but its import bans are a diplomacy fail<figure><img src="https://images.theconversation.com/files/383143/original/file-20210208-15-1crn84v.jpg?ixlib=rb-1.1.0&rect=44%2C0%2C5894%2C3250&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Alex Plavevski/EPA/AAP</span></span></figcaption></figure><p>As Australian producers scramble to find markets for goods <a href="https://www.theaustralian.com.au/nation/claws-and-effect-investors-burnt-on-lobsters/news-story/625f2f7a19f5f8bacc855a10853254f5">hit by Chinese import restrictions</a>, it might look as though China is winning the diplomatic war. </p>
<p>But the current situation is a diplomacy fail for China as much as for Australia.</p>
<h2>What products have been banned?</h2>
<p>In recent months, China has <a href="https://www.scmp.com/economy/china-economy/article/3108056/china-australia-relations-import-ban-australian-copper-sugar">imposed restrictions</a> on an array of Australian imports including <a href="https://www.abc.net.au/news/2020-12-10/chinas-trade-war-with-australia-export-industry/12967190">lobsters, beef and timber</a> as part of a deteriorating relationship summarised in a <a href="https://theconversation.com/australia-can-repair-its-relationship-with-china-here-are-3-ways-to-start-150455">list of grievances</a> against Australia.</p>
<figure class="align-center ">
<img alt="Cows grazing in a field." src="https://images.theconversation.com/files/383150/original/file-20210209-17-131yvhk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/383150/original/file-20210209-17-131yvhk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=377&fit=crop&dpr=1 600w, https://images.theconversation.com/files/383150/original/file-20210209-17-131yvhk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=377&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/383150/original/file-20210209-17-131yvhk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=377&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/383150/original/file-20210209-17-131yvhk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=474&fit=crop&dpr=1 754w, https://images.theconversation.com/files/383150/original/file-20210209-17-131yvhk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=474&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/383150/original/file-20210209-17-131yvhk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=474&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">China suspended imports from six Australian beef suppliers in 2020.</span>
<span class="attribution"><span class="source">Rick Rycroft/AAP</span></span>
</figcaption>
</figure>
<p>This has hurt some Australian products, such as <a href="https://www.abc.net.au/news/rural/2021-01-02/china-australia-trade-war-winemakers-look-for-new-markets-covid/13026228">wine</a> and <a href="https://www.graincentral.com/markets/we-won-saudi-arabia-with-barley-but-who-is-winning-china/">barley</a>, which have struggled to find equally lucrative markets. However, some others such as <a href="https://www.hellenicshippingnews.com/australia-wheat-exports-poised-to-deliver-6b-windfall/">wheat</a> have found new buyers relatively easily. </p>
<p>Overall, Australia’s total exports to China <a href="https://www.abc.net.au/news/2021-01-26/australian-economy-coping-well-after-chinese-trade-restrictions/13090436">actually increased</a> in December, mainly thanks to <a href="https://theconversation.com/dan-tehans-daunting-new-role-restoring-trade-with-china-in-a-hostile-political-environment-153446">iron ore</a>, which China needs too much to restrict.</p>
<h2>Restrictions cut both ways</h2>
<p>But while these import restrictions hurt Australia, they hurt China too.</p>
<p>In the short term, Chinese consumers miss out on products they enjoyed, such as premium Australian <a href="https://www.abc.net.au/news/rural/2021-01-02/china-australia-trade-war-winemakers-look-for-new-markets-covid/13026228">wine</a> and <a href="https://sg.news.yahoo.com/china-australia-relations-import-ban-120750821.html">lobsters</a>, which are valued for celebrations. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/australia-can-repair-its-relationship-with-china-here-are-3-ways-to-start-150455">Australia can repair its relationship with China, here are 3 ways to start</a>
</strong>
</em>
</p>
<hr>
<p>Chinese manufacturers that used Australian goods might have to pay more or accept lower quality, such as for barley used for brewing, which hurts <a href="https://www.internationalaffairs.org.au/australianoutlook/holding-a-wolf-by-the-ears-the-conflict-between-chinese-trade-restrictions-and-domestic-demand/">their productivity and economic growth</a>. </p>
<p>In some sectors, there may not be enough <a href="https://www.scmp.com/economy/china-economy/article/3117908/chinas-ban-australian-coal-drives-diversification-can-it-fill">immediate replacements</a> for Australian products. </p>
<p>For example, coal shortages have led to China’s <a href="https://www.scmp.com/economy/china-economy/article/3115119/china-suffers-worst-power-blackouts-decade-post-coronavirus">worst power blackouts</a> for a decade. While import restrictions are <a href="https://www.scmp.com/economy/china-economy/article/3116395/chinas-coal-price-indices-stop-revealing-surging-prices">not the only factor</a> – and the Chinese government has <a href="https://theconversation.com/forget-about-the-trade-spat-coal-is-passe-in-much-of-china-and-thats-a-bigger-problem-for-australia-153300">denied any link</a> – widespread blackouts at the same time as more than 70 coal ships <a href="https://www.theguardian.com/australia-news/2021/jan/14/labor-fears-humanitarian-crisis-on-australian-coal-ships-stranded-off-china">are stuck offshore</a> show how restrictions cut both ways.</p>
<h2>Wider impact</h2>
<p>In the medium term, other countries watch the treatment of Australia and consider how to <a href="https://dailybrief.oxan.com/Analysis/DB258220/Australia-demonstrates-the-limits-of-Chinese-coercion">protect themselves</a>, so as not to suffer the same fate. </p>
<p>When China restricted sales of rare earth minerals to Japan in 2010, this led Japan to invest in other countries, resulting in a significant <a href="https://chinapower.csis.org/china-rare-earths/#:%7E:text=From%202008%20to%202018%2C%20the,its%20rare%20earths%20from%20China.">reduction in China’s market share</a>. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/australia-has-a-great-chance-to-engage-in-trade-diplomacy-with-china-and-it-must-take-it-154737">Australia has a great chance to engage in trade diplomacy with China, and it must take it</a>
</strong>
</em>
</p>
<hr>
<p>While I don’t think countries will <a href="https://foreignpolicy.com/2021/01/27/anti-china-alliance-quad-australia-india-japan-u-s/">band together</a> to resist Chinese coercion – they are more likely to help their companies <a href="https://www.reuters.com/article/us-mining-teck-resources-idUSKBN28B5S3">capture Australia’s market share</a> – they may try to slow the growth of economic ties with China, such as through restricting investment in some sectors. </p>
<p>This means Chinese investors may find overseas markets less friendly, as has happened in Australia with much of the economy now <a href="https://johnmenadue.com/hamish-mcdonald-media-in-the-asian-century-8/">unavailable</a>.</p>
<h2>Unfavourable views of China</h2>
<p>In the long term, economic coercion has an impact on China’s international reputation. </p>
<p>China starts to be seen as a less reliable trade partner, and trade starts to be seen not as mutual benefit, but as a <a href="https://www.internationalaffairs.org.au/australianoutlook/holding-a-wolf-by-the-ears-the-conflict-between-chinese-trade-restrictions-and-domestic-demand/">potential vulnerability</a> that China can weaponise. </p>
<figure class="align-center ">
<img alt="A port with shipping containers in China's Liaoning province" src="https://images.theconversation.com/files/383162/original/file-20210209-13-17agc23.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/383162/original/file-20210209-13-17agc23.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/383162/original/file-20210209-13-17agc23.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/383162/original/file-20210209-13-17agc23.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/383162/original/file-20210209-13-17agc23.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/383162/original/file-20210209-13-17agc23.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/383162/original/file-20210209-13-17agc23.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">In the short term, Chinese consumers and manufacturers are missing out on Australian products.</span>
<span class="attribution"><span class="source">Olivia Zhang/AP/AAP</span></span>
</figcaption>
</figure>
<p>Australia is party to two trade agreements with China: the <a href="https://www.dfat.gov.au/trade/agreements/in-force/chafta/Pages/australia-china-fta">China-Australia Free Trade Agreement</a> and the <a href="https://www.dfat.gov.au/trade/agreements/not-yet-in-force/rcep">Regional Comprehensive Economic Partnership</a>. If these do not protect Australia from trade coercion, the message is that such agreements mean little.</p>
<p>Chinese citizens seem to be blissfully unaware of the damage to their country’s reputation. Recent public opinion polling found 78% believe <a href="https://www.globaltimes.cn/content/1211038.shtml">China’s international image has improved</a> in recent years. This is dead wrong. </p>
<p>Comprehensive polling by Pew Research shows China’s international reputation in advanced economies <a href="https://www.pewresearch.org/global/2020/10/06/unfavorable-views-of-china-reach-historic-highs-in-many-countries/">has plummeted</a> over the past decade. China’s assertive diplomacy has been <a href="https://www.lowyinstitute.org/the-interpreter/beijing-s-wolf-warriors-score-own-goals">spectacularly unsuccessful</a> as a way of winning hearts and minds.</p>
<h2>‘Kill the chicken to warn the monkey’</h2>
<p>Chinese thinkers who argue China should show <a href="https://www.thechinastory.org/why-xi-jinping-isnt-listening-to-chinas-foreign-policy-moderates/">patience and restraint</a> in its foreign policy are not winning the argument in Beijing. National pride and strength is <a href="https://www.internationalaffairs.org.au/australianoutlook/holding-a-wolf-by-the-ears-the-conflict-between-chinese-trade-restrictions-and-domestic-demand/">seen as more important</a> than the costs.</p>
<p>Looking forward, China is <a href="https://www.uwa.edu.au/news/article/2020/december/china-australia-relations-doomed">likely to continue</a> to mete out punishment to Australia for the <a href="https://www.afr.com/policy/economy/china-is-fighting-for-the-minds-of-asia-not-australia-20201201-p56jo9">demonstration effect</a> to other countries. The Chinese have a <a href="https://www.thechinastory.org/china-neican-27-january-2021/">saying</a> “kill the chicken to warn the monkey”. </p>
<p>But no one should be under any illusion this situation is a good result for China. </p>
<p>It would have been much better for China to have a model relationship with Australia. Australia and China have no historical conflicts, no border disputes and Australia is the one with the <a href="https://www.afr.com/politics/federal/exports-to-china-drive-9b-trade-surplus-20210125-p56wol#:%7E:text=Despite%20ongoing%20tensions%20between%20Australia,by%20iron%20ore%20and%20wheat.">trade surplus</a>. If China can’t get along with Australia, who can it get along with?</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/dan-tehans-daunting-new-role-restoring-trade-with-china-in-a-hostile-political-environment-153446">Dan Tehan's daunting new role: restoring trade with China in a hostile political environment</a>
</strong>
</em>
</p>
<hr>
<p>Like any downward spiral, <a href="https://theconversation.com/australia-can-repair-its-relationship-with-china-here-are-3-ways-to-start-150455">both sides have contributed</a>. Worryingly for China, issues that have contributed to the deteriorating relationship — such as <a href="https://johnmenadue.com/australia-china-relations-a-downward-spiral-that-can-be-reversed/">cyber attacks, espionage and political interference</a> — are also concerns for other countries.</p>
<p>The unravelling of the relationship in just five years is a terrible result for Chinese diplomacy. </p>
<p>This week, China will celebrate the New Year. China has controlled COVID-19 and emerged with an economy <a href="https://www.aspistrategist.org.au/chinas-strong-economic-growth-forecast-signals-further-trade-tensions-in-2021/">stronger</a> than it was a year ago. China’s <a href="http://www.xinhuanet.com/english/2021-01/25/c_139696610.htm">rhetoric</a> advocates peaceful coexistence, mutual benefit and win-win cooperation. But when it comes to diplomacy, there is room for improvement.</p>
<p>In the words of ancient Chinese scholar Mencius, there are <a href="https://www.internationalaffairs.org.au/australianoutlook/g20-what-kind-of-great-power-is-china/">two ways of being a great power</a>: a “big power” that aggressively pursues its interests through force and coercion, or a “great state” that attracts and gains respect by its virtuous character and consideration of others’ interests. </p>
<p>China’s own self-interest is in the latter.</p><img src="https://counter.theconversation.com/content/154558/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Melissa Conley Tyler does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>China’s import restrictions hurt Australia, but they also hurt China. In more ways than one.Melissa Conley Tyler, Research Fellow, Asia Institute, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1529662021-01-11T19:08:51Z2021-01-11T19:08:51ZWhat Clive Palmer must now ask himself: would China’s ‘bastards’ buy a mine from him?<p>Colourful mining magnate Clive Palmer’s political ambitions appear to be in tatters. But what of his multibillion-dollar legal ambitions?</p>
<p>On Sunday he announced his United Australia Party will not contest Western Australia’s state election in March – a logical decision given his party attracted just <a href="https://www.abc.net.au/news/elections/qld/2020/results/party-totals">0.6% of the vote</a> in the November election in his home state of Queensland. </p>
<p>But he has not withdrawn his defamation case in the Federal Court of Australia against Western Australian premier Mark McGowan, over statements including comments about Palmer’s claim for up to A$30 billion in damages from the WA government over a stalled iron ore project.</p>
<p>The damages claim has to do with the WA government imposing conditions in 2012 on a proposal by Palmer’s company Minerology Pty Ltd to develop the <a href="https://www.epa.wa.gov.au/proposals/balmoral-south-iron-ore-project-cape-preston-wa">Balmoral South Iron Ore mine</a> in the Pilbara. Those conditions, Palmer’s lawyers have argued, meant Minerology was unable to develop the mine, and thus suffered financial loss due to then being unable to sell the project to Chinese interests.</p>
<p>In arbitration proceedings Palmer’s lawyers have won several points in their bid to have these conditions declared invalid. The WA government was sufficiently worried about its exposure to hastily pass, in August 2020, unprecedented “<a href="https://www.parliament.wa.gov.au/Parliament/Bills.nsf/BillProgressPopup?openForm&ParentUNID=2F1CFD31ACD372EE482585C100337061">emergency legislation</a>” to prevent Palmer pursuing damages. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-wa-government-legislated-itself-a-win-in-its-dispute-with-clive-palmer-and-put-itself-above-the-law-144360">The WA government legislated itself a win in its dispute with Clive Palmer — and put itself above the law</a>
</strong>
</em>
</p>
<hr>
<p>Palmer has since applied to Australia’s High Court to have the WA legislation declared invalid. </p>
<p>But whether the High Court action goes ahead is not the bottom-line question. Even if it does hear his case, and declares the WA legislation invalid, it’s still far from certain Minerology could then go on to win damages.</p>
<h2>The ‘first tier’ hurdle: who would buy from him</h2>
<p>The legal precedent governing Palmer’s claim for damages are contained in a 1994 High Court decision in <a href="http://www8.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/HCA/1994/4.html"><em>Sellars v Adelaide Petroleum</em></a>. This involved an appeal by Mark Sellars, a director of mining company Poseidon Ltd, and Poseidon itself, against a Federal Court decision that awarded damages to minerals exploration company Adelaide Petroleum due to losses suffered as a result of misleading statements by Poseidon and Sellars.</p>
<p>The High Court ruled against Sellars and Poseidon. The significant point in the decision was the principle the judges explained in making their ruling. A court must, with the advantage of hindsight, look at everything that took place and ask if it was more likely than not (in other words, if there was a 51% chance or more) that, even if wrongdoing occurred, it led to a lost commercial opportunity. </p>
<p>This is the “first tier” to be overcome to recover damages.</p>
<p>Applying the <em>Sellars v Adelaide Petroleum</em> principle to Palmer’s claim, the issue becomes whether, because of the WA governent’s conditions, Minerology more likely than not lost the opportunity to sell the mine to Chinese interests. More pointedly, was it more likely than not Chinese interests would have bought the mine from Palmer?</p>
<h2>Sour dealings with Chinese partners</h2>
<p>With the benefit of “hindsight”, any court would need to consider Palmer’s history with Chinese business partners.</p>
<p>One of those is his long and bitter legal feud with CITIC Pacific Mining, the powerful state-owned enterprise that operates the <a href="https://citicpacificmining.com/our-operation">Sino Iron project</a>, Australia’s largest magnetite iron ore mine, on Minerology-controlled tenements. </p>
<p>In 2014, Palmer accused CITIC of dudding him on royalty payments. CITIC, in turn, accused Palmer <a href="https://www.theaustralian.com.au/business/business-spectator/news-story/clive-palmers-dangerous-chinese-misstep/223a955b7b00d8b26756e0262f9d70f8">of siphoning off funds</a> to pay for his election campaigns. (Palmer won the Queensland seat of Fairfax at the 2013 federal election, and two UAP candidates, Glenn Lazarus and Jacqui Lambie, won Senate seats.) </p>
<p>China’s leading business publication, <a href="https://www.caixinglobal.com/">Caixin</a>, quoted an unnamed CITIC executive as saying Palmer’s attempt “to swindle money from us” would “have grave consequences for foreign investors and in particular Chinese investors”. </p>
<p>The dispute led to several cases in WA’s Supreme Court. A 2017 ruling awarded Minerology A$200 million in back payments, as well as ongoing royalties then worth about A$400 million a year. (CITIC’s appeal <a href="https://thewest.com.au/business/mining/1m-pay-days-continue-for-clive-palmers-mineralogy-after-citic-fails-in-appeals-bid-against-sino-iron-royalty-payments-ng-b881206150z?utm_campaign=share-icons&utm_source=email&utm_medium=email&tid=1558505403040">was rejected in 2019</a>). But in 2020 the court threw out Minerology’s case for about A$300 million more from CITIC as an “<a href="https://www.afr.com/companies/mining/palmer-loses-us200m-court-case-wins-on-us400m-a-year-in-royalties-20200214-p540ux">abuse of process</a>”. </p>
<p>But just as damaging to Palmer’s dealings with the Chinese were his statements on national television in August 2014, in which he said the Chinese government wanted to “take over our ports and get our resources for free”, and <a href="https://www.abc.net.au/news/2014-08-19/government-extending-olive-branch-to-china-after-palmer-tirade/5681118?nw=0">called Chinese officials</a> “bastards” and “mongrels”.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/SUdeFXmtMIs?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Clive Palmer calls the Chinese government bastards on ABC’s Q&A program.</span></figcaption>
</figure>
<p>So even if the High Court clears the way for Minerology to pursue its damages claim against the Western Australian government, there’s an argument to be made that Chinese interests would have been more likely than not to decline to do business with Palmer.</p>
<p>If so, Palmer would recover no damages.</p>
<h2>The ‘second tier’ hurdle: quantifying the loss</h2>
<p>There is also a second-tier hurdle to overcome if a court decides, for all the bad blood, that Chinese interests would have let bygones be bygones and be prepared to deal with Palmer.</p>
<p>In assessing the plaintiff’s actual loss, the court will need to consider every contingency that might affect that loss. It was held in <em>Sellars v Adelaide Petroleum</em> that to calculate the actual damage, what is called the “degree of possibilities” approach must be applied. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-clive-palmer-could-challenge-the-act-designed-to-stop-him-getting-30-billion-145098">How Clive Palmer could challenge the act designed to stop him getting $30 billion</a>
</strong>
</em>
</p>
<hr>
<p>This approach means the court must look at the price of iron ore at the time the mine would have been ready for sale, what a potential buyer would be prepared to pay for the mine, and thus what loss has been incurred. This cannot be a precise exercise; the court just does its best.</p>
<p>But it’s the first hurdle that Palmer needs to get over first.</p>
<p>So even if he chances his arm in the High Court, and wins, he and his lawyers still have a legal mountain to climb. Establishing his actual entitlement to damages is likely to prove troublesome.</p><img src="https://counter.theconversation.com/content/152966/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Kenneth Yin does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>If Clive Palmer pursues his claim against the Western Australian government in the High Court, and wins, he’s still got a big legal hurdle to overcome.Kenneth Yin, Lecturer in law, Edith Cowan UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1510702020-11-30T07:17:31Z2020-11-30T07:17:31ZAn all-out trade war with China would cost Australia 6% of GDP<figure><img src="https://images.theconversation.com/files/371929/original/file-20201130-23-1u0q2w.jpg?ixlib=rb-1.1.0&rect=122%2C268%2C3340%2C1422&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Iron ore mining, Pilbara Western Australia.
