Tomago Aluminium CEO Jerome Dozol speaks with MinterEllison ESG consulting partner, Joao Segorbe

Australia's largest aluminium smelter, located in a major thermal coal-producing region, is set to transition to renewable energy within the next decade. This shift is crucial due to the smelter's significant energy consumption, which plays a key role in baseload grid demand and distribution efficiency. The aluminium sector, a cornerstone of Australia's economy for 70 years, employs over 20,000 people and generates more than A$15 billion annually in export revenue. The success or failure of Tomago, the smelter in question, carries substantial economic, social, and environmental implications. Tomago symbolises Australia's ambitious move towards a future where mining and metals supply are both economically valuable and strategically important.

Read the session summary from IMARC24 below.

Jerome Dozol sees the world map of aluminium smelting as a chart of historically cheap, reliable energy. “Many [smelters] are in Europe, Canada or Australia because in the past there was cheap energy,” he said. “Canada was hydro and here was coal. Tomago is in the Hunter Valley because we are connected with the Bayswater coal-fired power station.”

The CEO of Tomago Aluminium, who says he is “passionate about extending the life of industrial assets”, is late to the Tomago Aluminium party having joined the company in the middle of this year.

Not too late, he hopes.

“For a country like Australia it’s really important to maintain this [historical] competitive advantage, and to have clean and affordable energy,” he said.

“Australia is a bit late … We are a bit behind, not only in terms of [building] these renewable projects, but as well to afford a good energy price.”

The Rio Tinto-controlled Tomago aluminium smelter, opened in 1983, aims to be running on 50% renewable energy by 2030 and 100% renewable by 2035. It uses circa-950 megawatts of power to produce about 600,000 tonnes of aluminium a year.

“We are the biggest consumer of energy in Australia,” Dozol said. “It’s 5% of the NEM [National Energy Market]; 12% in New South Wales.

“This is big. But this is bringing, as well, a lot of opportunity for NSW and for Australia.

“It is probably the biggest opportunity to decarbonise the grid at a large scale.

“We have a big part to play in the future and to stabilise the grid and to help the energy transition in Australia.”

Tomago’s call for renewable energy supplies to help it replace coal-fired power when its Bayswater contract expires in 2028 pitched it into Australia’s energy-transition vortex with other hard-to-abate sectors. Lack of scale, and continuity of supply, means the cost of the country’s renewable energy is high and it is seeing well-documented power price surges as it negotiates the tricky road to “net zero” carbon emissions by 2050.

Dozol said government approval processes for renewable energy projects were too slow, retarding expansion of supply. “For us this is very time sensitive,” he said. Reclassification of aluminium as a critical mineral, instead of a strategic one, would help.

Paul Williams, managing director of mining at WSP in Australia, talks to MinterEllison partner Sebastian Rosholt

Major engineering services firm WSP is experiencing significant technological, economic, and demographic shifts impacting its projects across various markets, including mining and metals. The firm is forming alliances with customers and across industries to enhance idea exchange, foster holistic project design, and improve risk mitigation. The concept of "social performance" has emerged as the new social license, reflecting heightened community expectations beyond basic consultation. Additionally, the increasing complexity of projects is driving a higher demand for skilled personnel, presenting a notable challenge for WSP.

Read the session summary from IMARC24 below.

Paul Williams says a host of technologies coming into mining, visible in project studies and certainly in other industries in which WSP works, are among the factors changing the sector’s personnel needs and the way it collaborates with engineering firms and other service providers.

“Hard contracting models”, or transactional-style deals, were less in favour, WSP’s managing director of mining in Australia said.

“Fixed-type contracts work really well when you know what the solution is going to be and when you're trying to just manage that to time or budget,” Williams said. “But with some of these projects we do not know or don't have the confidence about where we may be heading. So to mitigate that risk we're seeing partnerships form a bigger approach.”

A veteran of more than 25 years in mining and energy worldwide, Williams is seeing numerous important changes in mining but perhaps none more profound than those around its social contracts.

“We are moving towards this thing now called social performance,” he said.

