One of the hot topics being discussed at the recent 2023 International Mining and Resources Conference (IMARC), where MinterEllison was the exclusive Legal Partner, was the role of critical minerals in clean energy transition.

The increased global focus on moving towards low-carbon economies will require a greater reliance on low emission and renewable energy technologies. With critical minerals being integral to developing these technologies, increased demand will see greater opportunities for Australia's critical minerals mining sector. In general, it is an exciting prospect for the Australian economy, and one more broadly discussed in a recent article Capitalising on critical minerals: How Australia can achieve its sector ambitions.

However, a peculiar quirk of the current landscape is one of the biggest potential drivers of opportunity for Australia's mining sector in the critical minerals space is not currently captured in the national Critical Minerals Strategy.

That driver is copper.

Global approach to copper as a critical mineral

In its 2022 report on the role of critical minerals in clean energy transition, the International Energy Agency noted that copper is equally as important as aluminium for eight out of ten clean energy technologies – more than any other commodity.

The production of leading low emission technologies such as electric vehicles (EVs), batteries, solar panels and wind turbines are all reliant on copper. Coupled with a broader use outside clean energy technologies (e.g. its heavy use in items integral for basic infrastructure such as electrical wiring, pipes, etc.) and it is clear to see how global demand for the mineral is set to grow exponentially in the future.

In fact, in a recent minerals demand report released by BHP, it was noted the clean energy transition will require scaling up mineral production to the point where up to 140 new copper mines could be required by 2030.

So it is no wonder that the global approach is trending towards recognising its increasing importance, with powerhouses such as China, the European Union (EU), India, Japan, Canada and the US are all formally recognising copper as a critical mineral.

Critical minerals in Australia

Interestingly, despite being home to the second largest copper deposit in the world, according to the 2016 United States Geological Survey (USGS), Australia is yet to recognise copper as a critical mineral as part of its national Critical Minerals Strategy.

A critical mineral is broadly defined by Geoscience Australia as a metallic or non-metallic element that has two characteristics:

• it is essential for the functioning of our modern technologies, economies or national security; and
• there is a risk that its supply chains could be disrupted.

The purpose of the national Critical Minerals Strategy is to promote the growth of the Australian critical minerals sector, expand downstream processing, and help meet future global demand through strategies such as:

• developing strategically important projects relating to critical minerals;
• attracting investment and building international partnerships;
• promoting the establishment of key infrastructure; and
• growing a skilled workforce for the exploration and production of critical minerals.

Each of these strategies require various Government funding and policy initiatives (such as potentially reducing barriers to foreign investment in critical minerals with select international trade partners, etc).

If the Australian Federal Government recognised copper as part of Australia's national Critical Minerals Strategy, this would have both:

• indirect benefits for the copper industry, such as increased public confidence in the future of the sector due to the 'public vote of confidence' displayed by the Federal Government (i.e. that it views copper as an essential part of the future of the Australian economy); and
• direct benefits for the copper industry, by allowing both new and existing players in the industry to benefit from the various funding and policy initiatives provided to the critical minerals sectors under the Critical Minerals Strategy.

While copper is not currently recognised in the Critical Minerals Strategy, the Foreign Investment Review Board (FIRB) appears to consider it as important as other 'critical minerals' such as lithium and graphite as it is listed in a Guidance Note which encourages foreign persons consider investing in certain critical minerals, including copper, to seek foreign investment approval.

While Australia seems to be lagging behind at a national level, it is a different story at State level.

Copper in South Australia

South Australia contains approximately 70% of Australia's economically demonstrated resources of copper (Geoscience Australia 2022), with notable copper mines such as Olympic Dam, Prominent Hill, Carrapateena and Kanmantoo and emerging projects such as Hillside, Kalkaroo and Oak Dam. So it is perhaps unsurprising that the State is leading the push for the recognition of copper as a critical mineral on a national level.

South Australia has always had a strong focus on copper exploration and production and it was the first State in the country to adopt a specific Copper Strategy. Developments this year have seen the State Government place even further importance on the industry.

In June 2023, the South Australian Government committed over $2 million funding to a new 'Copper Taskforce' which will work with South Australian copper producers and explorers to develop a long-term copper production strategy in the State.

Then in August 2023, the South Australian Government declared:

• copper a critical mineral for the purposes of the State Government’s forthcoming Critical Minerals Strategy; and
• its intention to continue to press for copper's inclusion as a critical mineral for the purposes of the Federal Government's Critical Minerals Strategy.

Further details regarding the structure and practical implementation of the 'Copper Taskforce', and the revised version of the State Government's Critical Minerals Strategy, are yet to be released. However, it is a promising sign of things to come for the Australian copper industry – especially within South Australia.

With the scene set for significant and exciting growth in the copper industry in the near future, please contact us to discuss how we can help you position your business to navigate the challenges and changes to come.