</span> <span class="attribution"><span class="source">STRINGER Image/Shutterstock</span></span></figcaption></figure><p>China accounts for <a href="https://www.abs.gov.au/statistics/economy/international-trade/international-merchandise-trade-preliminary-australia/latest-release">more than a third</a> of export dollars earned by Australia.</p>
<p>The figures, for the 12 months to October, cover the period of coronavirus disruptions and disputes over trade. </p>
<p>They apply to physical exports rather than harder to measure services, and are dominated by record high Chinese takings of Australian iron ore.</p>
<p>But they mightn’t last.</p>
<p>China is changing, transitioning from growth driven by the iron-ore hungry expansion of cities and manufacturing to growth driven more by the supply of services.</p>
<p>Externally, its “belt and road” infrastructure investments facilitate the supply of resources from locations other than Australia, among them the <a href="https://www.nsenergybusiness.com/projects/simandou-iron-ore-deposit/">Simandou</a> iron ore and bauxite deposits in Guinea, West Africa that will eventually offer higher quality ore than Australia from a region China may regard as more friendly.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/australia-demands-apology-from-china-over-repugnant-slur-on-twitter-151099">Australia demands apology from China over 'repugnant' slur on Twitter</a>
</strong>
</em>
</p>
<hr>
<p>Even if this source is slow to emerge, China will seek to diversify its supplies of iron ore by other means, as suggested by Australia’s former ambassador Geoff Raby in his recent book <a href="https://www.mup.com.au/books/chinas-grand-strategy-and-australias-future-in-the-new-global-order-paperback-softback">China’s Grand Strategy and Australia’s Future in the New Global Order</a>.</p>
<p>One will be to ensure a steady supply from Brazil which, with China, is a member of the <a href="http://infobrics.org/">BRICS</a> group of major emerging national economies.</p>
<p>Australia produces few manufactured goods and pays for the considerable quantity it imports by exporting commodities, mostly to China. </p>
<p>The loss of this export channel would be serious, but how serious? </p>
<h2>Iron ore matters more than we think</h2>
<p>Conversation authors <a href="https://theconversation.com/relax-losing-access-to-china-wont-make-us-the-poor-white-trash-of-asia-145442">John Quiggin</a> and <a href="https://theconversation.com/theres-no-need-for-panic-over-chinas-trade-threats-149828">James Laurenceson</a> argue the effects would be small. They point out that mineral exports account for only 1% of Australia’s national income and that China would hurt itself if it cut off the flow.</p>
<p>But China’s size means the damage to China would be proportionately smaller than the damage to Australia. </p>
<p>And while the mining sector is not the largest in Australia’s economy, its growth since 2002 has brought with it a secondary boom in Australian service industries. Australia’s East Coast cities have prospered even while most of the mining has been occurring in the Pilbara. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/relax-losing-access-to-china-wont-make-us-the-poor-white-trash-of-asia-145442">Relax, losing access to China won't make us the 'poor white trash of Asia'</a>
</strong>
</em>
</p>
<hr>
<p>The mining boom brought a substantial boost to our terms of trade (the earning power of our exports relative to the cost of our imports), pushing up the Australian dollar and making imported goods much cheaper. </p>
<p>A reversal would see our terms of trade fall and our cost of living rise.</p>
<p>Some commentators place store in our ability to redirect exports of wine and barley, and whatever else is affected by trade disputes, to other customers. </p>
<p>At least for iron ore, however, there are few other customers at current volumes. This suggests a decline in export prices and in Australia’s terms of trade.</p>
<h2>Damage to us, a mozzie bite for China</h2>
<p>So its worthwhile attempting to quantify the damage from a winding back by China of its imports from Australia.</p>
<p>We have conducted simulations of the effect of shutting down Australia-China trade by 95% in which we allow time for capital flows and production and employment to readjust and assume that monetary policy and fiscal balances remain unaltered throughout the world.</p>
<p>We find the shock to the demand for Australian products is large and it is only partially offset by the redirection of our exports, even with a large depreciation of the Australian dollar. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/hopes-of-an-improvement-in-australia-china-relations-dashed-as-beijing-ups-the-ante-147989">Hopes of an improvement in Australia-China relations dashed as Beijing ups the ante</a>
</strong>
</em>
</p>
<hr>
<p>The reason for this is that the loss of Chinese exports reduces the rate of return on investment in Australia, forcing financial markets to reallocate finance to other parts of the world.</p>
<p>The effects on Australian gross domestic product and real disposable income per capita are big (6% and 14 %), while those on China are mosquito bites by comparison (0.5% and 2.4%). </p>
<h2>It’s wise to be prepared</h2>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/371935/original/file-20201130-21-jhxwqs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/371935/original/file-20201130-21-jhxwqs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/371935/original/file-20201130-21-jhxwqs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=971&fit=crop&dpr=1 600w, https://images.theconversation.com/files/371935/original/file-20201130-21-jhxwqs.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=971&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/371935/original/file-20201130-21-jhxwqs.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=971&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/371935/original/file-20201130-21-jhxwqs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1220&fit=crop&dpr=1 754w, https://images.theconversation.com/files/371935/original/file-20201130-21-jhxwqs.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1220&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/371935/original/file-20201130-21-jhxwqs.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1220&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">SunCable is planning the world’s biggest solar array in the Northern Territory.</span>
<span class="attribution"><span class="source">Apiromsene/Shutterstock</span></span>
</figcaption>
</figure>
<p>Important things we can do to hedge against such an occurrence include maintaining strong relations with current and potential export destinations and fostering innovations that will allow our export product mix to adjust so as to better service the markets that remain open. </p>
<p>Examples include the proposal by <a href="https://theconversation.com/australia-could-fall-apart-under-climate-change-but-theres-a-way-to-avoid-it-126341">Ross Garnaut</a> to turn Australia into an exporter of green energy and associated plans by <a href="https://www.afr.com/companies/mining/forrest-unveils-staggering-vision-for-fortescue-in-renewables-20201110-p56d3h">Fortescue</a> and <a href="https://www.suncable.sg/">others</a> to raise exports of energy by more than the east coast of Australia currently consumes.</p>
<p>Without such innovations a substantial decline in trade with China would cut investment in Australia and cut living standards.</p>
<p>It is, of course, entirely possible that the worst won’t happen, but we don’t think that’s something Australians can bank on. </p>
<p>If our ship does begin to sink, capital and skills will jump off and what we are left with won’t be enough to support us in the manner we have come to expect.</p><img src="https://counter.theconversation.com/content/151070/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The damage would extend well beyond iron ore.Rod Tyers, Winthrop Professor of Economics, The University of Western AustraliaYixiao Zhou, Senior Lecturer in Economics, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1472682020-10-08T04:48:36Z2020-10-08T04:48:36ZChina just stunned the world with its step-up on climate action – and the implications for Australia may be huge<figure><img src="https://images.theconversation.com/files/362346/original/file-20201008-24-ynhm4p.jpg?ixlib=rb-1.1.0&rect=12%2C0%2C4088%2C2735&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Lukas Coch/AAP</span></span></figcaption></figure><p>China’s President Xi Jinping surprised the global community recently by committing his country to net-zero emissions by 2060. Prior to <a href="https://news.cgtn.com/news/2020-09-23/Full-text-Xi-Jinping-s-speech-at-General-Debate-of-UNGA-U07X2dn8Ag/index.html">this announcement</a>, the prospect of becoming “carbon neutral” barely rated a mention in China’s national policies. </p>
<p>China currently accounts for about <a href="https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2020-co2-emissions.pdf">28% of global carbon emissions</a> – double the US contribution and three times the European Union’s. Meeting the pledge will demand a deep transition of not just China’s energy system, but its entire economy. </p>
<p>Importantly, China’s use of coal, oil and gas must be slashed, and its industrial production stripped of emissions. This will affect demand for Australia’s exports in coming decades.</p>
<p>It remains to be seen whether China’s climate promise is genuine, or simply a ploy to win international favour. But it puts pressure on many other nations – not least Australia – to follow.</p>
<figure class="align-center ">
<img alt="A man walking against an industrial skyline" src="https://images.theconversation.com/files/362341/original/file-20201008-24-1ibkk3m.jpg?ixlib=rb-1.1.0&rect=4%2C13%2C2991%2C1971&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/362341/original/file-20201008-24-1ibkk3m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/362341/original/file-20201008-24-1ibkk3m.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/362341/original/file-20201008-24-1ibkk3m.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/362341/original/file-20201008-24-1ibkk3m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/362341/original/file-20201008-24-1ibkk3m.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/362341/original/file-20201008-24-1ibkk3m.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">It remains to be seen whether China will deliver on its climate pledge.</span>
<span class="attribution"><span class="source">Da qing/AP</span></span>
</figcaption>
</figure>
<h2>Goodbye, fossil fuels</h2>
<p>Coal is currently used to generate <a href="https://ieefa.org/coals-share-of-china-electricity-generation-dropped-below-60-in-2018/">about 60%</a> of China’s electricity. Coal must be phased out for China to meet its climate target, unless technologies such as carbon-capture and storage become commercially viable.</p>
<p>Natural gas is <a href="https://chineseclimatepolicy.energypolicy.columbia.edu/en/natural-gas">increasingly used</a> in China for heating and transport, as an alternative to coal and petrol. To achieve carbon neutrality, China must dramatically reduce its gas use. </p>
<p>Electric vehicles and hydrogen fuel-cell vehicles must also come to dominate road transport - currently they account for <a href="http://www.xinhuanet.com/fortune/2020-01/08/c_1125433202.htm">less than 2%</a> of the total fleet.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/new-research-nitrous-oxide-emissions-300-times-more-powerful-than-co-are-jeopardising-earths-future-147208">New research: nitrous oxide emissions 300 times more powerful than CO₂ are jeopardising Earth's future</a>
</strong>
</em>
</p>
<hr>
<p>China must also slash the production of carbon-intensive steel, cement and chemicals, unless they can be powered by renewable electricity or zero-emissions hydrogen. One <a href="https://www.energy-transitions.org/publications/china-2050-a-fully-developed-rich-zero-carbon-economy/">report</a> suggests meeting the target will mean most of China’s steel is produced using recycled steel, in a process powered by renewable electricity.</p>
<p><a href="https://www.energy-transitions.org/publications/china-2050-a-fully-developed-rich-zero-carbon-economy/">Modelling</a> in that report suggests China’s use of iron ore – and the coking coal required to process it into steel – will decrease by 75%. The implications for Australia’s mining industry would be huge; around <a href="https://minerals.org.au/minerals/ironore">80%</a> of our iron ore is exported to China. </p>
<p>It is critically important for Australian industries and policymakers to assess the seriousness of China’s pledge and the likelihood it will be delivered. Investment plans for large mining projects should then be reconsidered accordingly. </p>
<p>Conversely, China’s path towards a carbon neutral economy may open up new export opportunities for Australia, such as “green” hydrogen. </p>
<figure class="align-center ">
<img alt="A bust road in China" src="https://images.theconversation.com/files/362342/original/file-20201008-18-pxn6wu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/362342/original/file-20201008-18-pxn6wu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/362342/original/file-20201008-18-pxn6wu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/362342/original/file-20201008-18-pxn6wu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/362342/original/file-20201008-18-pxn6wu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/362342/original/file-20201008-18-pxn6wu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/362342/original/file-20201008-18-pxn6wu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">To meet its pledge, China must decarbonise its transport system.</span>
<span class="attribution"><span class="source">DIEGO AZUBEL/EPA</span></span>
</figcaption>
</figure>
<h2>A renewables revolution</h2>
<p>Solar and wind currently account for <a href="https://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy.html">10% of China’s total power generation</a>. For China to meet the net-zero goal, renewable energy generation would have to ramp up dramatically. This is needed for two reasons: to replace the lost coal-fired power capacity, and to provide the larger electricity needs of transport and heavy industry.</p>
<p>Two factors are likely to reduce energy demand in China in coming years. First, energy efficiency in the building, transport and manufacturing sectors is likely to improve. Second, the economy is moving <a href="https://apjjf.org/2018/10/Tan.html">away</a> from energy- and pollution-intensive production, towards an economy based on services and digital technologies.</p>
<p>It’s in China’s interests to take greater action on climate change. Developing renewable energy helps China build new “green” export industries, secure its energy supplies and improve air and water quality. </p>
<figure class="align-center ">
<img alt="A solar array in China" src="https://images.theconversation.com/files/362345/original/file-20201008-22-yy2fxt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/362345/original/file-20201008-22-yy2fxt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/362345/original/file-20201008-22-yy2fxt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/362345/original/file-20201008-22-yy2fxt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/362345/original/file-20201008-22-yy2fxt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/362345/original/file-20201008-22-yy2fxt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/362345/original/file-20201008-22-yy2fxt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A transition to renewable energy would improve air pollution in China.</span>
<span class="attribution"><span class="source">Sam McNeil/AP</span></span>
</figcaption>
</figure>
<h2>The global picture</h2>
<p>It’s worth considering what factors may have motivated China’s announcement, beyond the desire to do good for the climate.</p>
<p>In recent years, China has been viewed with increasing hostility on the world stage, especially by Western nations. Some <a href="https://www.japantimes.co.jp/news/2020/09/23/asia-pacific/china-carbon-neutral-2060/">commentators</a> have suggested China’s climate pledge is a bid to improve its global image. </p>
<p>The pledge also gives China the high ground over a major antagonist, the US, which under President Donald Trump has walked away from its international obligations on climate action. China’s pledge follows similar ones by the European Union, New Zealand, California and others. It sets an example for other developing nations to follow, and puts pressure on Australia to do the same.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/south-koreas-green-new-deal-shows-the-world-what-a-smart-economic-recovery-looks-like-145032">South Korea's Green New Deal shows the world what a smart economic recovery looks like</a>
</strong>
</em>
</p>
<hr>
<p>The European Union has also been <a href="https://www.euractiv.com/section/energy/news/europe-urges-china-to-match-its-climate-ambitions/">urging China</a> to take stronger climate action. The fact Xi made the net-zero pledge at a United Nations meeting suggests it was largely targeted at an international, rather than Chinese, audience.</p>
<p>However, the international community will judge China’s pledge on how quickly it can implement specific, measurable short- and mid-term targets for net-zero emissions, and whether it has the policies in place to ensure the goal is delivered by 2060.</p>
<p>Much is resting on China’s next <a href="https://chinadialogue.net/en/climate/11434-the-14th-five-year-plan-what-ideas-are-on-the-table/">Five Year Plan</a> – a policy blueprint created every five years to steer the economy towards various priorities. The latest plan, covering 2021–25, is being developed. It will be examined closely for measures such as phasing out coal and more ambitious targets for renewables.</p>
<p>Also key is whether the recent <a href="https://www.carbonbrief.org/guest-post-why-chinas-co2-emissions-grew-4-during-first-half-of-2019">rebound</a> of China’s carbon emissions – following a fall from 2013 to 2016 – can be reversed. </p>
<figure class="align-center ">
<img alt="President Xi and President Trump" src="https://images.theconversation.com/files/362343/original/file-20201008-16-1mrrzeo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/362343/original/file-20201008-16-1mrrzeo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=355&fit=crop&dpr=1 600w, https://images.theconversation.com/files/362343/original/file-20201008-16-1mrrzeo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=355&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/362343/original/file-20201008-16-1mrrzeo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=355&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/362343/original/file-20201008-16-1mrrzeo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=446&fit=crop&dpr=1 754w, https://images.theconversation.com/files/362343/original/file-20201008-16-1mrrzeo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=446&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/362343/original/file-20201008-16-1mrrzeo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=446&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">President Xi, left, has taken the high ground over the Trump-led US with its bold climate plan.</span>
<span class="attribution"><span class="source">AP</span></span>
</figcaption>
</figure>
<h2>Wriggle room</h2>
<p>The 2060 commitment is bold, but China may look to leave itself wriggle room in several ways.</p>
<p>First, Xi declared in his speech that China will “aim to” achieve carbon neutrality, leaving open the option his nation may not meet the target.</p>
<p>Second, the Paris Agreement states that developed nations should provide financial <a href="https://unfccc.int/files/essential_background/convention/application/pdf/english_paris_agreement.pdf">resources and technological support</a> to help developing countries reduce their emissions. China may make its delivery of the pledge conditional on this support.</p>
