This turning point in the nickel industry led to several things, most notably a blame game.
The argument is that China can influence global prices, so it is trying to do so. It has a “monopoly” advantage over the production of these special minerals. In the case of nickel, China and Indonesia (with a lot of Chinese investment in the latter) are flooding the market with excess nickel and crimp competition.
While the surge in nickel supply is true, it is an economic rather than a geopolitical outcome, and the factors are multifaceted and not just China-centric.
First, China has fully exploited and, in some cases, taken over economic opportunities in key mineral production. Let’s take rare earths as an example.
Naturally, when China invests in places like Indonesia, technology develops and Indonesia’s production increases. Innovation makes production cheaper and faster, which ultimately benefits consumers.
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Indonesia’s nickel boom threatens farmers’ livelihoods and the natural environment
Indonesia’s nickel boom threatens farmers’ livelihoods and the natural environment
Importantly, the nickel tipping point revealed Australia’s “economic realities” regarding cooperation with China.
Such a delicate partnership between Australia and China can be difficult to discuss, especially in light of recent bilateral skirmishes and China’s economic manipulation of Australian exports.
But when jobs are at stake, Australia can’t be faulted for being pragmatic about strengthening its own industry, perhaps through a bundling deal of “technology and capital” in mining with China. , which has considerable environmental prerequisites tied to it.
Those concerned about China’s presence in Australia can rest assured that Australia already has the necessary mechanisms in place to manage overseas investment and reduce risks to its national interests. This can be reinforced during contract negotiations.
Fortescue Metals chief executive Andrew Forrest recently said it was difficult to compete with countries such as China and Indonesia, which do not have to “factor in” environmental responsibility.
Australia remains ‘open’ to Chinese investment as bilateral tensions ease
Australia remains ‘open’ to Chinese investment as bilateral tensions ease
So please do that. Rather than viewing competition as a zero-sum game, Australia and China will combine Australia’s environmental track record in mining with China’s green technology skills and ready capital to support a much-needed green sector globally. Not only that, but we should also protect the longevity of our country’s industries. .
Australia and China already work together on green technology mining agreements that preserve jobs, so more can be done. Chinese company Tianqi and US lithium producer Albemarle have both invested in Australia’s Greenbush lithium mine in Western Australia. They in turn ensure the commercial viability of the mine by agreeing to offtake agreements, i.e. by purchasing the minerals they mine.
The ship may have sailed for Australia’s nickel industry, but there’s still time to take care of lithium, rare earths and many other green technology minerals. After all, there should be no battle lines drawn in the global fight against climate change.