PERTH (miningweekly.com) – The net zero transformation will see global demand for some of Australia’s exports decline, while creating new markets and opportunities for its industries, the government’s Intergenerational report found.

Released this week, the report identified five major forces that would shape the Australian economy over the coming decades, including an ageing population, the expanded use of digital and data technology, climate change and the net zero transformation, rising demand for care and support services, and increased geopolitical risk and fragmentation.

The report stated that the mining sector is expected to evolve as the world transitions to net zero and reduces its reliance on the fossil fuels and emissions-intensive commodities Australia exports.

While the global demand for Australian thermal coal is expected to decline as Australia’s trading partners move towards net zero emissions, critical minerals could become key exports for Australia as the world transitions to net zero. Australia has some of the world’s largest reserves of critical minerals such as lithium, cobalt and rare earth elements.

These, in combination with traditional strengths such as iron and aluminium are some of the essential ingredients in global emissions reduction as inputs for electric vehicles, batteries and renewable energy generation technologies, the report stated.

Meanwhile, the manufacturing sector is expected to continue to move into more specialised products and processes consistent with Australia’s comparative advantage. The report noted that if these trends continue, an increasing share of the manufacturing sector’s workers would be higher skilled.

The net zero transformation may also create new manufacturing opportunities.

Furthermore, lower energy costs relative to other countries could provide a foundation for developing industries, particularly those where energy makes up a large proportion of input costs. The report stated that with abundant wind, sun and open spaces Australia could generate energy more cheaply than many countries.

Technological developments were reducing the cost of renewable energy, and additional technological development could lead to exports of energy-intensive green metals, and electricity through undersea cables and hydrogen.

The Minerals Council of Australia (MCA) said this week that there was no doubt Australia was well placed to capitalise on this once-in-a-generation mining boom that has the potential to underpin the nation’s prosperity for decades to come.

“We have the critical minerals, we have the expertise and we have the ingenuity to lead the world through this trillion-dollar mining boom, as the world transitions to a clean energy economy, and develops new technologies,” said MCA CEO Tania Constable.

“But there are no certainties, and no inevitability. The risks of Australia missing the boat are increasing by the day. Our global competitors are already stealing a march, attracting investment, opening up opportunities, and unleashing business to lead the charge.

“Australia has become a more difficult place to do business, and a riskier place to invest because of higher costs, long approval delays, and repeated interventions by governments.

"We may have some of the biggest deposits of critical minerals anywhere in the world, but to develop those opportunities requires enabling policy settings that attract investment and build confidence.

“Otherwise our wealth of critical minerals is at risk of remaining in the ground, as miners pursue options elsewhere, as some of our biggest miners are beginning to foreshadow.

Greater investment uncertainty, exhaustive delays in environmental approvals and the proposed introduction of rigid and costly industrial relations laws are combining to blunt Australia’s ability to fully capitalise on this critical minerals boom,” Constable said.