“People have thought about social license as … a licence to build from the community and other stakeholders. What has happened over time is that bare minimum has been moving up and up to what we now know as social performance.

“From a community perspective the questions are not just around what you're about to build [but] what happens 50 years after?

“So when we're taking this thinking to clients and talking about mine closure we are sort of saying, closure starts at the beginning.

“You’ve got to be thinking about the whole-of-life cycle right from the start.

“[And] communities can Google very quickly on topics. They can educate themselves on topics. They can see what others have achieved and what expectations they had. So it’s no longer passable to … consult with communities at the base level. Their expectations have shifted.”

Williams said WSP was seeing in mining project concept studies the employment of new technology, especially related to decarbonisation and automation, and “perhaps new ways of mining … coming into play”.

“Miners are doing things that they weren't doing … [partly because] mining conditions are becoming challenging; the low hanging fruit has kind of been taken,” he said.

“In terms of resourcing this there's a couple of different ways you can look at that. The mining industry is a large industry. There are lots of resources. It's probably not as constrained as some other industries I've seen.

“But at the senior levels we are [seeing] resource constraint and skilled resources is the important bit now.

“To take the lessons learned from the past, to improve productivity, requires skilled resources and that's probably where we are finding the toughest challenge.

“In our tailings team, for example. It’s a highly technical skill and what’s exacerbated [the skills shortage] is the uptake of students at university … where we’ve seen the numbers falling over time.

“It’s been a challenge for consultants, contractors [and] our mining clients as well.

“So what you start getting is a gap developing over time as people retire out of the market and that next level is hard to find and source to make sure we can actually build, deliver and have confidence in the new infrastructure we're about to put in.

“Those are the emerging risks.”

IGO chair Michael Nossal speaks with MinterEllison’s Sebastian Rosholt

Over the past 25 years, Australia has heavily relied on China for significant growth in its resource exports. While the global energy transition has introduced new strategic opportunities, China remains a crucial trade partner, often for reasons that are not widely recognised. Innovation is essential for Australia to maintain its position as a global leader in mining. Forming smart and strategic alliances represents a new frontier for innovative thinking and deal-making.

Read the session summary from IMARC24 below.

IGO’s Michael Nossal says the mid-tier miner’s home state, Western Australia, has seen four or five new lithium mines built in the past 10 years which has ratcheted up its dominance of the world's hard rock lithium supply. At a time when developing new, competitive lithium supply sources is challenging worldwide, this has highlighted the strength of the domestic industry and connected regulatory architecture.

He believes Australia must continue to play to its strengths while it builds competency downstream and walks “the very fine line geopolitically” between major traditional ally, the USA, and major trade partner, China. He also thinks the world might need to get used to China’s dominance of industrial and manufacturing supply chains unless consumers in the West alter habits and mindsets of several lifetimes.

“The last super cycle in metals, which probably ran from 2003-4 to 2011-12, was driven mainly by Chinese economic growth and the broader economic growth in the Asia Pacific,” Nossal said at IMARC 2024.

“I think what's different this time is we are talking about a global phenomenon.

“All the major economies have to decarbonise if we're going to make any impact on our carbon emissions and the flow-on effect to climate change. So even just using the Paris Accord as a benchmark or as a guide that's a massive transition of all senior economies across the globe over the next 25-to-30 years.

“So it's not just China. But China is a great microcosm.

“Focusing on the example of electric vehicles, China has now passed the tipping point where if the consumer goes and buys a car more than 50% of people are buying electric vehicles because they're just cheaper and better vehicles.

“The equivalent electric vehicle is now about five or 10% lower cost than the equivalent ICE [internal combustion engine] vehicle.

“Some of that's due to subsidies but a lot of it is due to the position that they took 15 or 20 years ago to say, we're going to become competitive in electric vehicles, and that’s resulted in the current scale of manufacturing.

“And there's a very positive cycle that drives that.

“China has low energy security in fossil fuels. It has high-density populations that are connected by very fast electric public transport. It has no 100-year consumer identity around vehicles. A lot of Chinese families that buy a car for the first time are first time owners of vehicles, whereas the US has been driving cars for 100 years.

