Dirt-rich nation: Australia’s big test to plug in to the future

Confirmation that the Albanese government is positioning Australia as a global go-to for critical minerals highlights two areas of tension. The first: Australia’s challenge to its biggest trading partner, China, and the threat the regime could pose to the secure supply of these minerals to us and our allies. The second: how far are governments willing to go in mining practices, both at home and abroad, and at whose expense?

Anthony Albanese has a hand to play that differs from nearly every other leader in the world in trade negotiations. The prime minister also has the potential to manage the transition to net zero in a way that minimises disruption to the Australian economy while promoting ethical sourcing, from conflict zones, of minerals required for battery production.

What constitutes a critical mineral? That changes depending on demand and utility. In the medium- to long-term, we are talking about critical and rare earth minerals used for defence tech and the components for lithium-ion batteries (the ones we see in electric vehicles).

Australia is in a unique position. It exports nearly half of the world’s lithium. While it has about 15 per cent of the world’s known cobalt reserves – second only to the Democratic Republic of the Congo – Australia accounts for only 2 per cent of global cobalt production. Seventy per cent of the world’s cobalt, meanwhile, is produced by the conflict-ridden DRC, where Chinese companies control about three-quarters of industrial mines.

There is potential to offset some of those challenges by pivoting to extracting what we do have, importing what we don’t and refining both. But we would need to build our refining capacities, and quickly. We currently export raw materials for China to refine, and we lack the capacity to produce batteries. That means we’re essentially ruling our nation out of being an integral part of the global clean energy transition.

Australia’s commitment to a 62-70 per cent reduction in emissions by 2035 (and net zero by 2050) relies on shifting away from fossil fuel dependence and towards electrified systems which use lithium-ion batteries. Nearly all of these batteries come from overseas sources, which means we’re exporting our lithium and then importing it in another form.

Demand for coal is expected to plummet over the next decade. But the demand for lithium and other critical minerals (for use in lithium-ion batteries) is expected to increase fourfold by 2035, according to industry estimates. It gives us a clear timeline to work with. Australia could shift its focus in a way that balances the value of the revenue from our exports and investment in the potential of renewable-energy storage, while seizing an opportunity to lead in critical mineral diplomacy and insulate our economy from volatile trade relationships. That could also provide a more progressive backdrop if Australia hosts the COP31 climate summit next year, if the supply chain isn’t compromised by human rights violations.

To complicate matters, we export Australian lithium to be used alongside minerals sourced from conflict zones – with no guarantees to ensure the safety of the people extracting them, who are already disproportionately affected by climate change. By engaging in this supply chain, we perpetuate that harm. Essentially, in our pursuit of net zero we are inflicting injury on those least able to manage it.

DRC accounts for 56 per cent of global cobalt reserves, which means it can apply a chokehold on the supply chain at any moment. Its government regularly halts exports to drive up prices. But there is another worry: exploitation of child labourers, unsafe working conditions and domestic conflict are byproducts of the industry in the DRC.

An estimated 40,000 children, some as young as seven, are exposed to horrific working conditions in DRC cobalt mining operations. Rebel groups inflicting violence and terror on local populations capitalise on a lack of regulation, lack of transparency in licensing agreements and inadequate tracing of minerals once they have left the mines. Amnesty International investigated supply chains in 2016 and found cobalt was being smuggled through mines – one of them controlled by the Chinese mineral giant Huayou Cobalt – to be sold and used for batteries in products made by Apple, Samsung and Sony (among others). Multinationals using these kinds of batteries have since agreed to stamp out the practice and impose more control over supply chains. However, none of the agreements are binding. They don’t carry any penalties.

We’ve known about these problems for decades but, beyond a vague agreement with the European Union to declare our intention to work co-operatively on safer mineral extraction, there are no concrete plans to stamp out child exploitation. Unless we can ensure ethical supply, we are complicit and our leadership on climate is hollow.

Congo is in the midst of one of the most violent periods in a decade. The current spike in killings and displacement is severe. Cobalt mining still feeds the conflict’s economics.

On the surface, the effort to circumvent China’s influence in critical mineral dominance on the global market seems logical. In April, amid a trade war, China cut supply to the US of rare earth minerals necessary for defence projects and tech. China has already built a vertically integrated system in Congo where it either owns or controls most of the mines.

The challenge for Australia isn’t just repositioning to meet global demand for battery materials, or wooing allies such as the US and UK. We depend on foreign investment, largely from those same partners, to develop cobalt projects, and we still lack the capacity to refine what we mine.

But the stakes are high if we start competing with China. That would aggravate our biggest trading partner. And it could drive down prices by flooding the market. Perhaps even worse, China could retaliate by no longer refining what we send it.

But this is an important next step in our transition away from coal and towards net zero. It is a contradiction for the Australian government to put up its hand to host COP next year, in partnership with the Pacific, while signing off on deals that allow for unethical mining practices in Congo or elsewhere, including extraction of minerals in Australia to the detriment or objection of local Indigenous populations and culture.

Is the next step in our resource-extraction philosophy grounded in short-term gains or a more just transition? The transition to a cleaner, greener future is sullied by dirty cobalt out of Congo. And without our own refining capacity, we might just have started a trade war with our biggest trading partner.

Brooke Boney is a Gamilaroi woman and journalist. She is studying for a master’s of public policy at the University of Oxford, specialising in energy, global conflict and just transition. She is the author of All of it, a collection of essays.

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