Australia is at risk of over-extracting key transition minerals by relying on overblown demand projections, according to a new report which warns policy steps to encourage responsible and sustainable use of critical minerals, such as a stronger commitment to recycling EV batteries, are being overlooked.

The report, released today by the Jubilee Australia Research Centre, finds the rush to capitalise on staggering predictions about a global transition to EVs and clean power means that Australia could be digging up more critical minerals than necessary.

Recycling minerals in Li-ion EV batteries, which are up to 90% recoverable and are recycled in Australia at a rate of under 10%, could cut demand by half and generate another viable industry, while policies that reduce car dependence and improve mass transit could slash dependence on the batteries by a staggering 71%.

The report, Greenlight or Gaslight? The Transition Minerals Dilemma for Australia, finds that this ‘mine first, ask questions later’ approach could lead to stranded assets and inefficient use of vital resources while causing unnecessary harm to Australia’s environment, water sources and local communities.

It comes as the federal government develops a new Critical Minerals Strategy, with a plan to accelerate the growth of the sector as part of efforts to reach net zero emissions. Resources Minister Madeleine King this month called for Australia to ‘move up the value chain’ by growing its processing capacity as well developing new mining projects, and a recent ministerial roundtable supported the immediate growth of mineral mining as a national priority, seeking to take advantage of predicted global demand levels as the burning of fossil fuels for electricity and transport is gradually phased out amid a transition to clean energy and EVs.

Lead author Dr Luke Fletcher, Executive Director of the Jubilee Australia Research Centre, which is a not-for-profit research organisation that promotes economic justice across the Asia-Pacific, urged the government to pause and reflect so the new mining push did not repeat the mistakes and damage of past mining booms.

“It is critical that we adopt a smarter and more efficient approach as we look to exploit another resource,” Dr Fletcher said.

“While the government’s strategy to make Australia a ‘renewable energy superpower’ will validly speed up the transition from a fossil fuel-based export economy, extracting these key transition minerals will cause significant social and environmental damage if we don’t manage it correctly.

“The unrealistic demand projections driving this trigger-happy mining policy are based on a business-as-usual assumption that does not account for many serious policy alternatives that impact the demand for ‘green’ minerals.”

The International Energy Agency has projected that mineral demand for clean energy technologies will increase four-fold by 2040, while the rate of demand for lithium could outpace supply as early as 2031 – a scarcity narrative that is driving speculative investment in mines for lithium and other transition minerals.

Australia is the world’s largest producer of lithium, a leading producer of cobalt and rare earth elements, and has abundant reserves of manganese, nickel and copper, all of which are key components in the post-carbon era.

As of June 2020, Australia had 22 operating projects across six key transition minerals, as well as 120 projects in the approvals or exploration stage. However, the report finds many policy alternatives to viably reduce mineral demand were comparatively unexplored.

“EV batteries are a clear example where demand for lithium, nickel, cobalt and manganese could all be reduced by a much stronger commitment to recycling, reducing the size and type of EVs available, and developing batteries based on minerals that are more abundant and less damaging to mine, such as potassium, sodium and carbon,” Dr Fletcher said.

The report highlights that:

• In Australia recycling rates for lithium-ion batteries are under 10%, despite potential to recover 90% of lithium-ion materials which could potentially halve demand.
• EV battery recycling programs at rates above 90%, extending battery lifetimes and giving them a ‘second life’ for stationary or grid storage, could reduce primary demand by 2040 for lithium (by 25%), copper (55%), and cobalt and nickel (35%).
• Reducing the size of EV batteries would cut lithium usage by 42%; and policies that reduce car dependence and improve mass transit would reduce dependence by 71%. Policy indifference and a lack of strong economic drivers were the current impediments.
• In 2018 there were around 60,000 abandoned mine sites, while the commitment to rehabilitating sites (restoring land damaged by mining) is underdeveloped.
• Only 8.10% of National Reserve System (NRS) registered land in Australia is classified as Categories I to IV sites, where activities like mining are precluded.
• Around 69% of transition minerals globally are found on or near Indigenous or peasant lands. There is no assessment as yet of what proportion of Australian transition minerals will directly impact Australian Indigenous communities, but it is likely to be very high.

The Jubilee Australia Research Centre is calling for the federal government, as part of its current review, to interrogate demand projections, investigate social and environmental impacts, publish plans to reduce demand, and develop an EV policy that assists the recycling and reuse of batteries.

It further recommends mining companies be responsible for the entire life-cycle of the mine, including clean-up and regeneration of the site, with robust oversight and public transparency.

The report also notes that better legislation is needed to stamp out the destructive behaviour that caused incidents like the Juukan Gorge tragedy, in which Rio Tinto destroyed two rock shelters containing culturally priceless artefacts in order to improve access to a nearby mineral deposit.

“While it makes economic sense to create jobs and wealth for Australians by keeping more of the processing of our critical minerals onshore, we need to make policy choices now that uphold the sustainable extraction of natural resources,” Dr Fletcher said.

“We need to pass cultural heritage legislation, state mining laws need very serious strengthening, and we need a much stronger overall regime for corporate accountability if we want to learn from our past and develop a more efficient and responsible industry.”

Read the full report: Greenlight or Gaslight? The Transition Minerals Dilemma for Australia