INDUSTRY OUTLOOK
DELOITTE AUSTRALIA MINING AND METALS LEADER IAN SANDERS
the lives of Australians, emphasising the material need for mining, now and into the future. “The other point to make in the sales pitch is there is no substitute for these metals – their structural, electrical and thermal properties cannot be duplicated by other materials,” he says. “In selling this message, the industry has been a bit fragmented. I think they need to coordinate a campaign, particularly targeting the younger generation who seem to be the most vocal and often, unfortunately, misinformed about mining and the resources industry in general.” Deloitte Australia’s mining and metals leader Ian Sanders agrees that the industry requires a united effort in advocating for its continued investment and support. “It would be great for the mining industry to join forces and, as a collective, describe what we believe that journey could look like; describe the advantages within the sector; describe the opportunities that exist for employment within the sector; and also, to shout from the rooftops some of the things that the sector is doing,” Sanders says. And those employment opportunities are growing, for better or worse, as a skills shortage looms over the Australian mining industry, predominantly in Western Australia. For this reason, the need to encourage people towards the mining industry is as important as ever. “You’ve only got to look at the number of enrolments in mining engineering courses over the last five years to say that there is a significant need,” Sanders adds. “There are some organisations who are doing good things promoting that and doing a good job, but I think we could do more. “Mining is absolutely critical and getting behind that and telling the good stories that go well in a succinct
TONY LE BAS IS A SPECIALIST ON THE COKING COAL MARKET.
and sophisticated way as a sector could really benefit us.” The good stories Sanders refers to include major leaps in electrification and automation, plus the fact Australia’s mining industry is among the most environmentally friendly in the world. Tony Le Bas also had an extensive career with BHP spanning more than 30 years as a metallurgist-comemarketer for coking coal. He wrote a report on metallurgical coal for the Minerals Council of Australia (MCA) as part of its series, Best in Class: Australia’s Bulk Commodity Giants. He believes coal has copped an unfair share of criticism over his career. “The industry needs to respond to some of the falsehoods that are out there. Coal is definitely demonised at the moment, and I think the industry needs to hit back from time to time and state some of these facts,” Le Bas says. “For example, coking coal will be needed for at least the next few decades and we produce the best in the world. By using our coking coal, blast furnace coke rates around the world are reduced, hence reducing their CO2 emissions. “For those worried about CO2 emissions, they should be advocating for Australian coking coal.” This is like iron ore from Western Australia’s Pilbara region, which is recognised by export markets as the top product they can buy. Brent has more than BHP in common with Le Bas, as he was also an author for the MCA’s Best in Class series – his report focusing on iron ore. Australia’s iron ore lump is the highest quality in the world, going almost directly from mine to blast furnace with minimal processing. In 2019, Australia exported 174 million tonnes of lump ore, which helped to avoid around 30 million tonnes of CO2 emissions. Brent says unprecedented demand
AUSTRALIANMINING
in China, India and South-East Asia won’t let up any time soon, so Australia’s best bet is to optimise its ability to produce iron ore. “At the end of the day, the demand for resources will not diminish. If anything, it will continue to increase as countries around the world continue to develop,” Brent says. “If our environmentally sustainable, low-carbon, Australian supply of these resources is reduced or removed from the equation entirely, the market gap is just filled by the significantly higher carbon emitters in other jurisdictions, which are not as well regulated.” Sanders and Le Bas both agree there is merit in reflecting on the greater good that the mining industry has created for Australians since they began their careers. For Le Bas, at the literal coalface of the industry, he has witnessed decades of improvement in blast furnace technology and coke quality, enabling blast furnaces to operate at high productivity levels.
“From time to time, things haven’t gone right. But I think when we reflect on the decade ending 2020, there’s a lot of things that went really well,” Sanders says. “When you compare mining today to what it was 50 years ago, they’re very different. We’re so innovative, so connected into the communities and focused on things that matter like climate change, innovation, automation and improving operational performance. “These are magnificent traits of a sector that’s doing wonderful things. What I certainly hope continues to happen is all of the goodness significantly and materially outweighs those things that do go wrong from time to time.” All three experts predict a very positive outlook for Australia’s mining industry, owing to more efficient processes, technologies, workplace standards, and hopefully better industry marketing campaigns. As long as there’s a demand for
IT WOULD BE GREAT FOR THE MINING INDUSTRY TO JOIN FORCES AND, AS A COLLECTIVE, DESCRIBE WHAT WE BELIEVE THAT JOURNEY COULD LOOK LIKE; DESCRIBE THE ADVANTAGES WITHIN THE SECTOR; DESCRIBE THE OPPORTUNITIES THAT EXIST FOR EMPLOYMENT WITHIN THE SECTOR; AND ALSO, TO SHOUT FROM THE ROOFTOPS SOME OF THE THINGS THAT THE SECTOR IS DOING.” “Since the early 70s, coke quality has improved due to the availability of high-quality Australian coking coal and consequently blast furnace performance has gone ahead in leaps and bounds,” Le Bas says. “When I started, a lot of people were saying alternative iron-making processes would take over and that blast furnaces would be phased out, but they have proved to be resilient. In fact, they have become increasingly efficient and currently 70 per cent of the world’s steel production relies on the blast furnace. “If you look at overall steel production, analysts are predicting by 2040 there will be more steel produced by electric arc furnaces – which don’t require coking coal. But it is likely that there will still be well over one billion tonnes of steel produced by the blast furnace route each year. So, over the next 20 years, I can still envisage strong demand for coking coal.” Sanders acknowledges that it’s not a perfect industry but appreciates mining’s ability to transform and reinvent itself as technology and regulation evolves.
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AUGUST 2021
people to maintain or improve their standard of living, Brent says there will be demand for Australia’s premium mining resources. “The future is bright for Australia and it cannot be replaced easily. Even with the tensions with China, they cannot replace the Pilbara, and that’s one of the reasons they haven’t acted against iron ore,” Brent says. “There is room to improve environmentally but getting to zero carbon is extremely difficult, if not physically impossible because steel, by definition, has to contain some carbon.” Sanders speculates the coming decade will again be very positive for the mining sector. “I continue to see the image of mining improving. If there were a perception index, we would have seen it improve markedly over the decade to 2020,” Sanders says. “I know in the next decade, we will witness a continued positive and transformative impact with respect to matters such as climate change, innovation, technology, ways of working and safety improvements.” AM