BHP’s Nickel West operations in WA.
BHP understands Australia’s significant critical minerals opportunity, but it also recognises there are hurdles the local mining sector must overcome.
As BHP president Australia Geraldine Slattery explained at a recent American Chamber of Commerce event, Australia will have to approach its critical minerals future differently to its previous iron ore and coal plunders.
“Unlike Australia’s iron ore and metallurgical coal endowment – which were found in large quantities and close to the surface – our critical mineral resources, particularly nickel and copper, are deeper or more remote or individually smaller in scale,” Slattery said.
“This can make them more complex and more expensive per tonne to produce.
“Take copper. Australia has significant copper resources, and the potential to be a significant copper player.
“The South Australia copper province is a case in point.”
Slattery said that while South Australia boasts its fair share of high-grade copper deposits, they are deep beneath the surface and require underground mining methods.
“(But) in Chile, one of Australia’s key competitors, copper endowments are larger in scale, closer to the surface – allowing for open-pit mining methods,” Slattery said.
“This translates to a higher cost-per-tonne to develop and operate copper mines in Australia, despite our high-grade endowment.”
Australia is also facing competition regarding its nickel future, with Indonesia a premier jurisdiction for the mining and processing of the battery metal.
“Australia has high quality resources, and one of the largest nickel reserves in the world,” Slattery said. “However, we face stiff competition from Indonesia’s large nickel reserves that are more accessible and can be extracted through open-pit methods.
“And Indonesia is highly motivated to aggressively invest in technologies to produce nickel at scale and do so sustainably.”
In discussing this reality, Slattery demonstrated the fact there won’t be the same ease in developing critical mineral deposits in Australia as it was for iron ore and coal.
“Yes, Australia has many large, high-quality resource endowments,” she said. “But we cannot afford to assume that we will have the same degree of comparative advantage in critical minerals as we have enjoyed in iron ore and metallurgical coal.
“As I said before: it all starts with the rocks – the quality and quantity of deposits and the degree of difficulty and cost involved in extracting those deposits drives the investment decision.”
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