<p>Third, China may seek to game the way carbon neutrality is measured – for example, by insisting it excludes carbon emissions “embodied” in imports and exports. This move is quite likely, given exports account for a <a href="https://www.sciencedirect.com/science/article/pii/S0140988316302432">significant share</a> of China’s total greenhouse gas emissions.</p>
<p>So for the time being, the world is holding its applause for China’s commitment to carbon neutrality. Like every nation, China will be judged not on its climate promises, but on its delivery. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/backwards-federal-budget-morrison-government-never-fails-to-disappoint-on-climate-action-147659">'Backwards' federal budget: Morrison government never fails to disappoint on climate action</a>
</strong>
</em>
</p>
<hr>
<img src="https://counter.theconversation.com/content/147268/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Hao Tan receives funding from the Australia Research Council (ARC) Discovery Project 2019-2021. He previously received funding from the Academy of the Social Sciences in Australia, and funding from the Confucius Institute Headquarters under the "Understanding China Fellowship" in 2017. </span></em></p><p class="fine-print"><em><span>Elizabeth Thurbon currently receives funding from the Australian Research Council (ARC) and the Academy of Korean Studies. She has previously received funding from the Academy of Social Sciences in Australia and the Korea Foundation. She is an elected member of the Executive Council of the Society for the Advancement of Socio-Economics (SASE) and a Research Committee member and Board member of the Jubilee Australia Research Centre (JARC).</span></em></p><p class="fine-print"><em><span>John Mathews receives funding from the ARC for the study of the clean energy transition in East Asia. </span></em></p><p class="fine-print"><em><span>Sung-Young Kim receives funding from the Australia Research Council (ARC) and has previously received funding from the Academy of Korean Studies (AKS). He is Chair of the Organising Committee for the 2021 Australian Political Studies Association (APSA) Annual Conference and is Treasurer of the Korean Studies Association of Australasia (KSAA).</span></em></p>It remains to be seen whether China’s climate promise is genuine. But it puts pressure on many other nations – not least Australia – to follow.Hao Tan, Associate professor, University of NewcastleElizabeth Thurbon, Scientia Fellow and Associate Professor in International Relations / International Political Economy, UNSW SydneyJohn Mathews, Professor Emeritus, Macquarie Business School, Macquarie UniversitySung-Young Kim, Senior Lecturer in International Relations, Discipline of Politics & International Relations, Macquarie School of Social Sciences, Macquarie UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1454422020-09-10T04:58:01Z2020-09-10T04:58:01ZRelax, losing access to China won’t make us the ‘poor white trash of Asia’<p>In another round of the increasingly bitter exchanges between China and Australia, a columnist for China’s Global Times, Yu Lei, suggested that a further decoupling from China will make former Singapore Prime Minister Lee Kuan Yew’s famous prediction <a href="https://www.globaltimes.cn/content/1199471.shtml">a reality</a>: </p>
<p>Australia would become the “<a href="https://www.afr.com/politics/the-poor-white-trash-of-asia-a-phrase-that-changed-an-economy-20150323-1m5mzm">poor white trash of Asia</a>.” </p>
<p>The “<a href="https://www.aspistrategist.org.au/lee-kuan-yew-and-oz-white-trash-or-white-tribe-of-asia-1/">white trash</a>” debate took place 30 to 40 years ago and caused a lot of hand-wringing.</p>
<p>Yet, contrary to predictions at the time, Australian incomes and living standards have remained comfortably above most of our Asian neighbours. </p>
<p>That’s not because we have performed spectacularly well. Australia ranked 12th in the OECD ranking in the early 1980s and it now ranks 10th or 11th. </p>
<p>But growth rates in Asia have slowed as the easy gains from technological progress have been exhausted.</p>
<p>Although the racially charged imagery of white trash attracted attention, much of the angst in the 1980s was about our standing within the group of rich countries.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/357346/original/file-20200910-14-1axzl5z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/357346/original/file-20200910-14-1axzl5z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/357346/original/file-20200910-14-1axzl5z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=971&fit=crop&dpr=1 600w, https://images.theconversation.com/files/357346/original/file-20200910-14-1axzl5z.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=971&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/357346/original/file-20200910-14-1axzl5z.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=971&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/357346/original/file-20200910-14-1axzl5z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1220&fit=crop&dpr=1 754w, https://images.theconversation.com/files/357346/original/file-20200910-14-1axzl5z.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1220&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/357346/original/file-20200910-14-1axzl5z.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1220&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Singapore Prime Minister Lee Kuan Yew claimed Australia could become ‘white trash’</span>
</figcaption>
</figure>
<p>The key talking point was that while Australia was thought to have had the world’s <a href="https://eh.net/encyclopedia/the-economic-history-of-australia-from-1788-an-introduction/">highest</a> income per person in the late 19th century, it had fallen to 12th in rankings of rich countries. </p>
<p>A further decline was widely predicted in books like <a href="https://www.amazon.com/Australia-Worst-Yet-Come-Collection/dp/0959224246">Australia, The Worst Is Yet To Come</a>. </p>
<p>I criticised this <a href="https://www.rba.gov.au/publications/confs/1995/quiggin-disc.html">line of thinking</a> at the time on the grounds that our number one position in the 19th century rested primarily on the demographic structure of what was still a frontier society, dominated by working age males. </p>
<p>In addition, Indigenous workers contributed to output but weren’t counted as part of the population. </p>
<p>Once I adjusted for these factors, Australia turned out to be in the middle of a group of rich countries in the late 19th century, just as it was in the late 20th.</p>
<p>Interestingly, a similar point can be made about Singapore today.</p>
<h2>Our ranking hasn’t changed much since the 1980s</h2>
<p>While most other Asian countries still have income levels below those in Australia, Singapore appears on lists as one of the richest countries. </p>
<p>This is partly due to the fact that one-third of its workforce is made up of migrant workers, many living in Third World conditions and sending remittances home. </p>
<p>The high number of migrant workers results in a high ratio of employment to measured population (since the families aren’t counted). As well, because migrant worker wages are so low, Singapore’s citizens can afford to hire migrants as domestic servants and for other purposes. </p>
<p>After correcting for these biases, Singapore has about the same income per person as Australia, but with a massively-unequal distribution.</p>
<p>How much does all this matter to the typical Australian family? Hardly at all. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/chinas-leaders-are-strong-and-emboldened-its-wrong-to-see-them-as-weak-and-insecure-143830">China's leaders are strong and emboldened. It's wrong to see them as weak and insecure</a>
</strong>
</em>
</p>
<hr>
<p>For any given family, living standards depend more on the distribution of income, and on the ups and downs of the labour market, than on variations in Australia’s performance relative to other developed countries, or relative to our Asian neighbours. </p>
<p>Getting domestic policy right on issues like employment and health care is far more important than “international competitiveness” – even more so during the pandemic.</p>
<p>Now let’s turn to the suggestion that, in the absence of more compromise with China on trade and policy issues, we will indeed end up as poor white trash.</p>
<h2>We need China, but we’d manage without it</h2>
<p>The obvious threat is to our exports and, in particular, iron ore which is our biggest single export and goes mostly to China. </p>
<p>On the face of it, it’s a big deal. Australia exports just over A$100 billion a year worth or iron ore, mostly to China, but only a fraction of this money represents income for ordinary Australians. </p>
<p>The mining industry in Western Australia employs about 100,000 people – less than 1% of Australia’s workforce. Their wages amount to about $10 billion a year. </p>
<p>In addition, major iron ore mining companies pay around $15 billion a year in royalties and company taxes. The combined income flow is about 1% of Australia’s national income. </p>
<h2>Iron ore adds just a few percent to our national income</h2>
<p>Most of the rest of the industry’s income flows overseas, to pay for imported equipment or as returns to overseas bondholders and shareholders.</p>
<p>And even if the China’s market was closed to Australia, there would be offsets.</p>
<p>Iron ore is a commodity, meaning that if China bought more of it from other producers <a href="https://www.afr.com/world/asia/china-expands-port-facilities-for-brazil-s-iron-ore-supercarriers-20200811-p55kpv">such as Brazil</a>, there would be less Brazilian iron ore in the market for other customers who would have a greater need for Australian iron ore.</p>
<p>And to the extent that Australian iron ore exports did fall, the Australian dollar would depreciate, making other Australian exports more attractive.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/why-the-australia-china-relationship-is-unravelling-faster-than-we-could-have-imagined-145836">Why the Australia-China relationship is unravelling faster than we could have imagined</a>
</strong>
</em>
</p>
<hr>
<p>Similar points can be made about other exports to China including Australian tourism and education services.</p>
<p>That’s not to say that we should be complacent about the risks of a breakdown in our trading relationship with China. A loss of 2% of 3 % of national income is comparable to the impact of a standard recession and would entail plenty of economic disruption with accompanying unemployment.</p>
<p>But, as the founder of modern economics Adam Smith ironically observed, there is “<a href="https://spectator.org/a-lot-of-ruin-in-a-nation/">a great deal of ruin in a nation</a>”. </p>
<p>Losing access to China’s market would make us a little poorer, but it wouldn’t make us the poor white trash of Asia, not now, or any time soon.</p><img src="https://counter.theconversation.com/content/145442/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Quiggin does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Australia’s living standards have remained remarkably stable compared to those of other countries. Losing access to China wouldn’t change that much.John Quiggin, Professor, School of Economics, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1450982020-09-02T05:01:27Z2020-09-02T05:01:27ZHow Clive Palmer could challenge the act designed to stop him getting $30 billion<figure><img src="https://images.theconversation.com/files/355982/original/file-20200902-18-2k7n52.jpg?ixlib=rb-1.1.0&rect=21%2C25%2C2842%2C1850&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Dan Peled/AAP</span></span></figcaption></figure><p>The West Australian government recently took the extraordinary step of <a href="https://theconversation.com/the-wa-government-legislated-itself-a-win-in-its-dispute-with-clive-palmer-and-put-itself-above-the-law-144360">passing legislation</a> to try to stop mining magnate Clive Palmer from collecting about $30 billion in damages from the state. </p>
<p>As Premier Mark McGowan argues, such a hefty bill <a href="https://www.watoday.com.au/politics/western-australia/liberals-line-up-to-blast-mcgowan-s-claim-palmer-lawsuit-would-close-hospitals-schools-20200814-p55lqv.html">risks bankrupting WA</a>. </p>
<p>While the so-called “<a href="https://www.legislation.wa.gov.au/legislation/prod/filestore.nsf/FileURL/mrdoc_43095.htm/$FILE/Iron%20Ore%20Processing%20(Mineralogy%20Pty%20Ltd)%20Agreement%20Amendment%20Act%202020%20-%20%5B00-00-00%5D.html?OpenElement">Mineralogy Act</a>” passed state parliament in <a href="https://www.abc.net.au/news/2020-08-14/clive-palmer-wa-row-not-over-despite-laws-to-block-damages-claim/12556616">just two days</a>, it is far from straightforward. </p>
<p>It raises a host of questions that are likely to be tested in courts in the months - and possibly years - ahead. </p>
<h2>What is this dispute about?</h2>
<p>Palmer is <a href="https://www.smh.com.au/national/what-are-the-disputes-involving-clive-palmer-and-the-wa-government-about-20200819-p55ndk.html">no stranger to litigation</a>. Recently, he has also been fighting the WA government over <a href="https://theconversation.com/federal-court-finds-border-closures-safest-way-to-protect-public-health-in-clive-palmer-case-145038">COVID border closures</a>. </p>
<p>But this particular dispute dates back to 2012 and concerns an iron ore project in the Pilbara. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/federal-court-finds-border-closures-safest-way-to-protect-public-health-in-clive-palmer-case-145038">Federal Court finds border closures safest way to protect public health in Clive Palmer case</a>
</strong>
</em>
</p>
<hr>
<p>Palmer has argued his development proposals for the Balmoral South iron ore project were unlawfully refused by the previous state government, under former premier Colin Barnett. He is reportedly seeking about <a href="https://www.abc.net.au/news/2020-08-18/clive-palmer-seeking-tens-of-billions-documents-reveal/12570338">$30 billion</a> in damages.</p>
<h2>The Mineralogy Act</h2>
<p>In mid-August, the state government <a href="https://www.abc.net.au/news/2020-08-14/clive-palmer-wa-row-not-over-despite-laws-to-block-damages-claim/12556616">passed the Mineralogy Act</a> to terminate the damages claims against it.</p>
<figure class="align-center ">
<img alt="WA Premier Mark McGowan" src="https://images.theconversation.com/files/355943/original/file-20200902-18-wgjv5u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/355943/original/file-20200902-18-wgjv5u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=384&fit=crop&dpr=1 600w, https://images.theconversation.com/files/355943/original/file-20200902-18-wgjv5u.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=384&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/355943/original/file-20200902-18-wgjv5u.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=384&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/355943/original/file-20200902-18-wgjv5u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=482&fit=crop&dpr=1 754w, https://images.theconversation.com/files/355943/original/file-20200902-18-wgjv5u.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=482&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/355943/original/file-20200902-18-wgjv5u.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=482&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The McGowan government says the legislation is needed to protect the ‘interests’ of WA.</span>
<span class="attribution"><span class="source">Richard Wainwright/AAP</span></span>
</figcaption>
</figure>
<p>Before this, Palmer and his companies, including Mineralogy, had been pursuing these claims through arbitration - a dispute resolution process that happens outside the courts. This arbitration was about whether the WA government properly dealt with proposals Palmer’s companies made under a <a href="http://classic.austlii.edu.au/au/legis/wa/consol_act/iopplaa2002502/sch1.html">2002 agreement</a>. </p>
<p>Last week, after the act passed, Palmer declared he would sue McGowan and Attorney-General John Quigley for “<a href="https://www.abc.net.au/news/2020-08-26/clive-palmer-suing-mark-mcgowan-john-quigley-in-new-legal-action/12596538">contempt of the High Court of Australia</a>”.</p>
<p>This is likely to be one of many salvos in a protracted legal battle.</p>
<h2>Does Palmer have a claim for contempt of court?</h2>
<p>Contempt of court means acts that interfere with or undermine the <a href="http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/HCA/1995/3.html?context=1;query=witham%20v%20holloway;mask_path=">authority, performance or dignity</a> of the courts.</p>
<p>The Mineralogy Act seeks to terminate the arbitration for the reported $30 billion claims. </p>
<p>It also invalidates existing arbitral awards, which are decisions determining parties’ rights and liabilities. Given that arbitrations are not court proceedings, these aspects of the act do not establish contempt of court.</p>
<p>However, where a party does not comply with an arbitration award, the award can be registered with the courts and then enforced as if it were a court judgment. </p>
<figure class="align-center ">
<img alt="Dumper truck in the Pilbara." src="https://images.theconversation.com/files/355945/original/file-20200902-14-hmw42n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/355945/original/file-20200902-14-hmw42n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/355945/original/file-20200902-14-hmw42n.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/355945/original/file-20200902-14-hmw42n.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/355945/original/file-20200902-14-hmw42n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/355945/original/file-20200902-14-hmw42n.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/355945/original/file-20200902-14-hmw42n.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">This dispute is over an iron ore project in the Pilbara.</span>
<span class="attribution"><span class="source">Kim Christian/AAP</span></span>
</figcaption>
</figure>
<p>Before the act was passed, Palmer had registered <a href="https://www.theguardian.com/australia-news/2020/aug/13/clive-palmer-says-queensland-court-action-makes-wa-move-to-avoid-damages-unconstitutional">two arbitration awards</a> in the Queensland Supreme Court. The act seeks to remove the basis for these claims. There is <a href="http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VicSC/1995/510.html?context=1;query=Dagi;mask_path=">precedent</a> that this may constitute contempt of the Queensland court (although contrary to Palmer’s assertions, not the High Court). </p>
<p>However, even if Palmer establishes contempt of the Queensland court, that would not invalidate the Mineralogy Act. Any penalty imposed by the court would also be modest in comparison to the $30 billion damages claim.</p>
<h2>Can the WA parliament pass a law that takes away rights without compensation?</h2>
<p>Apart from the contempt issue, Palmer may argue the WA parliament cannot pass a law that takes away individual rights without compensation. </p>
<p>In this regard, state laws that take away rights are unusual, <a href="http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/HCA/2001/7.html?context=1;query=durham%20holdings;mask_path=">but not new</a>. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-wa-government-legislated-itself-a-win-in-its-dispute-with-clive-palmer-and-put-itself-above-the-law-144360">The WA government legislated itself a win in its dispute with Clive Palmer — and put itself above the law</a>
</strong>
</em>
</p>
<hr>
<p>The <a href="https://cdn.hcourt.gov.au/assets/publications/judgment-summaries/2015/hca-13-2015-04-15.pdf">High Court</a> and <a href="https://www.queenslandjudgments.com.au/case/id/501587">Queensland</a> and <a href="https://insidestory.org.au/the-ghost-of-lang-hancock/">WA supreme courts</a> have previously treated state laws that remove rights of particular persons without just compensation as valid. </p>
