By Perth USAsia Centre on 22 May 2019
Indo-Pacific | Energy and Resources
In the lead up to the 2019 In the Zone Conference
, Jeffrey Wilson examines how governments and businesses in the Indo-Pacific can respond to the critical materials challenge. It analyses the economic, social, environmental and geopolitical challenges facing critical materials, and identifies strategies for developing 21st century value-chains that more effectively meet the needs of both producers and consumers. This report provides government and business leaders with a blueprint to ensure that critical materials contribute to a secure, sustainable and prosperous Indo-Pacific.
- Critical materials will play a key role in the economic future of the Indo-Pacific. Used in high-technology applications across the scientific, digital, clean energy and defence industries, these minerals are essential for the ongoing modernisation and integration of the region’s economies.
- Major security and sustainability challenges mean contemporary value chains are not fit for purpose. Most critical materials markets are characterised by high levels of monopoly, posing political risks for supply security to end-users. Current mining practices also pose major environmental risks, and their production sometimes contributes to social conflicts, forced labour and civil wars.
- Governments, businesses and civil society have begun efforts to reform value chain governance. These initiatives have done a lot to draw attention to the challenges facing contemporary critical materials industries. However, these efforts are yet to develop the new sources of supply required for secure and sustainable value chains.
- Now is the time to invest in developing new critical materials networks. As critical materials will become increasingly important for the region’s future, governments and businesses need to pioneer new models to secure reliable and sustainable forms of supply.
- Australia will be an important partner in these efforts. Its geologic endowment, reliable institutional environment and well-developed relations with key players mean Australia is an ideal critical materials supplier for the Indo-Pacific. While several new projects attest to the opportunities, more is required for Australia to fully realise its potential.
- New strategies will be required to create secure and sustainable critical materials industries. Governments and businesses need to recognise the distinct challenges facing critical materials, adopt a regionally integrated value chain perspective, and build international partnerships that link producers and consumers across the Indo-Pacific.