Australia’s latest Intergenerational Report (IGR) has shed a spotlight on the crucial role the country's resources sector will play in the future, as it strategically transitions towards critical minerals in the context of global efforts to combat climate change and achieve net-zero emissions.
The report highlighted the country's unique position to capitalise on the growing demand for critical minerals such as lithium, cobalt and rare earth elements.
These minerals are key ingredients in clean energy technologies like electric vehicles, batteries and renewable energy generation systems.
Amid this, Australia's new Critical Minerals Strategy is spearheading the drive to maximise the nation's benefits across its internationally significant critical minerals endowments.
“World’s largest reserves”
"Australia is in a strong position to benefit with some of the world’s largest reserves of critical minerals such as lithium, cobalt and rare earth elements, which are key inputs to clean energy technologies," the report stated.
The document also highlighted Australia's potential in green energy production, owing to its abundant natural resources.
"With abundant wind, sun and open spaces, Australia also has the potential to generate green energy more cheaply than many countries," it said.
Decline in coal demand
While the mining sector is well-positioned for growth in areas relating to clean energy, there is a projected decline in demand for certain traditional commodities.
Specifically, the report forewarns that the global appetite for Australian thermal coal exports is expected to wane as international trading partners move toward achieving net-zero emissions goals.
"Global demand for Australian thermal coal exports are expected to decline as our trading partners move toward net-zero emissions," the report noted.
Strategic shift to critical minerals
While the report underscores the declining demand for thermal coal, it simultaneously points out Australia's abundant reserves of critical minerals.
Alongside traditional strengths in iron and aluminum, critical minerals will form part of "some of the essential ingredients in global emissions reduction".
Furthermore, the IGR report suggests a strategic shift towards minerals and technologies that align with global sustainability goals may be beneficial for long-term economic resilience.