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CMAA Submission to National Reconstruction Fund: consultation paper

The Critical Minerals Association Australia (CMAA) would like to thank its members for contributing to the National Reconstruction Fund: consultation paper.


The submission is now available for download at the Consultation Hub.



 

The National Reconstruction Fund


The Australian Government is establishing the $15 billion National Reconstruction Fund (NRF) to support, diversify and transform Australia's industry and economy to help create secure, well-paid jobs, secure future prosperity, and drive sustainable economic growth. The NRF is a key initiative of the Government’s Future Made in Australia agenda.

The NRF will target projects and investments that help Australia capture new, high-value market opportunities to help our businesses grow and succeed in the economy of today and tomorrow. Investments will help drive economic growth in the regions to ensure a wide range of Australians see tangible benefits.


Investment across the seven priority areas will seek to leverage Australia’s natural and competitive strengths and support the development of strategically important industries and shore up supply chains. These areas encompass a broad range of activities, sectors and outcomes that reflect Australia’s current and emerging advantages:

  • Renewables and low-emission technologies: Pursue commercial opportunities including from:

    • components for windturbine

    • production of batteries and solar panels

    • new livestock feed to reduce methane emissions

    • modernising steel and aluminium

    • hydrogen electrolysers

    • innovative packaging solutions to reduce waste.

  • Medical science: Leverage Australia’s world-leading research to provide essential supplies such as medical devices, personal protective equipment, medicines and vaccines.

  • Transport: Develop capabilities in transport manufacturing and supply chains including for cars, trains and shipbuilding.

  • Value-add in the agriculture, forestry and fisheries sectors: Unlock potential and value add to raw materials in sectors like food processing, textiles, clothing and footwear manufacturing.

  • Value-add in resources: Expand Australia’s mining science technology, and ensure a greater share of raw materials extracted are processed domestically. For example, high-purity alumina from red mud in bauxite processing or lithium processing for batteries.

  • Defence capability: Maximise sourcing of requirements from Australian suppliers employing Australian workers, whether they be technology, infrastructure or skills.

  • Enabling capabilities: Support key enabling capabilities across engineering, data science, software development – including in areas such as fintech, edtech, artificial intelligence, robotics and quantum.

The Government has announced target investment levels for specific priority areas:

  • Up to $3 billion for renewables and low emissions technologies.

  • $1.5 billion for medical manufacturing.

  • $1 billion for value-adding in resources.

  • $1 billion for critical technologies.

  • $1 billion for advanced manufacturing.

  • $500 million for value-adding in:

    • agriculture

    • forestry

    • fisheries

    • food

    • fibre.

 

The Opportunity


Australia has many opportunities for value-add, growth and diversification within the priority areas including:

  • Growth in Australian renewables and low-emission technologies via facilitating transfer of R&D from mining through to production /manufacturing for renewable technologies.

  • Logistics associated with shipbuilding, vehicle (including EV and battery) and train manufacturing and maintenance and their associated supply chains downstream from critical mineral extraction.

  • Expanding Australia’s mining science technology, ensuring that once raw materials are extracted, whenever possible, they are processed domestically especially critical minerals of national importance. Several of our members have recently supported the government with analysis and early insights on options in this area.

 

The Challenge


The structural challenge Australia faces is that two of its largest mineral exports in both volume and dollar values are mostly single use hydrocarbons (coal and LNG). Australia needs to rapidly transition capital flows and wealth-generating activity to a focus on critical minerals for supply to traditional industrial applications and emerging technologies.

To do this, a strategy of bridging the upstream stable, well-resourced mining industry, and the start-up and emerging manufacturers, will assist develop sovereign capability. To onshore advanced manufacturing enterprises delivering flow batteries and battery cells, to markets, Australia will have to become regionally competitive, and produce ESG compliant, but equally price competitive refined critical materials.

However, to build this vital midstream processing and refining capacity while supporting onshore manufacturing the CMAA believes that the NRF should consider investing in hubs or ‘clusters’ which are based on several critical mineral commodities to facilitate optimal supply chain solutions for priority areas, including critical minerals and renewable technologies. These could be informed by the following:

  1. Environmental, social, and governance measures. Across all industries, successful hubs or ‘clusters’ would require companies to demonstrate ESG best practice, and how they are generating net positive impact on local communities.

  2. Impacts on industry and supply chains. Supply chain considerations within each industry must be addressed to understand the impact on regional and local economies. For instance, prioritising industries with the highest value-add potential or those supporting Australia’s defence sector.

  3. Workforce availability and technical expertise. Understanding the opportunities and limitations of workforce resources within the market is imperative to its success.

  4. Available and competitively priced reliable renewable energy. Renewable energy is a key input in green power generation and transmission. The Australian critical minerals sector cannot compete with China on price however; it can only meet OEMs expectations of producing low carbon, responsible critical minerals and materials if the Australian Government invests in alternative energy and infrastructure.

  5. Water and wastewater resources. Guaranteeing water quality and availability are crucial for production facilities and surrounding communities of critical minerals projects. Some critical minerals processes can be water intensive. The Australian Government should invest in water and wastewater R&D and commercialisation and companies should be encouraged to implement innovative solutions to reduce their water usage.

  6. Port and logistics supply. Proximity to inland marine and port infrastructure, preferably with bulk liquid and/or gas infrastructure, is key to domestic and export markets. There must also be efficient transport corridors and elements that enable safe and efficient distribution and appropriate land zoning in the port vicinity to allow for production.

  7. Open-source market research and statistics. Providing clear market analysis, forecasting and production data could potentially attract private investment and identify opportunities or threats within the market.


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