https://newsletter.mw.creamermedia.com
Building|Energy|Export|Flow|Innovation|Manufacturing|Power|PROJECT|Projects|Refining|supply-chain|Waste|Flow|Manufacturing |Infrastructure|Waste
Building|Energy|Export|Flow|Innovation|Manufacturing|Power|PROJECT|Projects|Refining|supply-chain|Waste|Flow|Manufacturing |Infrastructure|Waste
building|energy|export|flow-company|innovation|manufacturing|power|project|projects|refining|supply chain|waste-company|flow-industry-term|manufacturing-industry-term|infrastructure|waste

Downstream processing could add A$40bn to Aus economy - PwC

24th November 2022

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

Font size: - +

PERTH (miningweekly.com) – Modelling undertaken by advisory firm PwC has shown that value-added industries in the critical minerals sector could contribute more than A$40-billion to the Australian economy by 2025.

The value-added industry, which includes processing, refining and manufacturing, could also deliver as many as 4 500 jobs a year, the modelling shows.

However, while PwC’s modelling finds that Australia would benefit from simply maintaining its current market share in response to much higher world demand as the energy transition gathers pace, the maximum economic gains will flow from Australia building more value-adding capability on its own shores - by processing, refining and manufacturing  rather than exporting unrefined, lower-value materials.

“Australia has a rare opportunity to become the clean energy provider to the world, but rather than simply digging up minerals and shipping overseas, we need to start playing further along the supply chain,” said PwC Australia energy transition director Conrad Mulherin. 

“Building more value-adding capability here would propel our economy to new heights, while creating  high-value, future-facing jobs. This is essential for building greater energy independence and our ability to remain resilient in uncertain geopolitical environments.

“We need to move past talking about the size of the opportunity and start talking about action. The benefits are clear and the time for action is now. We don’t have a day to waste if we are to make the most of our critical minerals endowment and develop the next thriving export industry for Australia.”

PwC used two scenarios during its modelling, the first of which shows the effects of Australia expanding exports of critical minerals in order to maintain market share in response to much higher world demand for these minerals. The model base case showed strong export growth but higher estimates of export demand would increase gross domestic product (GDP) by A$9.7-billion by 2035 and an additional 3 900 jobs, in the peak year, 2032.

PwC noted that maintaining Australia’s market share is already an ambitious base case. In just lithium, nickel, cobalt and graphite, Australia needs new production equivalent to 50 average sized mines.  

Scenario 2 showed the potential impact of value adding in Australia. This simulation showed the hypothetical effect of an expanding critical minerals sector making some local chemicals, metals and manufacturing more internationally competitive.

Should these sectors experience government support and cost reductions sufficient to raise investment by A$3-billion from 2022 to 2035 this would raise GDP by A$11.3-billion and result in an additional 2 500 jobs, in the peak year 2032.

Taken together, this means that opportunities associated with maintaining Australia’s market share in critical minerals and building value-add capacity could add A$40.4-billion in GDP by 2035.

PwC said on Thursday that there were a broad range of stakeholders with a role to play when it came to accelerating the pace and scale at which Australia developed its critical minerals endowment, and took advantage of supply chain opportunities on offer.

“Firstly, capital is critical. An opportunity such as this will require us leveraging traditional infrastructure capital, superannuation funds and international investment. Government funding, even relatively small catalytic funding, kickstarting projects and de-risking innovation, is equally important,” said Mulherin.  

He noted that there was merit in finding a balance between remaining a paragon of free trade and a reliable supplier of minerals to Australia’s allies, and breaking the paradigm of being a ‘dig and ship’ nation. 

Faster approvals and streamlined processes could also truncate project lead times, Mulherin added.

With some lead times for critical minerals taking in excess of 10 years from discovery to production, there is an opportunity to investigate ways in which these development timelines can be truncated, while maintaining or improving existing standards.

“Urgency around energy transition will require governments to re-assess the approach to permits and approvals,” Mulherin said.

Furthermore, with governments in Australia set to be one of the biggest end-users of low emissions technologies, their combined buying power will be vital for driving local production and manufacturing decisions.

“We know that commitments around demand are often more valuable than capital in order to de-risk investment in manufacturing, so linking government policy with local manufacturing through government procurement or local content requirements could help underwrite investment decisions,” Mulherin said.

Edited by Creamer Media Reporter

Comments

Showroom

Flameblock
Flameblock

FlameBlock is a proudly South African company that engineers, manufactures and supplies fire intumescent and retardant products to the fire...

VISIT SHOWROOM 
Werner South Africa Pumps & Equipment (PTY) LTD
Werner South Africa Pumps & Equipment (PTY) LTD

For over 30 years, Werner South Africa Pumps & Equipment (PTY) LTD has been designing, manufacturing, supplying and maintaining specialist...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Magazine round up | 06 December 2024
Magazine round up | 06 December 2024
6th December 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.315 0.406s - 350pq - 2rq
Subscribe Now