“So the US consumer’s view of what a vehicle is might include that roar of the V8 engine, etc.

“That just doesn't exist in China.

“And they took the policy decisions; they built the manufacturing capacity to get to that price point that’s different. And once you reach that point then it goes around and around.

“Whereas in the US last year about 10 or 12% of vehicles were electric. People are projecting by 2026-27 it could be up to 20% but it's well behind.

“Europe is somewhere in the middle, at about 20% of full EVs and plug-in hybrids and running to probably about 30% in the next couple of years.”
Nossal said while China was far out in front, IMARC had heard that countries such as South Korea and Japan remained determined to be not only competitive but to continue innovating their way to economic growth and prosperity.

That was the lesson for others.

“As Australians we need to work out where we form alliances and who we team with,” Nossal said.

“We've demonstrated we can do the upstream part of the process very well. As we go further downstream we face some real headwinds. Capital costs and operating costs in Australia … are genuine headwinds in terms of trying to move downstream.

“Do I think that we'll see battery manufacturing in Australia anytime soon? It's very hard to see that.

“The capital cost and the expertise required to move all the way down the value chain from spodumene as the raw material of lithium to manufactured battery units [make it] very difficult to see how we would be competitive.

“We've got to be smart and strategic about that.”

MinterEllison Partner, Andrew Corletto talks to Bob Fulker, managing director of Hillgrove Resources

Global copper demand is on the rise, but new primary production is facing challenges due to project delays and declining ore quality at existing mines. Hillgrove Resources, one of Australia's few listed copper producers, has resumed operations at its Kanmantoo mine near Adelaide and is intensifying exploration efforts in the surrounding area. The industry is increasingly focusing on brownfield projects, aiming to utilise historical data and existing infrastructure to boost production more cost-effectively.

Read the session summary from IMARC24 below.

Should copper be on Australia’s critical minerals list? “Without copper, you can't do the rest,” Hillgrove Resources managing director Bob Fulker said at IMARC 2024.

Fulker returned to Adelaide to lead the junior copper producer after six years as chief operating officer at Australian gold heavyweight Evolution Mining and previously performing the COO role at South Australia copper and gold producer OZ Minerals.

Tasked with growing the life and profitability of the Kanmantoo copper mine only 55km from Adelaide, Fulker said copper was being mined in the surrounding Adelaide Hills back in the 1860s and Kanmantoo itself had a plus-50-year back story. Despite its longevity, exploration at depth had been limited and Fulker saw strong prospects for life beyond the mine’s four-year nominal restart schedule.

Hillgrove had achieved annualised production of about 12,000t of copper from its over-sized Kanmantoo ore processing mill and was aiming to ramp that up further.

Fulker said copper at US$4-to-$4.30 a pound was a nice primer for the company and its expanded exploration effort.

Strong demand growth is forecast for the red metal, driven by global urbanisation, electrification and decarbonisation. Meanwhile, new supply is being constrained as project timelines extend and capital intensity grows while major existing mines deal with declining head grades.

“We have a macro-economic situation at the moment where the average grade that we're mining has gone down by 40% since the mid-90s but our desire to use copper is growing,” Fulker said.

“Without copper we cannot get the electricity around the globe. We can't build … for the urbanisation of the population. So from my perspective copper is that underpinning commodity that is required to actually get us to where we need to get to.”

Hillgrove is among a mere handful of listed copper producers in Australia.

Brownfield projects were advantaged by proponents having more historical data and also less regulatory red tape to deal with.

“If we can’t get the approvals with speed there is no point having the best project in the world,” Fulker said.”

“If you look at where we are at with current regulatory systems there are some regulatory systems which actually help the process and there are some which don't necessarily help and are not necessarily there to speed the process up,” “I’m not talking about speeding it up to make poor decisions from an environmental or a social perspective. I'm saying, we have enough data to make an appropriate decision to move forward.“ Different states are different.

Then we have got the federal [government] over the top. Sometimes they are actually in competition with one another.

“When you look around Australia and you see issues occurring which put in question the validity of some decisions that puts the wind up the investment community as well.