<p>While the WA parliament has not previously amended a state agreement with a mining company without consent, this was found to be valid in <a href="https://www.queenslandjudgments.com.au/case/id/501587">Queensland</a>. This approach is consistent with the principle that the present parliament can generally amend existing laws.</p>
<p>As a political, rather than legal matter, politicians have found that laws targeting mining rights <a href="https://www.theguardian.com/australia-news/2017/mar/14/wa-nationals-leader-brendon-grylls-loses-seat-to-labor-after-attack-from-mining-lobby">can be hazardous</a>. </p>
<p>Whether public opinion will ultimately support the Mineralogy Act remains to be seen. But the <a href="https://www.watoday.com.au/national/western-australia/mark-mcgowan-for-pm-wa-punters-might-want-it-but-does-labor-20200805-p55ix6.html">current popularity</a> of the WA government over its handling of COVID-19 and the <a href="https://www.watoday.com.au/politics/western-australia/wa-premier-s-populism-makes-palmer-a-legal-pariah-but-why-20200812-p55l51.html">potential popularity</a> of “saving” the state’s finances will undoubtedly influence perspectives. </p>
<h2>Are parts of the Mineralogy Act unconstitutional?</h2>
<p>Palmer may also argue parts of the Mineralogy Act are unconstitutional.</p>
<p>Parliaments can pass laws about matters involved in ongoing legal disputes. They can even target particular cases or parties. But based on Chapter III of the <a href="https://www.aph.gov.au/About_Parliament/Senate/Powers_practice_n_procedures/%7E/link.aspx?_id=1A4B10F0E0C645D68D16DC6953E7CE52&_z=z">Constitution</a>, they can’t compromise the court’s integrity by telling a court how to decide. This constitutional line is often tricky to draw. </p>
<figure class="align-center ">
<img alt="Clive Palmer at a press conference on the Gold Coast." src="https://images.theconversation.com/files/355921/original/file-20200902-14-1l88z79.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/355921/original/file-20200902-14-1l88z79.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/355921/original/file-20200902-14-1l88z79.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/355921/original/file-20200902-14-1l88z79.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/355921/original/file-20200902-14-1l88z79.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/355921/original/file-20200902-14-1l88z79.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/355921/original/file-20200902-14-1l88z79.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Clive Palmer says he will sue the WA government over the Mineralogy Act.</span>
<span class="attribution"><span class="source">Dan Paled/AAP</span></span>
</figcaption>
</figure>
<p>The act does not entirely remove the court’s power to examine the legality of government actions. But it does try to stop courts from giving remedies that are unfavourable to WA.</p>
<p>So, it doesn’t quite tell courts how to decide, but it does restrict what they can do, which is getting into uncertain constitutional territory. </p>
<p>The WA government <a href="https://www.parliament.wa.gov.au/Hansard/hansard.nsf/0/FDACB99A1DDAB100482585D100069AC5/$FILE/A40%20S1%2020200811%20p4594b-4599a.pdf">has described</a> the Mineralogy Act as “unprecedented,” containing a number of measures that are “not usual”. </p>
<blockquote>
<p>but Mineralogy and Mr Palmer are not normal and these measures are needed to best protect the interests of the state and the community.</p>
</blockquote>
<p>However, even necessary laws must be constitutional.</p>
<h2>Does Palmer really stand to gain $30 billion in damages anyway?</h2>
<p>Palmer has said the widely reported $30 billion price tag is “<a href="https://www.abc.net.au/news/2020-08-14/clive-palmer-wa-row-not-over-despite-laws-to-block-damages-claim/12556616">bullshit</a>”. But Quigley <a href="https://www.abc.net.au/news/2020-08-18/clive-palmer-seeking-tens-of-billions-documents-reveal/12570338">tabled details </a>in parliament last month showing the total damages sought by Palmer and his companies in relation to the iron ore project was at least $27.75 billion.</p>
<p>Palmer’s <a href="https://www.parliament.wa.gov.au/Hansard/hansard.nsf/0/FDACB99A1DDAB100482585D100069AC5/$FILE/A40%20S1%2020200811%20p4594b-4599a.pdf">damages claims</a> focus on the loss of opportunities to develop and sell the project to Chinese state-owned enterprises. </p>
<p>But core principles for assessing damages for breach of contract - which in this case is a <a href="https://www.legislation.wa.gov.au/legislation/prod/filestore.nsf/FileURL/mrdoc_43096.htm/$FILE/Iron%20Ore%20Processing%20(Mineralogy%20Pty%20Ltd)%20Agreement%20Act%202002%20-%20%5B00-c0-01%5D.html?OpenElement">2002 agreement</a> between Mineralogy and the state government - may stand in the way.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/these-young-queenslanders-are-taking-on-clive-palmers-coal-company-and-making-history-for-human-rights-138732">These young Queenslanders are taking on Clive Palmer's coal company and making history for human rights</a>
</strong>
</em>
</p>
<hr>
<p>The state’s improper delay in approving the project must have caused the loss - but it is <a href="https://www.parliament.wa.gov.au/Hansard/hansard.nsf/0/FDACB99A1DDAB100482585D100069AC5/$FILE/A40%20S1%2020200811%20p4594b-4599a.pdf">not clear</a> this is the case. There may have been other reasons for the losses, including the <a href="https://www.ft.com/content/b33b2fc8-cd8d-11e4-9144-00144feab7de">post-GFC mining slump</a>.</p>
<p>Also, the value of what Palmer has lost needs to reflect the likelihood the project would have occurred without the delay, and so is likely to be much lower than $30 billion. </p>
<p>Palmer must also have taken reasonable steps to minimise his loss. This might mean following the standard industry practice of <a href="https://www.parliament.wa.gov.au/Hansard/hansard.nsf/0/FDACB99A1DDAB100482585D100069AC5/$FILE/A40%20S1%2020200811%20p4594b-4599a.pdf">amending the development</a> proposals to meet state government conditions, noting the Mineralogy Act still leaves this possibility open.</p>
<h2>What happens now?</h2>
<p>Palmer has a potential claim that the passage of the Mineralogy Act constitutes contempt of the Queensland Supreme Court. It is also possible parts of the act, such as those that restrict the remedies available to courts, are unconstitutional. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/mineral-wealth-clive-palmer-and-the-corruption-of-australian-politics-117248">Mineral wealth, Clive Palmer, and the corruption of Australian politics</a>
</strong>
</em>
</p>
<hr>
<p>However, even if Palmer succeeds in these claims, it is not clear how much he will actually gain financially, or if his claim is really worth $30 billion.</p>
<p>The Mineralogy Act is so unusual, it would be foolish to predict outcomes to these complex legal questions. Over the coming months, we will start seeing answers to these questions as Palmer brings lawsuits and proceedings work their way through the courts. </p>
<p>The answers will provide profound insights into the decision-making powers of states.</p><img src="https://counter.theconversation.com/content/145098/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Murray Wesson has previously received funding from the International Mining for Development Centre (IM4DC).</span></em></p><p class="fine-print"><em><span>Ian Murray has previously received funding from Rio Tinto, BHP Billiton and the Minerals Council of Australia for research relating to Indigenous benefits management structures.
Ian is also on a working group with the Minerals Council of Australia and the National Native Title Council focussed on Indigenous economic development. </span></em></p><p class="fine-print"><em><span>John Southalan has previously worked with a land council, assisting clients in proceedings against Mineralogy companies. Nothing from that work has informed, nor is relied on, in this article.</span></em></p><p class="fine-print"><em><span>Dr Natalie Brown has received funding from National Centre for Groundwater Research and Training, Centre for Mining Energy and Natural Resources Law (UWA) for PhD research. </span></em></p><p class="fine-print"><em><span>Sarah Murray has received funding from the Australian Institute of Criminology and the WA Public Purposes Trust.</span></em></p><p class="fine-print"><em><span>Julie Falck does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The legislation designed to stop Palmer claiming huge damages against WA raises a host of questions.Murray Wesson, Senior Lecturer in Law, The University of Western AustraliaIan Murray, Associate Professor, The University of Western AustraliaJohn Southalan, Global Faculty (Centre of Energy, Petroleum and Mineral Law & Policy), University of DundeeJulie Falck, Lecturer, The University of Western AustraliaNatalie Brown, Lecturer in Administrative and Property Law; PhD in WA iron ore State agreements, The University of Western AustraliaSarah Murray, Professor specialising in public law and less-adversarial justice, The University of Western AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1451662020-09-01T19:58:40Z2020-09-01T19:58:40ZRenewable energy can save the natural world – but if we’re not careful, it will also hurt it<figure><img src="https://images.theconversation.com/files/355710/original/file-20200901-18-rxpx93.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C5238%2C3500&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>A vast transition from fossil fuels to renewable energy is crucial to slowing climate change. But building solar panels, wind turbines and other renewable energy infrastructure requires <a href="https://www.resourcepanel.org/reports/green-energy-choices-benefits-risks-and-trade-offs-low-carbon-technologies-electricity">mining for materials</a>. If not done responsibly, this may damage species and ecosystems.</p>
<p>In <a href="https://www.nature.com/articles/s41467-020-17928-5">our research</a>, published today, we mapped the world’s potential mining areas and assessed how they overlap with biodiversity conservation sites. </p>
<p>We found renewable energy production will exacerbate the threat mining poses to biodiversity – the world’s variety of animals and plants. It’s fair to assume that in some places, the extraction of renewables minerals may cause more damage to nature than the climate change it averts.</p>
<p>Australia is well placed to become a leader in mining of renewable energy materials and drive the push to a low-carbon world. But we must act now to protect our biodiversity from being harmed in the process.</p>
<figure class="align-center ">
<img alt="A wind farm" src="https://images.theconversation.com/files/355711/original/file-20200901-18-1bcz015.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/355711/original/file-20200901-18-1bcz015.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/355711/original/file-20200901-18-1bcz015.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/355711/original/file-20200901-18-1bcz015.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/355711/original/file-20200901-18-1bcz015.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/355711/original/file-20200901-18-1bcz015.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/355711/original/file-20200901-18-1bcz015.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Renewable energy infrastructure such as wind farms are good for the planet – but it requires minerals extraction.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>Mining to prevent climate change</h2>
<p>Currently, <a href="http://documents1.worldbank.org/curated/en/207371500386458722/pdf/117581-WP-P159838-PUBLIC-ClimateSmartMiningJuly.pdf">about 17%</a> of current global energy consumption is achieved through renewable energy. To further reduce greenhouse gas emissions, this proportion must rapidly increase. </p>
<p>Building new renewable energy infrastructure will involve mining minerals and metals. Some of these include:</p>
<ul>
<li>lithium, graphite and cobalt (mostly used in battery storage)</li>
<li>zinc and titanium (used mostly for wind and geothermal energy)</li>
<li>copper, nickle and aluminium (used in a range of renewable energy technologies).</li>
</ul>
<p>The World Bank <a href="https://www.worldbank.org/en/topic/extractiveindustries/brief/climate-smart-mining-minerals-for-climate-action">estimates</a> the production of such materials could increase by 500% by 2050. It says more than 3 billion tonnes of minerals and metals will be needed to build the wind, solar and geothermal power, and energy storage, needed to keep global warming below 2°C this century.</p>
<p>However, mining can seriously damage species and places. It <a href="https://royalsocietypublishing.org/doi/full/10.1098/rspb.2018.1926">destroys natural habitat</a>, and <a href="https://www.nature.com/articles/s41467-017-00557-w">surrounding environments</a> can be harmed by the construction of transport infrastructure such as roads and railways. </p>
<figure class="align-center ">
<img alt="An evaporation pond used to measure lithium and in the Uyuni salt desert in Bolivia." src="https://images.theconversation.com/files/355698/original/file-20200901-16-1f31kdv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/355698/original/file-20200901-16-1f31kdv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/355698/original/file-20200901-16-1f31kdv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/355698/original/file-20200901-16-1f31kdv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/355698/original/file-20200901-16-1f31kdv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/355698/original/file-20200901-16-1f31kdv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/355698/original/file-20200901-16-1f31kdv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">An evaporation pond used to measure lithium and in the Uyuni salt desert in Bolivia. Mining can damage the environment if not done sustainably.</span>
<span class="attribution"><span class="source">Dado Galdieri/AP</span></span>
</figcaption>
</figure>
<h2>What we found</h2>
<p>We mapped areas around the world potentially affected by mining. Our analysis involved 62,381 pre-operational, operational, and closed mines targeting 40 different materials.</p>
<p>We found mining may influence about 50 million km² of Earth’s land surface (or 37%, excluding Antarctica). Some 82% of these areas contain materials needed for renewable energy production. Of this, 12% overlaps with protected areas, 7% with “<a href="http://www.keybiodiversityareas.org/home">key biodiversity areas</a>”, and 14% with remaining <a href="https://www.nature.com/articles/d41586-018-07183-6">wilderness</a>.</p>
<p>Our results suggest mining of renewable energy materials may increase in currently untouched and “biodiverse” places. These areas are considered <a href="https://www.nature.com/articles/nclimate2918">critical</a> to helping species overcome the challenges of climate change. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/355924/original/file-20200902-16-1mntn0l.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Areas around the world potentially influenced by mining" src="https://images.theconversation.com/files/355924/original/file-20200902-16-1mntn0l.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/355924/original/file-20200902-16-1mntn0l.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=317&fit=crop&dpr=1 600w, https://images.theconversation.com/files/355924/original/file-20200902-16-1mntn0l.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=317&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/355924/original/file-20200902-16-1mntn0l.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=317&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/355924/original/file-20200902-16-1mntn0l.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=398&fit=crop&dpr=1 754w, https://images.theconversation.com/files/355924/original/file-20200902-16-1mntn0l.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=398&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/355924/original/file-20200902-16-1mntn0l.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=398&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Areas potentially influenced by mining, including for the minerals needed in renewable energy production (shown in blue). See paper for detailed methodology and limitations.</span>
<span class="attribution"><span class="source">Authors provided</span></span>
</figcaption>
</figure>
<h2>Threats here and abroad</h2>
<p><a href="https://www.ga.gov.au/about/projects/resources/critical-minerals">Australia is well positioned</a> to become a leading supplier of materials for renewable energy. We are also <a href="https://www.worldatlas.com/articles/ecologically-megadiverse-countries-of-the-world.html">one of only 17 nations</a> considered ecologically “megadiverse”.</p>
<p>Yet, many of the minerals needed for renewable energy exist in important conservation areas.</p>
<p>For example, Australia is rich in lithium and already accounts for <a href="https://www.ga.gov.au/scientific-topics/minerals/mineral-resources-and-advice/australian-resource-reviews/lithium#heading-6">half of world production</a>. <a href="http://www.pilbaraminerals.com.au/site/content/">Hard-rock</a> lithium mines operate in the Pilbara region of Western Australia.</p>
<p>This area has also been <a href="https://www.environment.gov.au/biodiversity/conservation/hotspots/national-biodiversity-hotspots#hotspot14">identified</a> as a national biodiversity hotspot and is home to many native species. These include small marsupials such as the little red antechinus and the pebble-mound mouse, and reptiles including gecko and goanna species. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/world-first-mining-standard-must-protect-people-and-hold-powerful-companies-to-account-144285">World-first mining standard must protect people and hold powerful companies to account</a>
</strong>
</em>
</p>
<hr>
<p>Australia is also <a href="https://www.ga.gov.au/scientific-topics/minerals/mineral-resources-and-advice/australian-resource-reviews/rare-earth-elements#heading-6">ranked sixth</a> in the world for deposits of rare earth elements, many of which are needed to produce magnets for wind turbines. We also have large resources of other renewables materials such as cobalt, manganese, tantalum, tungsten and zirconium. </p>
<p>It’s critical that mining doesn’t damage Australia’s already vulnerable biodiversity, and harm the natural places valued by <a href="https://theconversation.com/rio-tinto-just-blasted-away-an-ancient-aboriginal-site-heres-why-that-was-allowed-139466">Indigenous</a> people and other communities.</p>
<p>In many cases, renewables minerals are found in countries where the resource sector is not strongly regulated, posing an even greater environmental threat. For example, the world’s <a href="https://www.bloomberg.com/news/features/2018-12-03/bolivia-s-almost-impossible-lithium-dream">second-largest</a> untouched lithium reserve exists in Bolivia’s Salar de Uyuni salt pan. This naturally diverse area is mostly <a href="https://conbio.onlinelibrary.wiley.com/doi/full/10.1111/j.1755-263X.2011.00166.x">untouched</a> by mining. </p>
<p>The renewables expansion will also require iron and steel. To date, mining for iron in Brazil has almost wiped out an entire <a href="https://link.springer.com/article/10.1007/s10531-007-9156-8">plant community</a>, and recent <a href="https://theconversation.com/dam-collapse-at-brazilian-mine-exposes-grave-safety-problems-110666">dam failures</a> devastated the environment and communities.</p>
<figure class="align-center ">
