Is Australia a quarry or a foundry?

Activating the Industrial-scale Reconstruction Fund should be used to kick start the next stage of the metals processing supply chain, right here in Australia.

The US Administration’s Inflation Reduction Act (IRA) converts $800bn of tax breaks and subsidies over the next decade to boost high-tech manufacturing throughout the US. That kind of investment would turbocharge any industry, and this is what is required here in Australia. “There has been a renaissance in American manufacturing,” said American Council of Renewable Energy CEO and President Gregory Wetstone in a recent Goldman Sachs report. “I don’t think I have ever seen a law have greater impact on economic development in this country.” Australia’s Climate and Energy Minster Chris Bowen said he believed the US IRA might one day be viewed as significant a moment in the fight against Climate Change as the signing of the Paris Agreement in 2015. In fact, the IRA has put everyone on notice. The beauty of it is that the majority of the incentives go to the consumers. That’s good politics. Here, the Safeguard Mechanism was brought in, which is just an incredibly complex way for industry to buy ‘credits’. But just like the US, the powergrid as it stands cannot keep up with the projected load over the next decade. Australia is also way behind in being able to source the steel, build and deploy the high voltage towers and transmission lines, taking the current to those power-hungry industries. This is somewhere in the vicinity of 10,000 kilometres of extra high-voltage cable and towers. Australia could power 60% of our domestic and manufacturing industry energy through rooftop solar, by saturating the market and pumping it back into the grid. Rewiring Australia’s Saul Griffith wrote that Australian rooftop solar is the cheapest electric power in the world, at three to four cents per kWh after financing. Now, Prime Minister Anthony Albanese said it is “absolutely critical” to have a strong manufacturing industry in Australia. “During the global pandemic, we were reminded of the problems that can arise with global supply chains,” Albanese said. “And the need for us to be more self-reliant and more resilient, the need for us to make more things here, the need for us to have a manufacturing industry here in Australia.” Treasurer Jim Chalmers released the latest Intergenerational Report in late August, warning that Climate Change threatens to devastate the economy over the next 40 years, but that Net Zero reforms offer lucrative opportunities, the same as mentioned above. The last Intergenerational Report by the Coalition hardly mentioned Climate Change. The lucrative opportunities are the Critical Mineral Strategy and the National Reconstruction Fund deals, extracting the critical minerals for batteries, panels, towers and inverters, mined in this country. We sold 55% of the world’s required lithium brine in 2022. Critial minerals are essential to help cover the growing cost of health, NDIS, defence and servicing government debt, which together will rise from a third of GDP to 50% by 2060. We also need to process our own iron ore into steel, here. Half of the cost of steel-making is the energy used in making it. We need to mine and process our ore into steel here, with the cheapest electrical power in the world. It could be more than a $1Tn industry, ten times larger than our fossil fuel industry. Imagine if we could process iron ore into green steel to deliver us home-grown metals to manufacture everything, here. Imagine the turbo-charging this would do for Australian manufacturing. Australia has the largest ore bodies of all the vital elements required for the next Net Zero steps the whole world needs to take. Australia has to stop being tauted as just the “world’s quarry” and it needs to get suited up pronto to be the “world’s foundry”.