“We like stability. We like to know that things are going to be the same today and tomorrow because then we can make good decisions.”

MinterEllison partner Tim Hanmore speaks with the managing director of Heritage Minerals and GreenGold Technology, Malcolm Paterson

The Mount Morgan gold mine in north Queensland, Australia, has a storied history, having produced over 250 tonnes of gold and contributing to paying off Australia's national debt in the late 19th century. Despite its rich past, the mine's waste dumps, potentially containing $4 billion worth of gold, have posed significant environmental and technical challenges for reprocessors. Heritage Minerals aims to overcome these barriers using GreenGold Technology. Additionally, new Queensland laws designed to support prospectors in remediating mine waste sites and turning a profit are expected to aid these efforts.

Read the session summary from IMARC24 below.

Tests of mining’s circa-2025 ESG credentials don’t come much bigger than the Mount Morgan gold-copper mine in north Queensland, Australia, a site with a past so rich it would make for a great Netflix documentary. In fact, all going to plan, it will be part of the streaming service’s content line-up soon.

Malcolm Paterson, head of privately-owned Heritage Minerals and GreenGold Technology, wants to shine a light on the good and bad aspects of Mount Morgan’s remarkable history, generate long-term jobs and training for local townspeople who’ve been disappointed by industry prophets before and try to recover an estimated $4 billion of gold still held at a site that yielded more than 250 tonnes of the yellow metal in its chequered past.

For Paterson, cracking the techno-economic code that has stopped his predecessors at Mount Morgan in their tracks and unlocking environmental and social benefits is hugely compelling.

IMARC 2024 heard Heritage’s bid to redevelop Mount Morgan is a test case for modern technology, private and public partnering around abandoned mines, and new regulation of mine tailings reprocessing projects.

Around the world about 100 gigatonnes of mine waste is being produced each year and the industry’s existing mine waste footprint is estimated at more than 50,000 square kilometres.

The Queensland state budget leaks at least $2 million a year from its long-term exposure to Mount Morgan site remediation costs.

“It's costing them millions of dollars every year to treat the water before it goes into the [Dee] river,” Paterson said. “And there’s no end to it. We're talking about hundreds of years of ongoing treatment.

“Unless you fix the problem it’s there forever. Part of our long-term plan is fixing the site so we can stop that ongoing financial liability.”

MinterEllison partner Tim Hanmore said the Queensland Government’s agreement with Heritage was pivotal to enabling a small company to contemplate and get backing for a regeneration plan at a site with such a huge financial liability hanging over it.

“It’s a pretty innovative approach,” he said. “It’s a bespoke agreement related to redevelopment of an abandoned mine. It's only available at this stage at this one site and it really has helped unlock the potential because it allocates rehabilitation liability in a sensible way.

“It's a forward-looking document that allows the company to proceed with confidence and the state of Queensland knows what it is going to get and what it isn't going to get out of the redevelopment.

“That was a fundamental document that led to the acquisition of the project.

“It’s not something that's been rolled out more broadly but it’s something that could also form part of the case for other projects around the world, [many of which] need a bespoke approach to rehabilitation and liability management.”

Paterson said Mount Morgan would be the definitive test case for GreenGold’s proprietary ReCYN resin-based technology, which is both key to detoxifying water discharge from the site and the economics of reprocessing tailings.

“Cyanide is a dirty word to most people but we decided years ago that it is still the best lixiviant for gold and silver,” he said. “A lot of people have tried alternatives and they've not been very successful. We decided we would accept cyanide as the lixiviant but make it environmentally friendly. We don't let cyanide out of the circuit, we recycle it internally with our technology.

“This allows us to reduce operating costs but there’s always a problem with copper in these ores and that causes high cyanide consumption. So what we do is we recover that copper and the cyanide so our tailings are clean.

“We put clean tailings out to the dam.

“Mount Morgan will provide the demonstration map for this technology.”

Paterson said Heritage was working with government agencies to insert Mount Morgan into classroom history lessons. It was already training young locals to work at its proposed operation. He thinks a new chapter in Mount Morgan’s story will be one the town’s residents will be happy to talk about.

