It’s a big call, but we’re sure it’s true.
The outlook for the Australian mining industry has never been stronger, and the numbers are clear.
Over the last 12 months, gas prices have risen by around 500 percent.
Coal prices have gone up by 145 per cent.
Uranium and oil prices have increased by 46 and 35 per cent respectively.
Meanwhile, the International Energy Agency’s 2021 Coal Report declared that:
- Coal fired-power generation is set to reach an all-time high in 2021
- Global coal demand may well hit a new-time high in the next two years
- Coal production is set to rise to its highest ever levels in 2022
At the moment, the reality of the dire situation is becoming clear for the Europeans.
In Spain, all public buildings, shopping centres, cinemas, theatres, rail stations and airports are being forced to limit heating to a peak of 19C and air conditioning to a low of 27C at the moment. This comes after Spain shut down all its coal-fired power plants.
According to one estimate, a ten-minute hot shower is costing people about $35 in the Baltic states.
The largest candlemaker in Scandinavia and the Baltics, Estonia’s Hansa Candle AS, has just had to cease operations due to high energy prices. (The irony…people can’t afford to pay their energy bills, and now they can’t even buy candles).
There has been a 1000 per cent rise in sales of electric heaters in Germany as people worry about how they will heat their homes given the country has become reliant on Russian gas since going green.
Meanwhile, our mates in the United Kingdom, have found themselves in the same boat.
As The Australian’s Europe Correspondent, Jacquelin Magnay, wrote last week:
“People in Cornwall have been turning off their freezers, to the alarm of health officials warning of food poisoning. In Newcastle, food charities have been flooded with requests for non-perishable items that don’t require turning on the stove. And in London at my house, the hot water has been off for the past month with showering scheduled for immediately after a sweat-inducing run in the park. A neighbour has given up toast and community groups advise people to vacuum the backs of their fridges to ensure they work as efficiently as possible and to shower every second day. A pre-panic mode has struck households across Britain as a cost-of-living crisis approaches uncharted territory.”
The writing is on the wall.
Coal, gas and oil are here to stay.
Aussie banks, insurance companies and all levels of government aren’t doing enough to take advantage of the opportunity, and the evidence is damning.
Last year, ANZ decided to refuse funding to the Port of Newcastle – the world’s largest coal export port – as part of its climate change policy.
The Commonwealth Bank said those living near a “fossil fuel value chain” like the Hunter or Bowen regions will face increased “risk of indirect employment” and a reduction in “broader economic value, including residential property values…as a result of a significant reduction in global coal demand.”
Reserve Bank of Australia Deputy Governor Guy Debelle declared that “to date, we have only isolated examples of divestment from Australia because of climate risk, but the likelihood of more significant divestment is increasing”.
Shareholder and boardroom activists pressured BHP to sell two Bowen Basin coal mines to a Chinese-owned company so it can meet the company’s target to divest from coal by 2023.
Whitehaven Coal raised up to $1 billion in bonds from Asian debt markets because of a lack of financial support by green Australian banks. (By the way in March this year Whitehaven contributed to the Australia’s Ukraine humanitarian effort by sending 70,000 tonnes of high-quality, high calorific value, low-sulphur thermal coal to the embattled eastern European nation).
And this week, Bank Australia announced it will stop offering loans for new petrol and diesel cars by 2025 as part of an aggressive approach to combat climate change.
The worst part?
Suncorp Bank has dumped coal meaning “there is now not one single major Australian insurer willing to provide insurance for new, climate-wrecking thermal coal projects,” Market Forces campaigner Pablo Brait said.
And the vision the green financiers and insurers at the top end of town seems out of reach.
The latest presentation out of the University of Queensland’s Julius Kruttschnitt Mineral Research Centre by an Associate Professor of Geometallurgy at the Geological Survey of Finland – Professor Simon Michaux – proves our point.
Titled “The quantity of metals required to manufacture just one generation of renewable technology to phase out fossil fuels”, Professor Michaux, concluded:
1. “The quantity of metal required to make just one generation of renewable tech units to replace fossil fuels is much larger than first thought
2. “Current mining production of these metals is not even close to meeting demand
3. “Current reported mineral reserves are also not enough in size”
His evidence is damning.
Take copper for instance.
To make enough wind turbines, solar panels, batteries and electric vehicles to replace fossil fuels for 20 years, the world would need over 4.5 billion tonnes of copper.
Here’s where it gets interesting.
In 2019, the world only mined 24 million tonnes of copper – meaning it would take 189 years to produce enough copper to go net zero at current rates of production.
The same goes for nickel.
The world would need just under one billion tonnes of nickel to make enough renewables to replace fossil fuels. But in 2019, the world only mined 2.4 million tonnes of nickel – meaning it would take 400 years to produce enough to go net zero at current rates of production.
The situation gets even worse when it comes to lithium, cobalt and rare earth metals.
According to Professor Michaux, it would take 9,920 years to produce enough lithium to go net zero at current rates of production.
It would take 1,733 years to produce enough cobalt to go net zero – most of which would come from Chinese-owned, child mines in the Congo.
In fact, for germanium – a very rare but very important element required for renewable energy technologies – it would take over 29,000 years to produce enough of the metal required to go net zero.
Aussie insurers and banks have their work cut out for them.
If insurers and financiers don’t back the critical mining industries that pay the bills in this country, Australia will miss out on what may be the biggest opportunity for our economy in the first half of the 21st century.
It’s time to get to work.