Facing global uncertainty: Insights from Ian Satchwell
We’re excited to welcome Ian Satchwell, Adjunct Professor at the Sustainable Minerals Institute, The University of Queensland, as a panellist on Panel Topic 1: Economic and Geopolitical Risks.
In this Q&A, Ian shares his perspectives on the challenges and opportunities facing mining leaders today, from maintaining supply to China, to forging new partnerships for investment. He also explores how the minerals and energy sector can strengthen Australia’s geopolitical role and influence.
Panel Topic 1: Economic and Geopolitical Risks will be available to watch online from 18 June. Subscribe to our TLS mailing list and be the first to know when it’s released!
What are some key insights or perspectives you’re eager to share with the audience in your panel discussion?
Australia is currently facing the biggest and most unpredictable geopolitical and economic risks since the Cold War.
Given the dominance of minerals and energy in our economy (11% GDP) inbound investment (one third) and exports (two thirds), the mining industry must be at the centre of Australia’s responses, including risk management.
Australia, through its resident companies, is also one of the two largest global investors in minerals exploration, mining and processing (Canada is the other, slightly larger global investor). Australia’s position is due to the skills and knowledge built from more than 60 years of modern mining of the world class resource deposits here, applied not only in Australia but in such diverse locations as Mongolia and Mozambique.
Great power competition between the USA and China squeezes Australia in unique ways – China is Australia’s biggest export market and largest source of imports; the US is Australia’s largest inbound and outbound investment partner; and of course, the US is Australia’s most important strategic partner.
With both the US and China acting capriciously in trade and investment, making threats to each other as well as retribution to other nations that might be perceived to favour one over the other, Australia needs to tread carefully but confidently.
What are the biggest challenges you're currently seeing for industry leaders in the face of geopolitical risks, economic uncertainty or shifting trade dynamics?
China is and will remain both the largest customer for Australia’s minerals and a major investor, either through equity or financing. China’s processing capacity for many minerals will help ensure its position.
At the same time, customer companies and nations are seeking to diversify critical minerals supply chains away from China and make them more secure, particularly in the face of market manipulation and other economic coercion.
So far, diversification efforts have had limited success, however, largely because intent has not been matched by investment.
The first challenge for Australian industry leaders, then, is to forge new partnerships for investment, sales and financing that do not involve China or involves China in only a small way, while maintaining supply to China, the biggest market.
Given the market manipulation that’s occurring and the roiling equity markets, that’s the biggest challenge.
The second challenge is how can Australia reinforce and improve its position as a competitive, highly reliable supplier of minerals and energy?
In particular, how can new production facilities be commercially sanctioned and approved by governments faster to satisfy investors, and meet new demand and market windows? What can industry leaders do to reduce costs of construction and operation of mining and especially processing facilities? What can industry leaders do to secure cost-competitive energy supplies
Right now, it seems that the combination of Australian costs and larger incentives available overseas are driving new processing capacity elsewhere.
Third, how do industry leaders position the sector as key to Australia’s strategic influence, both through new supply chains with like-minded nations and through the industry’s formidable global investment footprint?
What do you see as the biggest opportunity for industry leaders to drive change?
Now that the election is out of the way, industry leaders have the opportunity to broaden the discussion beyond the traditional issues of costs, energy and approvals to how the minerals and energy sector can strengthen Australia’s geopolitical role and influence, and reduce risks of global instability on the economy.
Boxing clever, Australian industry and government can work with like-minded nations to expand markets and investment, and Australia’s role as a key supplier of minerals and energy products the world needs. In doing so, the industry and government can strengthen the Australian economy.
Looking ahead, what are some emerging trends or innovations in this space that you're most excited about?
Despite current geopolitical instability, the world is going to need am much-expanded supply and diversity of minerals for the energy transition, new technologies and strategic purposes.
How Australia positions itself as a supplier and investment destination, and as one of the worlds most influential minerals investors, enabled by knowledge and technology, will determine the benefits that accrue to this mining nation.