“We are the fifth company in 35 years to try and get this project off the ground,” he said. “We have taken a different approach … and we've got full support from the community. And it's not just the local community it's also the local government and the state government. I think it’s partly because of the story that we tell and the passionate belief we have in that story. It's not just about producing gold and copper.”

Simon Scott, MinterEllison energy and resources industry group leader, speaks on an industry panel addressing mining’s funding, permitting and ESG challenges

The duplication of state and national approval processes for mining and metal projects is causing delays in permitting in Australia. Investors have been unsettled by federal government intervention in the state-approved A$1 billion McPhillamys gold project in New South Wales. The uncertainty surrounding project approval timelines and the location of product qualification is proving disconcerting for mining company investors and can be costly for developers.

Read the session summary from IMARC24 below.

Permitting uncertainty and surprises, two things that are anathema to investors in large critical mineral projects anywhere in the world, continue to create headwinds for companies in Australia as they seek funding and offtake deals.

That was one of the core messages from an IMARC 2024 panel of leaders tasked with assessing barriers to faster project delivery in a country looking to move from a reliance on bulk commodities to many new smaller-scale specialty and strategic mineral and metal enterprises.

The panel featured MinterEllison partner and energy and resources industry leader, Simon Scott and included the CEO of Australian Strategic Materials, an emerging rare earths company, Rowena Smith; gold major Newmont’s safety and sustainability head in Australia, Melissa Winks; AustralianSuper’s Luke Smith; and Stephen Galilee, CEO of the New South Wales Minerals Council.

Smith said while the rigor and regulatory certainty typically associated with mine approvals in Australia was lauded around the world, duplication of state and national agency functions slowed permitting and a certain high-profile gold mine case had spooked some investors.

“I think the opportunities for improvement are speed and that's largely about administrative efficiencies and resourcing, and certainty,” she said.

Federal government intervention in the A$1 billion McPhillamys gold project on cultural heritage grounds, after it was approved for development by the NSW Government, “doesn't just impact that project, it impacts every other project that's out there touting for investment internationally”, Smith said.

“When I say my project is fully approved, they say to me, are you sure? That's very problematic. So getting that certainty around the approvals is critical.”

MinterEllison’s Scott said the McPhillamys decision, made by a declaration under Section 10 of the Aboriginal and Torres Strait Islander Heritage Protection Act 1984, was an example of a “mismatch” between federal and state laws in an area “where there still needs to be the alignment … to get clarity and certainty”.

More broadly, he said, uncertainty about the timing of final project approval decisions was a recurring theme and this highlighted gaps in state regulatory regimes and also human capacity constraints that were talked about in various IMARC forums.

“The question we are forever asked in assisting with project approvals and investments is, how long before dirt can be turned? How long before you get clarity of return? There’s work to be done around the country to improve that. There are certain reviews being undertaken, including Queensland’s Law Reform Commission which is looking at [its mining laws].”

The panel also looked at capacity constraints in other areas impacting project financing and development, including product qualification integral to major processing investment decisions and offtake contracts.

A rapidly evolving downstream processing landscape for many electric vehicle and storage battery inputs, on the back of the unprecedented funding being poured into supply chains in North America, Europe and parts of Asia, means certainty and timing in this area is often also very much up in the air.

Scott said significant government support in Australia for common-user pilot processing facilities in Queensland and Western Australia, enabling mineral project proponents to test processes and generate product samples at reasonable scale, reflected recognition of the transitionary nature of the challenge.

“But the other issue is that some of the parties willing to fund and commit to offtakes are having challenges that they don't yet know where they're going to have their product qualified and at which facility in which country,” he said.

“Trying to negotiate long-term contracts where you're not sure of the destination of the mineral somewhere around the world, what qualification process will apply and how long it will take is challenging to say the least.

“What we're seeing is a lot higher degree of what a lawyer will call risk about the certainty of that contract, because it will have a number of reopeners in it.

“For offtake contracts in the critical minerals sector, particularly those technical minerals, there needs to be a great level of flexibility around contracting.”