Expert interview on securing & financing raw materials in Australia

Germany and other European countries are highly dependent on importing raw materials from other regions in the world. These days crisis-proof supply chains are more important than ever.

Michael Waitz , Director and Team Head Metals & Mining at KfW IPEX-Bank , talks about opportunities in the raw materials sector in Australia.?

Michael, recently you and other colleagues from KfW IPEX-Bank spent some time in Australia and met junior miners, banking partners, law firms, Export Finance Australia , the Australian Trade and Investment Commission (Austrade) and others. What is your impression?

Australia has a strong interest to connect more intensely with Europe as a reliable partner, these days with a special focus on the supply of various raw materials. Luckily, some of the mining projects are at such a stage that they will be further developed in the near future and not just in another 10 years’ time (which is not unusual in mining). One of my takeaways from various meetings is that, from a cultural point of view, Australia is very close to Europe – even though it is very far away geographically.

And the other way around: What role does Australia play for Europe and especially for Germany? Which raw materials in particular are being imported from there?

Today, the export of raw materials from Australia to Europe does not play a big role. Most of the raw materials are exported to China, Japan, South Korea, the US and India. Given the geography this is logical. However, for Europe a view on Australia might become more relevant - Covid, the semiconductor crisis and Russia’s war on Ukraine have illustrated the dependance of European countries on few or even single supply chains which turned out to be vulnerable.

Additionally, the strong push towards renewables and e-mobility creates demand for large volumes of the relevant materials.

In my view, Australia will become an important supplier of ESG-compliant, highly demanded metals, like copper, nickel, cobalt, vanadium, rare earths and others for Europe. More or less the whole periodic system is available, and extraction can be developed or increased.

In the long term, which critical raw materials can Australia provide mainly?

In my view Australia will become a hotspot for the delivery of battery materials, driving the future of transformation up to a point when we reach a reliable level of circular economy. Recycling, by the way, will play an important role also in Australia.

Where does Australia stand when it comes to sustainability in the mining sector?

Regarding ESG aspects Australia is very well positioned. The local standards should easily fulfil the highest international standards, including IFC Performance Standards and Equator Principles with just minor adjustments. From our experience this is one of the critical parts of the due diligence in other parts of the world, and not only we in Europe take this topic very seriously.

For the offtakers of the material ESG compliance is one of the key aspects for looking into Australia despite the fact that there is a premium to be paid on the operational costs in a high-income country like Australia. To some extent this is the price for a steady, diversified and reliable supply chain. Australia is also coming to the picture with a win-win situation for the local situation: in some projects even tailings will be used as a source for critical raw materials and lead to a clean-up effect. The outwashing effect of metals will be eliminated and turned into a source of material at the same time.

What were the main topics at the World Mining Congress 2023 in Brisbane/Queensland last week?

The congress reflected the important creation of the policy framework & governance for the near future as well as critical minerals and supply chain issues, new technologies in mining and processing and, substantially relevant for the decarbonisation, the clean energy supply for the sector. In this context, we had the chance to exchange views and discuss opportunities for the European industry with the Honourable Scott Stewart MP , Minister for Resources, Queensland Government, during a site visit of a solar park. This dialogue should continue with partners from the industry.

You are invited to get in touch with? Michael Waitz ?and talk about securing and financing raw materials for Germany and Europe!