<img alt="A little red antechinus" src="https://images.theconversation.com/files/355700/original/file-20200901-22-17nnyi7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/355700/original/file-20200901-22-17nnyi7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=415&fit=crop&dpr=1 600w, https://images.theconversation.com/files/355700/original/file-20200901-22-17nnyi7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=415&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/355700/original/file-20200901-22-17nnyi7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=415&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/355700/original/file-20200901-22-17nnyi7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=522&fit=crop&dpr=1 754w, https://images.theconversation.com/files/355700/original/file-20200901-22-17nnyi7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=522&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/355700/original/file-20200901-22-17nnyi7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=522&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The Pilbara has large lithium deposits and is also home to the little red antechinus.</span>
<span class="attribution"><span class="source">Needpix</span></span>
</figcaption>
</figure>
<h2>We need proactive planning</h2>
<p>Strong planning and conservation action is needed to avoid, manage and prevent the harm mining causes to the environment. However global conservation efforts are often naive to the threats posed by significant growth in renewable energies. </p>
<p>Some protected areas around the world prevent mining, but more than 14% contain metal mines in or near their boundaries. Consequences for biodiversity may extend many kilometres from mining sites.</p>
<p>Meanwhile, other areas increasingly important for conservation are focused on the needs of biodiversity, and don’t consider the distribution of mineral resources and pressures to extract them. Conservation plans for these sites must involve strategies to manage the mining threat.</p>
<p>There is some good news. <a href="https://www.nature.com/articles/s41467-020-17928-5">Our analyses</a> suggest many required materials occur outside protected areas and other conservation priorities. The challenge now is to identify which species are most at risk from current and future mining development, and develop strong policies to avoid their loss. </p>
<p><em>The map in this article has been updated, because due to a technical issue the previous version omitted some information.</em></p><img src="https://counter.theconversation.com/content/145166/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Laura Sonter receives funding from the Australian Research Council and The University of Queensland. </span></em></p><p class="fine-print"><em><span>James Watson receives funding from National Environmental Science Program, the Australian Research Council and The University of Queensland. He is Director of the Science and Research Initiative at the Wildlife Conservation Society and serves as a volunteer on Bush Heritage Australia and BirdLife Australia science committees. </span></em></p><p class="fine-print"><em><span>Richard K Valenta receives funding from the Queensland State Government, The Northern Territory Government and the University of Queensland. He is chair of the research working group of the Queensland Exploration Council.</span></em></p>Building renewable energy infrastructure involves mining for materials such as lithium, graphite and cobalt. If not done responsibly, that could cause huge environmental damage.Laura Sonter, Lecturer in Environmental Management, The University of QueenslandJames Watson, Professor, The University of QueenslandRichard K Valenta, Director - WH Bryan Mining and Geology Research Centre - The Sustainable Minerals Institute, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1263412019-11-05T18:59:05Z2019-11-05T18:59:05ZAustralia is in the box seat to power the world<figure><img src="https://images.theconversation.com/files/300007/original/file-20191104-88419-lnffxw.jpg?ixlib=rb-1.1.0&rect=7%2C0%2C2488%2C1661&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Iron ore piles at Dampier, Western Australia. Australia could convert iron oxide to metal for export, producing it with no emissions.</span> <span class="attribution"><span class="source">CHRISTIAN SPROGOE/ Rio Tinto</span></span></figcaption></figure><p>Four years ago in December 2015, every member of the United Nations met in Paris and agreed to hold global temperature increases to 2°C, and as close as possible to 1.5°C. </p>
<p>The bad news is that four years on the best that we can hope for is holding global increases to around 1.75°C. We can only do that if the world moves decisively towards zero net emissions by the middle of the century.</p>
<p>A failure to act here, accompanied by similar paralysis in other countries, would see our grandchildren living with temperature increases of <a href="https://www.theguardian.com/environment/2019/may/18/climate-crisis-heat-is-on-global-heating-four-degrees-2100-change-way-we-live">around 4°C this century</a>, and more beyond. </p>
<p>I have spent my life on the positive end of discussion of Australian domestic and international policy questions. But if effective global action on climate change fails, I fear the challenge would be beyond contemporary Australia. I fear that things would fall apart. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/300006/original/file-20191104-88368-nlzoz0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/300006/original/file-20191104-88368-nlzoz0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/300006/original/file-20191104-88368-nlzoz0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/300006/original/file-20191104-88368-nlzoz0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/300006/original/file-20191104-88368-nlzoz0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/300006/original/file-20191104-88368-nlzoz0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/300006/original/file-20191104-88368-nlzoz0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The Yallourn coal-fired power station in the Latrobe Valley, Victoria.</span>
<span class="attribution"><span class="source">David Crosling/AAP</span></span>
</figcaption>
</figure>
<h2>There is reason to hope</h2>
<p>It’s not all bad news. </p>
<p>What we know today about the effect of increased concentrations of greenhouse gases broadly confirms the conclusions I drew from available research in previous climate change reviews <a href="https://webarchive.nla.gov.au/awa/20190509030954/http://www.garnautreview.org.au/2008-review.html">in 2008</a> and <a href="https://webarchive.nla.gov.au/awa/20190509030847/http://www.garnautreview.org.au/update-2011/garnaut-review-2011.html">2011</a>. I conducted these for, respectively, state and Commonwealth governments, and a federal cross-parliamentary committee. </p>
<p>But these reviews greatly overestimated the cost of meeting ambitious reduction targets. </p>
<p>There has been an extraordinary <a href="https://www.csiro.au/en/News/News-releases/2018/Annual-update-finds-renewables-are-cheapest-new-build-power">fall in the cost of equipment</a> for solar and wind energy, and of technologies to store renewable energy to even out supply. Per person, Australia has natural resources for renewable energy superior to any other developed country and far superior to our customers in northeast Asia. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/australias-hidden-opportunity-to-cut-carbon-emissions-and-make-money-in-the-process-124095">Australia's hidden opportunity to cut carbon emissions, and make money in the process</a>
</strong>
</em>
</p>
<hr>
<p>Australia is by far the world’s largest exporter of iron ore and aluminium ores. In the main they are processed overseas, but in the post-carbon world we will be best positioned to turn them into zero-emission iron and aluminium.</p>
<p>In such a world, there will be no economic sense in any aluminium or iron smelting in Japan or Korea, not much in Indonesia, and enough to cover only a modest part of domestic demand in China and India. The European commitment to early achievement of net-zero emissions opens a large opportunity there as well. </p>
<p>Converting one quarter of Australian iron oxide and half of aluminium oxide exports to metal would add more value and jobs than current coal and gas combined. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/300005/original/file-20191104-88428-37vk3q.jpg?ixlib=rb-1.1.0&rect=15%2C7%2C5145%2C3437&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/300005/original/file-20191104-88428-37vk3q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/300005/original/file-20191104-88428-37vk3q.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/300005/original/file-20191104-88428-37vk3q.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/300005/original/file-20191104-88428-37vk3q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/300005/original/file-20191104-88428-37vk3q.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/300005/original/file-20191104-88428-37vk3q.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Australia’s vast wind and solar energy resources mean it is well-placed to export industrial products in a low-carbon global economy.</span>
<span class="attribution"><span class="source">Flickr</span></span>
</figcaption>
</figure>
<h2>A natural supplier to the world’s industry</h2>
<p>With abundant low-cost electricity, Australia could grow into a major global producer of minerals needed in the post-carbon world such as lithium, titanium, vanadium, nickel, cobalt and copper. It could also become the natural supplier of pure silicon, produced from sand or quartz, for which there is fast-increasing global demand.</p>
<p>Other new zero-emissions industrial products will require little more than globally competitive electricity to create. These include ammonia, <a href="https://www.ceda.com.au/Digital-hub/Blogs/CEDA-Blog/August-2019/Unlocking-the-hydrogen-future">exportable hydrogen</a> and electricity transmitted by high-voltage cables to and through Indonesia and Singapore to the Asian mainland.</p>
<p>Australia’s exceptional endowment of forests and woodlands gives it an advantage in biological raw materials for industrial processes. And there’s an immense opportunity for capturing and sequestering, at relatively low cost, atmospheric carbon in soils, pastures, woodlands, forests and plantations. </p>
<p>Modelling conducted for my first report suggested that Australia would import emissions reduction credits, however today I expect Australia to cut domestic emissions to the point that it <a href="https://unfccc.int/international-emissions-trading">sells excess credits to other nations.</a></p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/300009/original/file-20191104-88382-eftevp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/300009/original/file-20191104-88382-eftevp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/300009/original/file-20191104-88382-eftevp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/300009/original/file-20191104-88382-eftevp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/300009/original/file-20191104-88382-eftevp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/300009/original/file-20191104-88382-eftevp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/300009/original/file-20191104-88382-eftevp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Tall white gum trees in northern Tasmania. Australia has huge potential to store more carbon in forests and woodlands.</span>
<span class="attribution"><span class="source">BARBARA WALTON/EPA</span></span>
</figcaption>
</figure>
<h2>The transition is an economic winner</h2>
<p>Technologies to produce and store zero-emissions energy and sequester carbon in the landscape are highly capital-intensive. They have therefore benefited exceptionally from the historic fall in global interest rates over the past decade. This has reduced the cost of transition to zero emissions, accentuating Australia’s advantage. </p>
<p>In 2008 the comprehensive modelling undertaken for the Garnaut Review suggested the transition would entail a noticeable (but manageable) sacrifice of Australian income in the first half of this century, followed by gains that would grow late into the second half of this century and beyond.</p>
<p>Today, calculations using similar techniques would give different results. Australia playing its full part in effective global efforts to hold warming to 2°C or lower would show economic gains instead of losses in early decades, followed by much bigger gains later on. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-science-of-drought-is-complex-but-the-message-on-climate-change-is-clear-125941">The science of drought is complex but the message on climate change is clear</a>
</strong>
</em>
</p>
<hr>
<p>If Australia is to realise its immense opportunity in a zero-carbon world, it will need a different policy framework. But we can make a strong start even with the incomplete and weak policies and commitments we have. Policies to help complete the transition can be built in a political environment that has been changed by early success. </p>
<h2>Three crucial steps</h2>
<p>Three early policy developments are needed. None contradicts established federal government policy. </p>
<p>First, the regulatory system has to focus strongly on the <a href="https://www.aemc.gov.au/energy-system/electricity/electricity-system/reliability">security and reliability</a> of electricity supplies, as it comes to be drawn almost exclusively from intermittent renewable sources. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/300010/original/file-20191104-88378-kx0r2f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/300010/original/file-20191104-88378-kx0r2f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/300010/original/file-20191104-88378-kx0r2f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/300010/original/file-20191104-88378-kx0r2f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/300010/original/file-20191104-88378-kx0r2f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/300010/original/file-20191104-88378-kx0r2f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/300010/original/file-20191104-88378-kx0r2f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A high-voltage electricity transmission tower in the Brisbane central business district.</span>
<span class="attribution"><span class="source">Darren England/AAP</span></span>
</figcaption>
</figure>
<p>Second, the government must support transformation of the <a href="https://www.aemo.com.au/Electricity/National-Electricity-Market-NEM/Planning-and-forecasting/National-Transmission-Network-Development-Plan">power transmission system</a> to allow a huge expansion of supply from regions with high-quality renewable energy resources not near existing transmission cables. This is likely to require new mechanisms to support private initiatives. </p>
<p>Third, the Commonwealth could secure a globally competitive cost of capital by underwriting new investment in reliable (or “firmed”) renewable electricity. This was a recommendation by the Australian Competition and Consumer Commission’s <a href="https://www.accc.gov.au/media-release/more-work-needed-to-make-electricity-prices-affordable">retail electricity price inquiry</a>, and has been adopted by the Morrison government.</p>
<h2>We must get with the Paris program</h2>
<p>For other countries to import large volumes of low-emission products from us, we will have to accept and be seen as delivering on emissions reduction targets consistent with the Paris objectives. </p>
<p>Paris requires net-zero emissions by mid-century. Developed countries have to reach zero emissions before then, so their interim targets have to represent credible steps towards that conclusion. </p>
<p>Japan, Korea, the European Union and the United Kingdom are the natural early markets for zero-emissions steel, aluminum and other products. China will be critically important. Indonesia and India and their neighbours in southeast and south Asia will sustain Australian exports of low-emissions products deep into the future. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/300011/original/file-20191104-88387-16b3t9k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/300011/original/file-20191104-88387-16b3t9k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=441&fit=crop&dpr=1 600w, https://images.theconversation.com/files/300011/original/file-20191104-88387-16b3t9k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=441&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/300011/original/file-20191104-88387-16b3t9k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=441&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/300011/original/file-20191104-88387-16b3t9k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=554&fit=crop&dpr=1 754w, https://images.theconversation.com/files/300011/original/file-20191104-88387-16b3t9k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=554&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/300011/original/file-20191104-88387-16b3t9k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=554&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">An electric car being charged. Australia has good supplies of lithium, used in electric vehicle batteries.</span>
<span class="attribution"><span class="source">Ian Langsdon/EPA</span></span>
</figcaption>
</figure>
<p>For the European Union, reliance on Australian exports of zero-emissions products would only follow assessments that we were making acceptable contributions to the global mitigation effort. </p>
<p>We will not get to that place in one step, or soon. But likely European restrictions on imports of high-carbon products, which will exempt those made with low emissions, will allow us a good shot. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/labors-reset-on-climate-and-jobs-is-a-political-mirage-126013">Labor's reset on climate and jobs is a political mirage</a>
</strong>
</em>
</p>
<hr>
<p>Movement will come gradually, initially with public support for innovation; then suddenly, as business and government leaders realise the magnitude of the Australian opportunity, and as humanity enters the last rush to avoid being overwhelmed by the rising costs of climate change. </p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/300033/original/file-20191104-88419-ca9gci.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/300033/original/file-20191104-88419-ca9gci.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/300033/original/file-20191104-88419-ca9gci.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=918&fit=crop&dpr=1 600w, https://images.theconversation.com/files/300033/original/file-20191104-88419-ca9gci.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=918&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/300033/original/file-20191104-88419-ca9gci.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=918&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/300033/original/file-20191104-88419-ca9gci.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1154&fit=crop&dpr=1 754w, https://images.theconversation.com/files/300033/original/file-20191104-88419-ca9gci.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1154&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/300033/original/file-20191104-88419-ca9gci.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1154&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The cover of ‘Superpower’ by Ross Garnaut.</span>
<span class="attribution"><span class="source">Supplied</span></span>
</figcaption>
</figure>
<p>The pace will be governed by progress in decarbonisation globally. That will suit us, as our new strengths in the zero-carbon world grow with the retreat of the old. We have an unparalleled opportunity. We are more than capable of grabbing it.</p>
<p><em>Ross Garnaut conducted the 2008 and 2011 climate reviews for the Rudd and Gillard governments. His book <a href="https://www.blackincbooks.com.au/books/superpower">Superpower – Australia’s Low-Carbon Opportunity</a>, is published today by BlackInc with La Trobe University Press.</em></p><img src="https://counter.theconversation.com/content/126341/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ross Garnaut chairs the international advisory board of the Australian German Energy Transition Hub and is a Distinguished Fellow of the Melbourne Energy Institute. He is chairman of, and a shareholder in, Sunshot Energy and a shareholder in SIMEC ZEN Energy, both of which are engaged in the development and trade of energy.
