The Next Australian Reservation?

The Federal Government’s new gas reservation (which we’re now working with government to finalise) should ensure we’re holding back enough resources, at competitive enough prices, to power us into the future. This will be a vital input into our manufacturing, heavy industry and energy sectors.

But it’s not the end of the AWU’s fight to secure the future of Australia’s heavy industry. We see it as a start of a new chapter: One where local industry and workers finally reap the rewards of our country’s resources and knowhow.

Our export markets

Take a look at most of Australia’s biggest exports – iron ore, coal, LNG, crude metals and oil – and you’ll see a pattern. We ship raw, low-value products overseas and import electronics, vehicles and other finished goods – often built with Aussie materials and in facilities powered by our energy products.

These days, we call it the ‘dig and ship’ economy. But it’s a trend that goes back decades. Australia has always excelled at supplying raw materials. But we let most of the higher-value work sail off for our trade partners to bank. In times of crisis, this approach can also leave us without the basic necessities to keep the country moving.

As future industries begin to take off, our country and the AWU’s industries can position themselves at the centre of a global boom. Critical minerals, future fuels and green metals all require what we already produce, or can produce, in abundance. All will be essential products soon enough. But without local processing, advanced manufacturing will remain offshore. We will continue to wave off thousands of jobs, billions of dollars and our own national security at the dock. 

Australian-made?

Our previous Big Issue looked at fuel security, our limited refining capacity and what we need to shore up local fuel supply. Australia’s agriculture sector currently exports over $5 billion in biofuel feedstocks, like canola and tallow, every year. If we were to refine more of these inputs into locally made fuels, we could deliver $36 billion in value by 2050 – a massive volume of fuel for Australian users, and a massive opportunity for our refineries.

Our nation also has some of the world’s largest reserves of critical minerals, including cobalt, lithium, manganese and tungsten. These are vital to the production of electronics, batteries, solar panels and wind turbines, defence technologies: All the products that have become essential to our way of life. The Albanese Government has established a critical minerals production incentive and other supports to drive investment in local processing and refining.

It has also committed to buying some refined critical minerals in the early-stages of growing markets. But will this be enough to ensure we can claim our place in the critical minerals future?

Critical minerals often go hand-in-hand with our steel and base metals into finished products and technologies. Our smelters and steelworks are critical to a Future Made in Australia, but many have been under massive pressure in recent times. State and federal governments have fronted up with billions of dollars in funding to future-proof these facilities and support their eventual transition to low-carbon production.

Hydrogen is another energy opportunity that, with the right support, can eventually underpin thousands of jobs. Here too, Australia has the resources, the technical workforce and the trade relationships to become a powerhouse. But the best opportunities, and the best jobs, will come from using it to make things here at home.

The federal government has established several initiatives to set up hydrogen projects in Australia, though progress has been slow.

The AWU welcomes governments’ various initiatives in these emerging industries. But to ensure the long-term survival and success of Aussie manufacturing, and to safeguard our security, we need a broader, long-term strategy. Something that goes beyond taxpayer support. We need to shift the way we approach Australian-made as a whole.

Next steps for heavy industry

Without regulation in the national interest, companies will always sell their products to the highest bidder, be they local or foreign. That’s how east coast gas prices skyrocketed and supply diminished as unregulated Queensland LNG exports linked us to the high-priced, volatile international market. This is an approach that puts shareholders and investors first, not Australian jobs or industry. When we look overseas, we see countries like China – global leaders in manufacturing – actually losing money on facilities like critical minerals refineries to produce vehicles, energy and defence tech locally (and ultimately rake in profits).

The AWU is looking deeper into ways governments can support future industries in Australia. For instance, a critical minerals reservation, requiring a portion of ores be refined and manufactured onshore, could further drive local investment and sovereign capability. If we create the right conditions to power advanced manufacturing – the right policies, stable and affordable energy, and a plentiful supply of ores and other inputs – Australia can become the manufacturing powerhouse that has long been promised.

In 2015, when LNG exports started leaving Gladstone, we sounded the alarm on what would happen to gas prices. Nobody listened then, and we’ve paid the price until now. It’s critical that we don’t let history repeat itself – that we get ahead of the next boom and finally put Australians first.