1.1 Metals and minerals for a high-tech world
1.1.1 Global perspective
The availability of metal, non-metal and mineral raw materials (referred to as commodities herein), particularly those that underpin high-technology sectors, is important for the ongoing development of many industries. Several countries or groups of countries have undertaken review studies to assess which commodities are critical. A wide range of metals, non-metallic elements and minerals that are used in generally smaller quantities are also crucially important, yet have significant risk of supply. Major commodities such as iron ore, coal, aluminium and copper are very important in a wide range of sectors, however there is a diversity of supply and substantial resources.
Definitions of ‘critical’ are discussed elsewhere in this report, but in essence a commodity is critical if it is both economically important and has high risk of supply disruption. These supply risks originate from four main causes: (1) scarcity of the commodity; (2) diversity and stability of supply; (3) production only as a by-product of other commodities; and (4) level of concentration of commodity production and processing within particular countries or by particular companies. The scarcity of a commodity may be determined by many factors including the geological abundance within the Earth; economics of extraction of the commodity; the extent of substitution of one material by another; and the extent of recycling. Criticality can also change over time.
Current and future demand for the major industrial metallic and mineral commodities as well as the lower volume commodities used in high-tech industries are driven by:
- Manufacturing in industrial economies including US, EU countries and Japan;
- Rapid industrialisation and urbanisation in China, India, Brazil, Russia, Indonesia and a number of other countries, forecast to continue at high rates of growth in many cases;
- Policies and new technologies for reducing emissions of greenhouse gases at both the energy production and energy end-use stages, driven by concerns over environmental issues;
- Development of new technologies for telecommunication and entertainment;
- Concerns over food and water security; and
- Consumer desire for improved fuel efficiency and performance of vehicles.
1.1.2 Australian perspective and potential
Australia is a major exporter but is a relatively small consumer of mineral commodities. Therefore the critical commodities for other countries are not critical at present for Australian industries, with a small number of possible exceptions relating to the agricultural sector (phosphate and potash).
The importance of mineral exports for the Australian economy is underlined by the fact that mineral resources contributed 60.5% of the value of exports of goods and services, and generated 10% of Australia’s GDP in 2011–12 (BREE, 2012). The long term sustainability of the Australian mining industry and consequent revenue is underpinned by the discovery of very large mineral deposits that have long mine lives—historically these discoveries generally were made in areas that were considered greenfields or frontier at the time. Critical commodities are a potential additional exploration target for Australian mining and exploration industries.