</span></em></p>Eminent economist Ross Garnaut says if climate action fails, he fears the consequences ‘would be beyond contemporary Australia’. But zero-emissions iron and aluminium could be the way forward.Ross Garnaut, Professorial Research Fellow in Economics, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1229732019-09-05T18:48:56Z2019-09-05T18:48:56ZVital Signs. Sure, economic growth is low, but think about what’s gone right<figure><img src="https://images.theconversation.com/files/291081/original/file-20190905-175673-pafnsd.jpg?ixlib=rb-1.1.0&rect=0%2C155%2C3994%2C2203&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">We've entered out 29th year of uninterpreted economic growth. Continued good fortune will require harder decisions.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Official figures released Wednesday show the Australian economy growing at the <a href="https://theconversation.com/why-weve-the-weakest-economy-since-the-global-financial-crisis-with-few-clear-ways-out-122942">slowest pace since the financial crisis</a>. </p>
<p>GDP growth was only 0.5% for the June quarter, meaning that in the past year output grew by a feeble 1.4%.</p>
<p>The figures weren’t a surprise, but they do contain a message about what can go wrong.</p>
<p>Australia has enjoyed 28 years of uninterrupted economic growth, in part due to good management, in part due to good luck, and in part due to happy accidents of timing.</p>
<h2>Good management</h2>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/291069/original/file-20190905-175714-1e2pi1d.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/291069/original/file-20190905-175714-1e2pi1d.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/291069/original/file-20190905-175714-1e2pi1d.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=874&fit=crop&dpr=1 600w, https://images.theconversation.com/files/291069/original/file-20190905-175714-1e2pi1d.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=874&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/291069/original/file-20190905-175714-1e2pi1d.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=874&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/291069/original/file-20190905-175714-1e2pi1d.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1098&fit=crop&dpr=1 754w, https://images.theconversation.com/files/291069/original/file-20190905-175714-1e2pi1d.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1098&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/291069/original/file-20190905-175714-1e2pi1d.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1098&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Australian prime minister Bob Hawke, honoured at Parliament House.</span>
<span class="attribution"><span class="source">Lukas Coch/AAP</span></span>
</figcaption>
</figure>
<p>Credit has to be paid to the economic reforms of the Hawke-Keating era. Labor doesn’t talk about that legacy much these days, but it was a remarkable period of transformation.</p>
<p>From floating the Australian dollar and financial deregulation to the accord with trade unions, tariff reductions, and privatisation of state-owned enterprises, Hawke and Keating opened Australia to the world, and the world to Australia.</p>
<p>Without those reforms the Australian economy would look more like those of Italy, Spain, or Portugal.</p>
<p>And although John Howard was no pushover as a politician, he deserves credit for voting for economic reforms he believed in, even if Labor got the credit for implementing them.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/as-prime-minister-bob-hawke-was-our-larrikin-but-also-our-reformer-117308">As prime minister, Bob Hawke was our larrikin, but also our reformer</a>
</strong>
</em>
</p>
<hr>
<p>It is worth remembering that there was a time, not so long ago, when politicians put country before party.</p>
<h2>Good luck</h2>
<p>We’ve also had some pretty good luck as a country. The most obvious piece of luck has been the economic awakening of China. </p>
<p>To have a billion people on our doorstep rapidly and radically transitioning from subsistence farming to sophisticated manufacturing and commerce, hungry for natural resources, sure helped.</p>
<p>Perhaps less obvious has been the rising importance of globally relevant cities around the world. </p>
<p>In his wonderful book, <a href="https://www.amazon.com/Triumph-City-Greatest-Invention-Healthier/dp/0143120549">The Triumph of the City</a>, Harvard economics professor Ed Glaeser chronicles how, as he puts it, “cities magnify humanity’s strengths”. </p>
<p>Modern cities, thanks in part to information technology, spur innovation like never before. They bring talent together, serve as a cradle for entrepreneurship, and provide a vehicle for socioeconomic mobility.</p>
<p>Australia, as a highly urbanised country with two globally relevant cities in Sydney and Melbourne, as well as several other very important cities, has benefited from the triumph of the city more than most countries.</p>
<h2>Great timing</h2>
<p>But perhaps the greatest piece of good luck we’ve had was timing.</p>
<p>We now know that we live in a low-growth, low-inflation world, known as a secular-stagnation world. Former US Treasury Secretary <a href="https://www.youtube.com/watch?v=KYpVzBbQIX0">Larry Summers</a> says we might have been in one for many years but failed to notice.</p>
<p>In Summers’s telling, secular stagnation was masked in the United States by a massive housing bubble. In Australia it was masked by a housing bubble and a once-in-a century mining boom.</p>
<p>But more to the point, as housing and mining waxed and waned – as these things tend to do – one always seemed to be doing well just as the other was struggling, as the following chart shows:</p>
<hr>
<p><strong>Helpfully out of sync. Growth in mining output and property prices</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/291063/original/file-20190905-175714-1kro0v6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/291063/original/file-20190905-175714-1kro0v6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/291063/original/file-20190905-175714-1kro0v6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=263&fit=crop&dpr=1 600w, https://images.theconversation.com/files/291063/original/file-20190905-175714-1kro0v6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=263&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/291063/original/file-20190905-175714-1kro0v6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=263&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/291063/original/file-20190905-175714-1kro0v6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=330&fit=crop&dpr=1 754w, https://images.theconversation.com/files/291063/original/file-20190905-175714-1kro0v6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=330&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/291063/original/file-20190905-175714-1kro0v6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=330&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Source: ABS</span></span>
</figcaption>
</figure>
<hr>
<p>So, not only have we had a “China boom”, we’ve also had a “China hedge”: a source of economic growth not fully synced with, and at times offsetting, housing booms and busts.</p>
<h2>What’s next?</h2>
<p>In eulogising his brother Robert, <a href="https://americanrhetoric.com/speeches/ekennedytributetorfk.html">Edward Kennedy quoted from a speech</a> his brother gave in South Africa in 1966, in which he said:</p>
<blockquote>
<p>Our future may lie beyond our vision, but it is not completely beyond our control. It is the shaping impulse of America that neither fate nor nature nor the irresistible tides of history, but the work of our own hands, matched to reason and principle, that will determine our destiny. </p>
<p>There is pride in that, even arrogance, but there is also experience and truth. In any event, it is the only way we can live.</p>
</blockquote>
<p>The same might be said of Australia. </p>
<p>We want to believe our national destiny will be shaped by good work, rather than good luck.</p>
<p>For that to be the case, we will need to have some hard discussions about the what government can and should do in the new low growth, low inflation secular-stagnation world.</p>
<hr>
<p><em>This is Richard Holden’s 200th article for The Conversation.</em></p><img src="https://counter.theconversation.com/content/122973/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard Holden does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>More than good management and more than good luck, we’ve been blessed by delightfully fortunate timing.Richard Holden, Professor of Economics, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1102242019-03-12T13:52:54Z2019-03-12T13:52:54ZBeneficiation is touted as a silver bullet. Why it might not be<figure><img src="https://images.theconversation.com/files/262914/original/file-20190308-155507-cfkr60.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The beneficiation of diamonds has brought great benefits to Botswana. </span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Like other mineral producing countries, South Africa has considered implementing beneficiation policies to stimulate development. <a href="https://www.gov.za/documents/beneficiation-strategy-minerals-industry-south-africa">Beneficiation</a> entails the transformation of a mineral (or a combination of minerals) to a higher value product. It’s therefore about the downstream processing of a mineral product – all the way from a raw mineral (such as iron ore) to final products (like a car).</p>
<p>The logic behind beneficiation is that raw minerals don’t, on their own, have high value added. Exporting them unprocessed means that they don’t contribute that much to the economy. The idea of beneficiation is to capture more value from minerals by processing them locally before exporting them. </p>
<p>There are lots of examples of beneficiation policies across the world. Indonesia <a href="https://www.sciencedirect.com/science/article/abs/pii/S0301420713000391">restricted and considered banning</a> the export of certain unprocessed minerals. For its part, China <a href="https://www.sciencedirect.com/science/article/pii/S030142071300041X">implemented</a> policies to force the downstream processing of rare earth elements – essential raw materials for a range of products including magnets, catalysts, alloys and glass.
In southern Africa, made <a href="https://www.sciencedirect.com/science/article/abs/pii/S030142071200044X">De Beers mining licence dependent</a> on diamonds being cut and polished in the country. </p>
<p>Many other countries, including the Philippines, Zimbabwe and South Africa, have all considered policies like this at one stage or another. </p>
<p>But is beneficiation the panacea that it’s made out to be? Is beneficiation a good industrial policy?</p>
<p>Some recent studies have cast doubt on using beneficiation policies to drive industrialisation. They argue that countries <a href="http://www.sciencedirect.com/science/article/pii/S030142071200044X">should rather develop the industries that support the mining industry</a>. The argument is that this <a href="https://theconversation.com/africa-can-get-more-from-its-minerals-by-building-industries-to-service-mines-104166">might be easier to achieve and more sustainable because local demand for these products already exists</a>. </p>
<p>We argue that beneficiation should be viewed within the context of a country’s larger industrial policy strategy. To do this, we analyse value chains in their entirety – from ore to final products. In <a href="https://www.tandfonline.com/doi/full/10.1080/00220388.2018.1528354">our research</a> on steel in South Africa, we posed the question: if we consider the steel value chain in its entirety – from iron ore to sophisticated final products such as aeroplanes – which parts of the value chain should South Africa support to gain the best developmental outcomes? </p>
<p>Our research casts further doubt on the wisdom of doggedly following a strict beneficiation approach without considering the other options for development available to mineral producing countries.</p>
<h2>Rethinking beneficiation</h2>
<p>Our research involved working out the strategic value of different products in the value chain and how difficult it would likely be to successfully export these products competitively given the current capabilities – such as skills and infrastructure – South Africa has.</p>
<p>We did this using two metrics:</p>
<ul>
<li><p><a href="https://atlas.media.mit.edu/static/pdf/atlas/AtlasOfEconomicComplexity_Part_I.pdf">Distance</a>: defining how easy it might be for a country given its existing export capabilities to attain international competitiveness for a product; and</p></li>
<li><p><a href="https://www.researchgate.net/publication/26314327_The_Building_Blocks_of_Economic_Complexity">Complexity</a>: the more complex the product, the more likely it is to contribute to economic growth.</p></li>
</ul>
<p>From this perspective, developing countries should try to develop the capabilities to export products with high complexity. And the focus should be on products that could easily be exported competitively (are “close” to them). </p>
<p>In the case of the iron and steel value chain, the upstream part of the value chain – related to iron ore and the activities that follow directly after it – on average, has lower complexity than the downstream part of the value chain – final products made from steel. This is what one might expect from the idea of beneficiation – downstream products are “better” for development.</p>
<p>In the case of South Africa’s involvement in the value chain, on average, the country has strong export capabilities upstream – in iron ore and the activities that follow directly after it. But, it is weak downstream – in the various final products made from steel. This seemingly indicates that South Africa should focus on increasing its beneficiation to move toward the more complex products. </p>
<p>South Africa also has larger distances, on average, to the further downstream products. This highlights the difficulty of beneficiation. </p>
<p>But the picture became a lot more nuanced once we started to dig deeper. For example, some products in the value chain that are not far downstream (against the average) have high complexities. Examples include specialised products such as flat-rolled alloy steel products. And there are products further downstream, that have low complexities. Here examples include finished products such as fishing vessels. </p>
<p>Furthermore, South Africa already competitively exports certain downstream products such as mining related machinery. Yet South Africa is not competitive in upstream products such as alloy steel ingots. </p>
<p>The same can be seen for distances. Some products not far downstream in the value chain might be hard for South Africa to export competitively (such as stainless steel-ingots), while some products further downstream are closely related to products the country already exports. These might therefore be easier for South Africa to export competitively. Examples here include machinery such as bulldozers. </p>
<p>This seems to suggest that our initial instinct from the average data – to follow a strict beneficiation-based industrial policy approach that seeks to consecutively ensure competitiveness of each step of the value chain – might be misguided. </p>
<h2>Development route</h2>
<p>With this insight in mind, we took our analysis further and investigated what the theoretically best possible developmental route within the value chain might be.</p>
<p>We found that the best developmental route in the steel value chain would be to follow a “leap-frogging” pattern. Our results suggest skipping various intermediate products, and to focus rather on a combination of final and semi-finished products, without first developing each step in the value chain that precedes them. </p>
<p>Instead of following a dogmatic beneficiation approach to industrial policy, it would be better to think creatively about the best way for countries to develop. Drawing from all the existing capabilities in a country, countries can target products with the greatest developmental potential before having to first develop each of the upstream industries. </p>
<p>This has the potential to lead to better developmental outcomes at lower cost.</p>
<p>In future, our methodology could also be used to support development policy in other industries and countries.</p><img src="https://counter.theconversation.com/content/110224/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>New analysis indicates that a strict beneficiation policy might not lead to optimal developmental outcomes.Wouter Bam, Researcher in Industrial Systems, Stellenbosch UniversityKarolien De Bruyne, KU LeuvenLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1106662019-01-29T19:50:10Z2019-01-29T19:50:10ZDam collapse at Brazilian mine exposes grave safety problems<figure><img src="https://images.theconversation.com/files/255890/original/file-20190128-108355-1gnsmgi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">After 48 hours of frantic effort, Brazilian rescue workers have called off their search for survivors at a collapsed dam in Minas Gerais state.</span> <span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Brazil-Dam-Collapse/a6091160bbce4fdaa15b967086b16891/12/0">AP Photo/Leo Correa</a></span></figcaption></figure><p>Brazilian rescue workers <a href="https://www.npr.org/2019/01/28/689262612/brazil-dam-disaster-60-people-are-dead-with-hundreds-more-missing">continue searching</a> for more than 300 people missing after a dam burst at an iron ore mine over the weekend.</p>
<p>The dam, which ruptured on Jan. 25 close to the Brazilian town of Brumadinho, Minas Gerais state, released a muddy sludge of watery mine waste that engulfed buildings, vehicles and roads. At least 65 people are <a href="https://www.nytimes.com/2019/01/29/world/americas/brazil-dam-arrests.html?action=click&module=Latest&pgtype=Homepage">confirmed dead</a>, and the official toll will rise as the missing are declared dead.</p>
<p>The catastrophe has exposed the dangers of Brazil’s aging dam system. A recent <a href="http://www3.ana.gov.br/portal/ANA/noticias/45-barragens-preocupam-orgaos-fiscalizadores-aponta-relatorio-de-seguranca-de-barragens-elaborado-pela-ana">government report</a> found nearly 1,800 dams in Brazil at high or moderate risk of failure. The figure is all the more stunning because the report’s authors evaluated just one-fifth of Brazil’s nearly 24,000 registered dams. </p>
<h2>Brazil’s unsafe dams</h2>
<p>Dams are an environmentally and economically risky business, as our <a href="https://www.washington.edu/news/2018/01/22/small-hydroelectric-dams-increase-globally-with-little-research-regulations/">global research on hydropower</a> and many <a href="http://www.sciencemag.org/news/2018/01/dam-building-binge-amazon-will-shred-ecosystems-scientists-warn">other studies</a> have shown. </p>
<p>Beyond the loss of human life, the economic damages of a dam breach can <a href="https://www.latimes.com/local/california/la-me-oroville-cost-20180905-story.html">soar into the billions</a>. An entire region’s natural and cultural heritage may be decimated by flooding, and the <a href="https://theconversation.com/amazonian-dirt-roads-are-choking-brazils-tropical-streams-89226">freshwater ecosystems</a> that humans and fish alike rely on compromised.</p>
<p>Yet dozens of countries worldwide, including the United States and Canada, use dams to store water, generate electricity and trap mine waste, or “tailings.” And there’s no easy or cheap way to dismantle or fix aging dams.</p>
<p>The Brumadinho dam collapse is the second dam accident in Brazil involving one of the world’s largest iron ore producers, <a href="https://www.ft.com/content/3f82b07c-2263-11e9-8ce6-5db4543da632">Vale S.A.</a>, in recent years. </p>
<p>In November 2015, two of Vale S.A.’s tailings dams – that is, dams used to contain the watery runoff of nearby mines – also collapsed in Minas Gerais state, where some mountains are made almost entirely of iron ore. </p>
<p>That disaster killed 19 people and spewed over 10 billion gallons of water and mine sediment downstream, contaminating 441 miles of Brazil’s Rio Doce river before reaching the Atlantic Ocean. It is considered the country’s <a href="https://www.sciencedirect.com/science/article/pii/S1679007316301566">worst environmental tragedy ever</a>. </p>
<p>Repairing broken dams in Brazil can cost between US$40,000 and $10 million <a href="http://www3.ana.gov.br/portal/ANA/noticias/45-barragens-preocupam-orgaos-fiscalizadores-aponta-relatorio-de-seguranca-de-barragens-elaborado-pela-ana">per dam</a>, according to Brazil’s national water authority. That is a financial hurdle for a country that has been in deep recession since 2015.</p>
<p>But the social, economic and environmental costs of letting old dams fail may be higher. </p>
<h2>Reducing the risk of dam failure</h2>
<p>The environmental damage is particularly acute when tailings dams collapse, since the large amounts of mining waste they release is highly toxic. </p>
<p>Of the roughly 3,500 tailings dams worldwide, over 300 collapse each year. Two to five of those are <a href="https://www.sciencedirect.com/science/article/pii/S1679007316301566">“major” failures like Brazil’s</a>. </p>
<p>Prompted by this impending danger, <a href="https://www.grida.no/publications/383">the United Nations Environmental Program recently issued recommendations</a> for enhancing tailings dam safety around the world. </p>
<p>Mining companies should strive for zero-failure, it said, warning that “safety attributes should be evaluated separately from economic considerations, and cost should not be the determining factor.” </p>
<p>The report also suggests the creation of a global database of mine sites and tailings storage facilities to better track, and ultimately predict, dam failures.</p>
<p>When old dams have become too costly to maintain or repair, removal is generally considered the best course. Dismantling old dams, as the <a href="http://science.sciencemag.org/content/348/6234/496">United States</a> and <a href="https://www.nature.com/articles/d41586-018-05182-1">Europe</a> are increasingly doing, also restores freshwater ecosystems that have been impacted by decades of damming.</p>
<p>Brazil is <a href="https://onorte.net/minas-do-norte/pesquisa-estuda-a-remo%C3%A7%C3%A3o-de-barragem-no-rio-pandeiros-1.481999">considering decommissioning at least one dam</a>, in the country’s north, due to biodiversity concerns and because it no longer efficiently produces hydroelectricity.</p>
<p>Since the country has federal guidelines regulating the treatment of old dams, the decision about whether to repair, dismantle or continue operating dams is largely left to state officials. Brazilian president Jair Bolsonaro has promised to further <a href="https://www.theguardian.com/world/2019/jan/29/the-river-is-dying-the-vast-ecological-cost-of-brazils-mining-disasters">deregulate the mining industry</a>.</p>
<p>That setup, we fear, leaves the country ill-equipped to deal with its impending dam crisis. </p>
<h2>Technological improvements</h2>
<p>To increase the safety of its mines, Brazil and other countries could look beyond dams for storing iron ore waste.</p>
<p>New technology has created some promising <a href="https://www.sciencedirect.com/science/article/pii/S0959652614004429">alternative solutions</a>.</p>
<p>These include approaches that create a paste of thickened mine tailings, which may then be stored either above ground or in impermeable plastic sheathes below the surface. This method both makes it less likely that the contamination seeps into the ground. It also reduces water use. However, it is expensive.</p>
<p>Constructed and engineered wetlands can also act as treatment systems – a kind of faux natural filter. </p>
<p>Wetlands are affordable to build and operate and require relatively little maintenance. Technology can <a href="https://www.sciencedirect.com/topics/neuroscience/bioreactors">enhance</a> their natural capacity to remove contamination from wastewater. </p>
<p>However, mines must have sufficient available land to support wetlands, and the these systems – like all wetlands – don’t work as efficiently during cold winter months.</p>
<p>Every mine is uniquely situated in terms of its geography, physical setting, environmental context and human population. None of these waste-storage systems alone will make tailings dams obsolete. </p>
<p>But Brazil’s Brumadinho dam collapse is the world’s latest reminder of the risk posed by old and unsafe dams. With national safety guidelines informed by science and stricter enforcement, countries can reduce the chance of a disaster like this happening again.</p><img src="https://counter.theconversation.com/content/110666/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Nearly 1,800 Brazilian dams are at risk of failure, according to the government. Fixing them is expensive – but ignoring aging dams can have considerable social, economic and environmental costs.Julian D. Olden, Professor of Aquatic and Fishery Sciences, University of WashingtonJean Vitule, Ecology Professor, Universidade Federal do Paraná (UFPR)Paulo dos Santos Pompeu, Associate Professor, Federal University of LavrasThiago B. A. Couto, Doctoral candidate, School of Aquatic and Fishery Science, University of WashingtonThiago Vinicius Trento Occhi, Freshwater Ecologist, Universidade Federal do Paraná (UFPR)Licensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/833592017-09-06T20:11:40Z2017-09-06T20:11:40ZHow the ‘tyranny of distance’ affects the Australian economy<p>Technology may have reduced transport and communication costs, giving us instant communication around the world, and turning manufacturing into a network of global supply chains stretching across nations. But my <a href="http://onlinelibrary.wiley.com/doi/10.1111/1475-4932.12368/abstract">recent research with Marie-Claire Robitaille</a> found that Australia’s distance from Europe and the United States still imposes enormous costs on our exports. </p>
<p>We found the impact of distance differs for different exports. Iron ore and gas are twice as sensitive to distance as manufacturing products are. Likewise coal, oil and agricultural products are also very sensitive to distance. </p>
<iframe src="https://datawrapper.dwcdn.net/iu6fk/2/" scrolling="no" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="250"></iframe>
<p>Our modelling shows that Australian resource exports would be 20-30% higher if we were not so far away from markets in Europe and the United States.</p>
<p>There is a silver lining however. Economic growth combined with huge populations in Asia mean the centre of world demand is shifting, which is making Australia less remote. This will boost our exports overall, but it will also change what we export as our agriculture industry becomes more competitive. </p>
<h2>The tyranny of distance</h2>
<p>Unsurprisingly, trade partners who are further apart trade less with each other. The reasons are easy to guess. Iron ore, for example, has a high weight to value ratio (it weighs a lot for its <a href="https://tradingeconomics.com/commodity/iron-ore">price</a>) so transport costs per tonne are high. Likewise gas has high shipping and storage costs. </p>
<p>There may be additional costs associated with communications, loading and engineering constraints around the size of ships. But for whatever reason, technological change and globalisation have not yet levelled the playing field for resource exports as much as they have for manufacturing.</p>
<p>To get a sense of which countries are most disadvantaged by their location, and how large this disadvantage is, we used our model to predict what would happen if all countries were the same distance from each other. </p>
<p>You can see the results in this map: </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/184471/original/file-20170904-17931-b3w4dn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/184471/original/file-20170904-17931-b3w4dn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=350&fit=crop&dpr=1 600w, https://images.theconversation.com/files/184471/original/file-20170904-17931-b3w4dn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=350&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/184471/original/file-20170904-17931-b3w4dn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=350&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/184471/original/file-20170904-17931-b3w4dn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=440&fit=crop&dpr=1 754w, https://images.theconversation.com/files/184471/original/file-20170904-17931-b3w4dn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=440&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/184471/original/file-20170904-17931-b3w4dn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=440&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The percentage change in resource exports for each country if each country was equally far apart.</span>
<span class="attribution"><span class="source">Author provided</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>According to our model, Australia would see an increase in resource exports of 20-30% if distance was not an issue. But some exports would benefit more than others. Australia’s share of the export market in agricultural products would more than double, for example, and gas would triple. Meanwhile Australia’s share of the iron ore market would actually reduce.</p>
<p>The countries most disadvantaged by their location are Chile and New Zealand. Our model predicts they would each see a 50% increase in resource exports if distance was removed from the equation. This is because New Zealand exports a lot of agricultural products and Chile exports a lot of minerals. Both countries are a long way from markets.</p>
<p>Canada and Mexico currently benefit from sharing a border with the United States. Canada exports oil and gas by pipeline, which is cheaper than shipping. Poland and the Czech Republic benefit from their proximity to Western Europe for their coal exports and Algeria, likewise for oil and gas. </p>
<iframe src="https://datawrapper.dwcdn.net/ZROyo/1/" scrolling="no" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="250"></iframe>
<h2>The good news</h2>
<p>It’s not all bad news for Australia. While we are far away from Europe and the United States, we are close to Asia. Right now this gives us an advantage in iron ore exports as China is the biggest importer. </p>
<p>If Brazil, another large iron ore producer, were as close to Asia as Australia, our model predicts it would double its iron ore exports. But our proximity to Asia is only getting more important as the region develops and demand for other products increases.</p>
<p>The results of our research also mean that location is especially important to resource companies. This has important implications for Australia’s <a href="https://theconversation.com/australia-is-missing-out-on-tax-revenue-from-gas-projects-62899">ongoing debate</a> about how to tax resource companies. </p>
<p>Being close to export markets is key to mining companies managing their costs, and this means they don’t have a lot countries to choose from if they were to leave in response to a tax increase. This lack of choice over low cost locations will affect the bargaining power of resource companies when negotiating with the Australian government.</p>
<iframe src="https://datawrapper.dwcdn.net/jvhYn/1/" scrolling="no" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="250"></iframe>
<p><a href="https://www.panmacmillan.com.au/9780732911171/">In the 18th and early 19th centuries</a>, high transport costs threatened the viability of Australian exports and the economy had barely grown over its first hundred years. What saved the colonies was the Victorian gold rush, which brought prospectors and left empty ships that carried wool and wheat back to Europe. </p>
<p><a href="http://onlinelibrary.wiley.com/doi/10.1111/1475-4932.12368/abstract">Our research</a> shows that, despite the massive reductions in transport costs that have ensued, Australian resource sectors are still relatively remote from world markets. But new technologies and economic growth in Asia have the potential to boost Australian resource sectors, just as the gold rush trade ships did in the past.</p><img src="https://counter.theconversation.com/content/83359/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Robertson receives funding from the Australian Research Council and The Department of Foreign Affairs. </span></em></p>New modelling shows that Australia’s distance from Europe and the United States hurts our exports, but this will change as Asia develops.Peter Robertson, Professor, The University of Western AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/688112016-11-17T01:36:08Z2016-11-17T01:36:08ZAustralia can’t bank on an iron ore Trump bump in the long term<p>Trump’s fiscal policies could mean commodities rally in the short term, boosting the Australian government’s budget, but this could be undone in the long term as his trade policies are bad news for base metals and energy commodities.</p>
<p>Global growth and movements in commodity prices have important implications for the Australian economy. A significant component of economic growth and tax receipts derives from the sale of commodities, and so generally rising commodity prices are a positive for Australia. </p>
<p>The recent <a href="http://www.budget.gov.au/2016-17/content/bp1/download/bp1_bs2.pdf">2016-17 Federal Budget assumed</a> an iron ore price of US$55 per tonne (currently US$79) and a thermal coal price of <a href="http://www.budget.gov.au/2015-16/content/myefo/download/02_Part2.pdf">US$52 per tonne</a> (currently US$105). Treasury also forecast that a US$10 per tonne increase in the iron ore price would raise <a href="http://www.budget.gov.au/2016-17/content/bp1/download/bp1.pdf">nominal GDP by US$6.1 billion</a>, and provide an additional US$1.4 billion in tax receipts over the next year. As a result, the government will receive a significant <a href="http://www.theaustralian.com.au/national-affairs/foreign-affairs/us-election-donald-trump-win-worth-10bn-to-budget/news-story/07e047d3231df2830cfa30dc4fa2170d">budget boost</a> in the near term.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/146295/original/image-20161116-13521-1t0yo46.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/146295/original/image-20161116-13521-1t0yo46.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/146295/original/image-20161116-13521-1t0yo46.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=429&fit=crop&dpr=1 600w, https://images.theconversation.com/files/146295/original/image-20161116-13521-1t0yo46.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=429&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/146295/original/image-20161116-13521-1t0yo46.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=429&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/146295/original/image-20161116-13521-1t0yo46.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=539&fit=crop&dpr=1 754w, https://images.theconversation.com/files/146295/original/image-20161116-13521-1t0yo46.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=539&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/146295/original/image-20161116-13521-1t0yo46.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=539&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>As a Donald Trump victory became increasingly likely, investors were initially cautious. Risky assets, such as stocks, were sold and funds flowed into safe havens such as government bonds and gold. Within hours this reaction was reversed as investors considered the broader repercussions of the result. </p>
<p>Gold has proven to be one of the more volatile assets; the Trump victory initially pushing prices almost 5% higher, but falling 9% from a peak a week before. The price of commodities that are typically related to economic output, such as base metals and energy, have surged as markets hope that Trump will enact a fiscal expansion to boost growth. </p>
<p>Copper (nicknamed <a href="http://www.bloomberg.com/news/articles/2016-07-24/dr-copper-signals-brave-new-world-economy-view-as-funds-jump-in">Dr. Copper</a> owing to its status as an economic bellwether), which is used in pipes and wiring, has increased in price by more than 7%. More impressively, iron ore has risen nearly 19%.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/146299/original/image-20161116-13506-1c32d44.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/146299/original/image-20161116-13506-1c32d44.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/146299/original/image-20161116-13506-1c32d44.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=174&fit=crop&dpr=1 600w, https://images.theconversation.com/files/146299/original/image-20161116-13506-1c32d44.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=174&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/146299/original/image-20161116-13506-1c32d44.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=174&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/146299/original/image-20161116-13506-1c32d44.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=218&fit=crop&dpr=1 754w, https://images.theconversation.com/files/146299/original/image-20161116-13506-1c32d44.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=218&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/146299/original/image-20161116-13506-1c32d44.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=218&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>However these gains could be short lived as volatility sets in, in the long term.</p>
<h2>Trump policies and commodities</h2>
<p>Much of the volatility in commodity prices relates to <a href="http://doi.org/10.1111/acfi.12107">uncertainty</a> surrounding what economic polices President-elect Trump will actually seek to implement once he is inaugurated in January 2017. This task is made all the more difficult by the <a href="http://www.economist.com/news/briefing/21706498-dishonesty-politics-nothing-new-manner-which-some-politicians-now-lie-and">lack of honesty</a> during the campaign and <a href="http://www.independent.co.uk/voices/editorials/donald-trump-obamacare-president-affordable-care-the-wall-muslims-u-turn-a7413731.html">backtracking</a> on policies in the days since. Until there is some resolution regarding Trump’s specific plans this market uncertainty will last – likely benefiting <a href="https://theconversation.com/why-gold-will-still-be-a-safe-haven-in-the-next-financial-storm-53363">the gold “safe haven”</a>. </p>
<p>Trump has already signalled that he will bring an end to <a href="https://www.ft.com/content/b5b78c76-a769-11e6-8898-79a99e2a4de6">fiscal restraint</a>. He has vowed to drastically reduce taxes, increasing the federal debt by US$7.2 trillion in the process, and pledged to invest US$550 billion in infrastructure. Both measures are meant to boost growth, and both would be positive for base metal prices. </p>
<p>Trump is also not a believer in climate change and is intent on using <a href="http://www.nytimes.com/2016/05/27/us/politics/donald-trump-global-warming-energy-policy.html?_r=0">more fossil fuels</a>. This could be a positive for commodities such as coal (the price of which has more than doubled since the start of the year) and crude oil. However, the outcome is not clear as the promised removal of environmental regulations may also serve to increase oil & gas drilling in the US and produce a price depressing glut. </p>
<p>Greater demand for coal would clearly be beneficial for Australian coal miners (if not the environment). Although the prospect of lower oil prices would not be good news for operators of major LNG projects still <a href="http://www.abc.net.au/news/2016-07-21/lng-gas-bust-slashes-tax-revenues/7649336">struggling to break even</a>, at least households would gain from lower fuel prices.</p>
<p>The more important factor for long term commodity prices is the risk that a Trump Presidency provides for global trade should his <a href="https://www.theguardian.com/us-news/2016/nov/09/trumps-economic-policies-protectionism-low-taxes-and-coal-mines">policy of protectionism</a> be enacted. If this happens, then global growth will be <a href="https://www.weforum.org/agenda/2015/11/why-openness-to-trade-is-important-for-global-growth/">adversely affected</a> which would be bad news for base metals and energy commodities. </p>
<p>In Australia, this could push the Federal budget further into deficit, reduce economic growth, and increase unemployment (or at least ensure that <a href="https://www.theguardian.com/business/2016/nov/16/australian-wages-growing-at-slowest-rate-on-record-statistics-show">wages continue to stagnate</a>). Clearly, this would not support the Turnbull mantra of jobs and growth. </p>
<p>A “trade war” also could mean geopolitical tensions will increase, particularly between the US and China, and this would be positive for precious metals such as gold. </p>
<p>At the very least, the coming period will provide greater geopolitical uncertainty that may delay corporate investment, hamper economic growth and put pressure on commodity prices.</p><img src="https://counter.theconversation.com/content/68811/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lee Smales does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Even though commodities rallied after the election of Trump, the benefit of this to Australia’s budget could be short lived due to volatility.Lee Smales, Associate Professor, Finance, Curtin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/645422016-09-07T20:09:00Z2016-09-07T20:09:00ZCompany results wrap: is the resources downturn structural or cyclical?<p><em>Companies have finished reporting results for the financial year so it’s time to take stock of how the different business sectors of Australia are fairing. In our <a href="https://theconversation.com/au/topics/company-results-2016-30905">company results wrap series</a> we take a step back from the short-term focus of quarterly profit and loss statements and examine what big picture factors are at play.</em></p>
<hr>
<p>Some well known resource stocks in Australia have reported major losses, including <a href="http://www.bhpbilliton.com/investors/reports/bhp-billiton-results-for-the-year-ended-30-june-2016">US$6.38 billion for BHP Billiton</a> over the past year and <a href="https://www.santos.com/investors/company-reporting/">US$1.1 billion for Santos</a> over the past six months. These losses have largely been driven by lower commodity prices, which in turn is the result of a slowing Chinese economy and weak global growth rates. But the bigger question is whether this most recent downturn is heralding a long term decline in mining activities.</p>
<p>Commentators throughout history have predicted that minerals and energy production would eventually decline because of resource depletion and rising costs. One of the most well-known theories is Peak Oil, <a href="https://www.princeton.edu/hubbert/the-peak.html">originally developed by King Hubbert in the 1950s</a>. This theory explained how many oil fields have a bell-shaped production function from discovery through to exhaustion. This was used to predict the year and level of when the industry would hit maximum supply. Since then this same concept of an inevitable ‘peak’ has been widely applied to other commodities, to describe when global production might reach maximum levels.</p>
<p>However these predictions of maximum production outputs continue to be surpassed. Hubbert’s original projections were that global oil production would peak in 1995 when actual annual production has continued to grow steadily since then <a href="http://www.bgs.ac.uk/mineralsuk/">to be about 55% higher</a>. In fact the slump in oil prices since 2014 have largely been caused by excess supply (together with the effects of lower growth in China and other economies).</p>
<hr>
<p><iframe id="tc-infographic-204" class="tc-infographic" height="1200" src="https://cdn.theconversation.com/infographics/204/0299d869ce9d403532ca9b07a89f26aa0993930d/site/index.html" width="100%" style="border: none" frameborder="0"></iframe></p>
<hr>
<p>Understanding why resource production continues to grow even when depletion must be occurring, provides some hints as to the future of commodities. The first is that mineral commodities tend to be driven by long term cyclical forces, particularly on the supply side. </p>
<p>Higher resource prices, as seen in the 2003-2012 resources boom, drove huge investments into new production, both in Australia and overseas. That growth in supply is now maturing because of the long lead time to get new projects developed, with virtually no new projects approved since 2012. Oversupply causes lower prices and shuts off new projects; there is often a long hiatus until the next boom because of an expanding supply base and the buffering effects of inventories. </p>
<p>The second pointer is that there are a variety of structural factors that shift both supply and demand. The key factors on the supply side are new discoveries and better technologies; these increase potential supply over time. </p>
<p>On the demand side, increased development of renewables and more efficient energy systems can systematically lower fossil fuel demand, while countries typically have lower metals requirements once industrialisation has been achieved. It was the combination of cyclical forces, such as lower economic growth, and structural changes in both supply and demand factors that led to the post-2012 slowdown in commodity prices.</p>
<p><a href="https://theconversation.com/chinas-energy-transition-effects-on-global-climate-and-sustainable-development-30883">Some analysts</a> have focused on the structural changes, arguing for example that greater generation of renewable energy and improved productivity will lower fossil fuel demands permanently. However it is unlikely that structural changes have been enough to date to outweigh increases in demand when the economic cycle moves more strongly into a growth phase. </p>
<p>For example the <a href="http://www.worldenergyoutlook.org/media/weowebsite/2015/WEO2015_Factsheets.pdf">International Energy Agency in 2015 predicted</a> that world energy demand would grow by nearly one-third between 2013 and 2040, and even though renewables will be the fastest growing sector there is still likely to be some growth in coal and oil consumption to meet the balance of needs.</p>
<p>The third pointer is that the major slump in commodity prices over the past three years has focused the minerals sector on cost-cutting and efficiency. This has been more intense than in previous downturns, but the end result is that production costs are much lower than in 2012. </p>
<p>As a result, any rebound in resource prices, as has occurred across some commodities this year, will not have to be as large for operations to be profitable. In essence the cyclical downturn has forced a structural reduction in operating expenses that will make the industry more resilient to future commodity cycles.</p>
<p>This broad summary papers over a number of factors that influence individual commodities; these include government regulation, exploration policies, controls on supply, market access, taxation and support policies, infrastructure access and charges, labour markets and technology drivers. While those factors help to explain movements between sectors, it is the cyclical forces of global demand and global supply that drive prices and returns for Australian companies. </p>
<p>Analysts should also keep in mind that the company accounting systems do not fully reflect all environmental costs; for example responsibilities for mine rehabilitation <a href="https://www.qao.qld.gov.au/reports-parliament/environmental-regulation-resources-and-waste-industries">tends to be underestimated</a> and there is no current system to internalise the spillover costs of greenhouse emissions. Regulatory and accounting systems need to be improved so that all environmental impacts and liabilities are fully recorded, particularly if a cyclical upturn in the future stimulates growth again in the sector.</p><img src="https://counter.theconversation.com/content/64542/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Rolfe currently leads a research project on mine closure with funding from the Australian Coal Association Research Program.</span></em></p>The mining industry is more resilient because of the recent downturn and it will be global supply and demand that will affect these companies in the future.John Rolfe, Professor of Regional Economic Development, School of Business and Law, CQUniversity AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/611532016-06-28T19:32:38Z2016-06-28T19:32:38ZThe next solar revolution could replace fossil fuels in mining<figure><img src="https://images.theconversation.com/files/128256/original/image-20160627-28362-g56jdi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Solar thermal technology uses the sun's heat to generate electricity, or heating. </span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/beyondcoalandgas/9299448518/in/photolist-pqdcVN-favQZx-faL74h-a5SLdC-arg5ur-5c3Rrh-er1F9q-6UMSpa-paKVgJ-faL65Y-paKp53-faL61Y-favQre-pqdbgA-prXW9Z-7Gc6C3-8uQfx1-prXVS6-paK5mv-nmDz5i-bmvHRW-87DkVU-9VANFJ-psdxKm-9zEtUW-cP89QW-njAHLJ-njAPYH-njVmBy-8rZYTq-a9td3k-5bYB7n-97CXU3-paLiJt-aU6CcZ-bQe5Bi-faL6o1-faL6fu-faL6jA-paK58e-93GjSq-faL6bQ-cw35L7-nmDycr-paKpZE-5E7C8W-bBjw6f-fWx4g5-prXWpt-7Tc6rB">Beyond Coal & Gas Image Library/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span></figcaption></figure><p>Recently <a href="http://www.sandfire.com.au/">Sandfire Resources</a>, a gold and copper producer based in Western Australia, announced its new solar power plant will soon start powering its DeGrussa mine. By replacing diesel power, the 10-megawatt power station, with 34,000 panels and lithium storage batteries, is expected to reduce the mine’s carbon emissions by 15%.</p>
<p>This is an exciting development because it realises an important potential that has long been recognised but not exploited. Two of Australia’s greatest resources – <a href="http://www.ga.gov.au/scientific-topics/energy/resurces/other-renewable-energy-resources/solar-energy">solar energy</a> and minerals – are, as luck would have it, both highly concentrated in the same parts of Australia.</p>
<p>In this case, solar energy is being used to power the mine, but there is also great potential for solar energy to be used to convert the minerals to chemicals and metals.</p>
<p>In metal production, most greenhouse gases are generated when carbon (often coal) is used to produce metal from the rocky ore. Some of this carbon is used in the actual chemical reactions, but a large proportion is just providing energy for the process. </p>
<p>Replacing the carbon energy source with renewable or other lower-emission energy has the potential to dramatically lower the greenhouse gases associated with metal production. </p>
<p>For example, in iron production, more than <a href="https://books.google.com.au/books/about/Modern_Blast_Furnace_Ironmaking.html?id=HjWzSogk4-sC">400kg of coke and coal is use to make every tonne of iron</a>. Using renewable energy as a heat source could reduce this carbon input by up to 30%. </p>
<h2>The next revolution</h2>
<p>Currently, Australia’s use of solar energy is largely limited to homes, for hot water and solar-powered electricity. But solar energy has great potential for regional Australia too. </p>
<p>Mines are often isolated. There is typically limited natural gas and electricity supply, and in remote areas energy supply is limited to liquid fossil fuels. This is exactly the potential being exploited by Sandfire Resources at its mine facility 900km north of Perth.</p>
<p><a href="https://publications.csiro.au/rpr/pub?pid=csiro:EP125714">Recent studies</a> by CSIRO have identified the potential to use solar in high-temperature processing of ores such as bauxite, copper and iron ore. This process would use <a href="https://theconversation.com/explainer-what-is-solar-thermal-electricity-51210">concentrated solar thermal (CST) energy</a> as a heat supply. This heat can also be converted to electricity, known as concentrated solar power (CSP). </p>
<p>This is different to the <a href="https://theconversation.com/explainer-what-is-photovoltaic-solar-energy-12924">solar photovoltaic</a> technology used in Sandfire’s solar power plant (and rooftop solar panels), which converts sunlight directly to electricity. </p>
<p><a href="http://onlinelibrary.wiley.com/doi/10.1002/9781118888735.ch1/summary">Solar thermal energy works best at temperatures</a> between 800°C and 1,600°C – which can be achieved with existing technology that concentrates the sun’s heat. This is currently too hot for converting the heat to electricity, which generally operates below 600°C. </p>
<p>But processing minerals can make use of these high temperatures, because the heat is used directly for chemical conversion, rather than first being converted to electricity. </p>
<p>It is this rationale that is driving research, at the University of Adelaide, into producing alumina using concentrated solar energy and, at Swinburne University, into producing iron from ore.</p>
<p>We have tested a range of temperatures and mineral mixes, and have produced iron products similar to commercial-grade iron products. We envisage a solar iron-making plant operating in Western Australia and value-adding to our iron reserves before being shipped overseas.</p>
<p>We expect this could reduce energy and emissions by 20-30% compared to current iron-making processes, by replacing carbon-based fossil fuels with solar energy, although carbon would still be used in the chemical processes. </p>
<p>Whether this is cost-effective will depend on the manufacturer, as the saving in energy and carbon will need to compensate for the high capital cost associated with high solar fluxes.</p>
<p>Concentrated solar energy is still relatively expensive. The Australian Solar Institute estimated in 2012 that the <a href="https://www.cleanenergycouncil.org.au/policy-advocacy/reports.html">cost of electricity from concentrated solar</a> was approximately double the current cost for conventional energy, reflecting largely the high capital cost of solar systems. </p>
<p>This gap can reasonably be expected to close with increases in the scale of operations (lowering manufacturing costs) and in regulatory pressure on conventional power sources.</p>
<p>It may be a way off, but the small step by Sandfire Resources could be the start of a revolution in the Australian minerals industry.</p><img src="https://counter.theconversation.com/content/61153/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Geoffrey Brooks and his co-workers have received funding from ARENA for work into solar thermal processing and Cartwheel Resources for evaluating the potential of solar thermal processing of iron ores.</span></em></p>Mining requires huge amounts of energy – could it be replaced with renewables?Geoffrey Brooks, Pro-Vice Chancellor (Future Manufacturing), Swinburne University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/604082016-06-03T11:22:29Z2016-06-03T11:22:29ZWhy did Tutankhamun have a dagger made from a meteorite?<figure><img src="https://images.theconversation.com/files/125109/original/image-20160603-11598-1l0h6qq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Fallen star sword</span> <span class="attribution"><span class="source">Daniella Comelli/University of Pisa</span></span></figcaption></figure><p>Scientists have long speculated that the ancient Egyptians used metal from meteorites to make iron objects. Now an <a href="http://edition.cnn.com/2016/06/02/africa/king-tut-dagger-meteorite/">analysis of a dagger</a> found in Tutankhamun’s tomb has given us <a href="http://onlinelibrary.wiley.com/doi/10.1111/maps.12664/full">strong evidence</a> that this was the case – and that the Egyptians knew the iron had come from the sky. But why did they use such an unusual source for the metal when there’s plenty of iron here on Earth?</p>
<p>Until recently, we didn’t think that the ancient Egyptians were particularly good at producing iron objects until late in their history, around <a href="http://www.ucl.ac.uk/museums-static/digitalegypt/metal/metalinegypt.html">500 BC</a>. There’s no archaeological evidence for significant iron working anywhere in the Nile Valley. Even the large amounts of iron-rich smelting waste products found in the Delta region could actually have been produced by attempts to make copper. When Tutankhamun died – 800 years earlier – iron was a rarer material than gold.</p>
<p>The most common natural source of metal iron on Earth is iron ores – rocks that contain iron chemically bonded to other elements. These <a href="https://www.jstor.org/stable/499136?seq=1#page_scan_tab_contents">need to be processed</a> by heating them with other materials (smelting) to extract a low-quality form of iron, which is then beaten with hammers to remove impurities. This requires considerable know-how, effort and tools that we have no evidence for in ancient Egypt.</p>
<p>There were <a href="https://books.google.co.uk/books?id=Vj7A9jJrZP0C&pg=PA166&lpg=PA166&dq=ancient+egyptian+iron+ore+pigments&source=bl&ots=zt20tivJJy&sig=Q9o-4ArxAbGaKW8scfMLybideqc&hl=en&sa=X&ved=0ahUKEwim-aC-uYvNAhWI8RQKHXlLC3wQ6AEIIzAB#v=onepage&q=ancient%20egyptian%20iron%20ore%20pigments&f=false">abundant supplies</a> of iron ore in both Egypt and the Sinai peninsula and textual sources indicate that Egyptians were aware of the metal from early in their history. But the ore was mostly used to create pigments for art and make up. One explanation for this may be that the readily accessible iron ores were of poor quality so couldn’t be worked into more useful metal.</p>
<h2>Interstellar source</h2>
<p>But iron doesn’t just come from iron ore. We have evidence that numerous prehistoric societies worldwide which did not have access to ores or knowledge of smelting made use of metallic iron found in <a href="http://www.open.edu/openlearn/science-maths-technology/science/geology/iron-the-sky-meteors-meteorites-and-ancient-culture">occasional meteorites</a>. This precious gift from nature still required shaping into a useful form, often resulting in very basic iron objects, such as small thin metal pieces that could be used as blades or bent into shapes.</p>
<p>If ancient Egyptians knew that iron could be found in meteorites that came from the sky – the place of the gods – it may have been symbolically important to them. As a result, they could have seen all iron as a divine material that wasn’t appropriate to work into a practical, everyday form and that should be reserved only for high-status people.</p>
<p>Meteorites may have even played a more direct role in state religion. For example, the “Benben” stone worshipped in the sun temple of the god Ra at Heliopolis is thought to have possibly <a href="http://www.theguardian.com/world/2001/may/14/humanities.highereducation">been a meteorite</a>. The word “benben” is derived from the verb “weben”, meaning “<a href="http://www.touregypt.net/featurestories/benu.htm">to shine</a>”.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/125110/original/image-20160603-11593-5g0a8k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/125110/original/image-20160603-11593-5g0a8k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=463&fit=crop&dpr=1 600w, https://images.theconversation.com/files/125110/original/image-20160603-11593-5g0a8k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=463&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/125110/original/image-20160603-11593-5g0a8k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=463&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/125110/original/image-20160603-11593-5g0a8k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=582&fit=crop&dpr=1 754w, https://images.theconversation.com/files/125110/original/image-20160603-11593-5g0a8k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=582&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/125110/original/image-20160603-11593-5g0a8k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=582&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The earliest known ancient Egypt iron object: a meteorite iron bead from a prehistoric cemetery.</span>
<span class="attribution"><span class="source">Diane Johnson/The Manchester Museum</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>The ancient language also offers clues as to how how iron was perceived by Egyptians – and that they knew meteorites were a source of the metal. The earliest hieroglyphic word for iron was greatly debated by translators, who frequently confused the words for copper and iron. The word “bi-A” was eventually translated as “iron”, but could easily have referred a range of hard, dense, <a href="http://adsabs.harvard.edu/full/1973Metic...8...91B">iron-like materials</a>.</p>
<p>The word was used in many texts including the funerary Pyramid Texts, early religious writings dating from approximately 2375 BC but likely to have been composed far earlier, carved on the internal walls of <a href="http://www.pyramidtextsonline.com">some pyramids</a>. These textual references to iron connect it with aspects of the sky and with the bones of the dead king who will live for ever as an undying star in the sky.</p>
<p>From the beginning of the 19th Dynasty (approximately 1295 BC) a new hieroglyphic word for iron appeared: “bi-A-n-pt”, which literally translates as “<a href="http://www.ironfromthesky.org/?p=366">iron from the sky</a>”. Why this new word appears in this exact form at this time is unknown but it was later applied to all metallic iron. An obvious explanation for the sudden emergence of the word would be a major impact event or large shower of meteorites.</p>
<p>This would have been witnessed by much of the ancient Egyptian population, leaving little uncertainty as to where exactly the mysterious iron came from. One possible candidate event is the Gebel Kamil meteorite impact in southern Egypt. Although its exact date remains unknown, based upon nearby archaeology we know it occurred within the past <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1945-5100.2011.01222.x/abstract">5000 years</a>.</p>
<h2>Ritual significance</h2>
<p>Iron is also connected to ritual artefacts such as those used in the <a href="http://www.ucl.ac.uk/museums-static/digitalegypt//religion/wpr.html">Opening of the Mouth ceremony</a>, a ritual performed at the entrance of a tomb designed to transform the mummy into a latent being with the potential for life. Later texts, including temple inventories, that reference the equipment used in this ceremony refer to the iron blades used as “<a href="http://anees.as.nyu.edu/docs/IO/2596/RothFingersStars.pdf">the two stars</a>”. It may be that iron was allowed an important role in this ceremony because of the association of iron with meteorites, powerful natural phenomena whose own inherent power might increase the potency of the ritual.</p>
<p>We also know that iron dagger blades were important enough to be mentioned in diplomatic correspondence. The <a href="http://www.reshafim.org.il/ad/egypt/amarnaletters.htm">best-known example</a> is a letter from King Tushratta of Mitanni (today in northern Iraq and Syria) detailing a dowry of his daughter who was to be sent as a bride to Tutankhamun’s grandfather, king Amenhotep III. This letter intriguingly refers to a dagger blade of “habalkinu”, a poorly documented word derived from the ancient Hittite language which some linguists have translated as “steel”.</p>
<p>Only further detailed analysis of the chemistry and microstructure of other artefacts will tell us if meteorites were a common source of the iron that the ancient Egyptians produced. We also need to determine when where and how the smelting of terrestrial iron ores started in Egypt to further guide us in our knowledge on the origins, evolution and specific techniques of ancient Egyptian metalworking technology. By combining this with our knowledge of the cultural importance of iron, we can start to develop a realistic understanding of the true value of this metal in ancient Egypt.</p><img src="https://counter.theconversation.com/content/60408/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Diane Johnson works for the Open University. She receives funding from STFC and is affiliated with the Egypt Exploration Society. She has recently collaborated with Prof PT Nicholson, Cardiff University, Dr J Tyldesley, University of Manchester and Prof MM Grady, Open University, studying the presence and perception of iron in ancient Egypt.</span></em></p>Research has confirmed a knife found in the ancient Egyptian pharaoh’s tomb was made with metal from the heavens.Diane Johnson, Post Doctoral Research Associate, Department of Physical Sciences, The Open UniversityLicensed as Creative Commons – attribution, no derivatives.