Q&A with Namali Mackay, Founder and Managing Director, Critical Minerals Association Australia
Namali Mackay, founder and MD of the Critical Minerals Association Australia, says the nation must first focus on upstream extraction before chasing downstream ambitions. She highlights barriers facing juniors and the need for systematic, mineral‑by‑mineral analysis, and calls on the government to move beyond promotion towards commercially viable strategies that attract investment and reduce risk.
To listen to the interview, click here:
Let’s start with a quick introduction to you and the Critical Minerals Association Australia.
We actually started in the UK, where there’s not a lot in the way of critical minerals, but there is a huge downstream demand in terms of aerospace, defence, automotive, etc. So, the association started there, influencing the UK Government to deliver a critical minerals strategy and think about where to source these minerals from.
From there, we expanded here to Australia, the US, and we have a partnership in Canada. This association is very much focused on having conversations and being aligned on diversifying critical minerals supply chains between allied countries.
Our role here in Australia is to focus just on critical minerals, drawing on our membership base and our industry understanding as a group of experts to give some strategic guidance to the industry about how to build it from scratch and move forward.
What do you see as Australia’s role within the global critical minerals landscape and those broader supply chains?
This is something that we really need to ask ourselves and be honest about — where do we fit? The only way we can really do this is to have a mineral-by-mineral analysis of what we’re good at and what we can practically do.
We don’t have a shortage of resources or good projects here in Australia, but we are struggling to get them out of the ground fast enough. So, we really need to focus on that as a first step. We have to come to terms with the fact that we are a supplier nation. We’re going to be digging and shipping in the first instance, and trying not to run before we can walk.
We need to get these resources out of the ground, extract them, and do that competitively before we can move into further stages down into processing and other parts of the supply chain. I think that’s a realistic first step.
What are the main barriers you’re finding in getting that first step moving?
This is something we’ve been talking a lot about. Even though we have a lot of resources in the ground, we just can’t seem to extract them quickly enough and make them commercially viable. One of the biggest constraints seems to be around juniors, who often have a higher risk profile and are not always able to attract the kind of capital and investment needed to get these projects to a point where international investors can come in and really invest.
There are other barriers around the investment part of it as well, but essentially, we’re up against time and I think that’s creating a lot of pressure as to why we can’t get these projects moving fast enough.
In terms of international investment, especially at the junior end, where is it currently being focused or funnelled?
There is no real pattern here. This is something that we feel has to be addressed as a fundamental issue, and it’s some of the feedback that we’re getting from investors because, obviously, other governments and companies at the other end of the supply chain have a lot of requirements in different commodities across different parts of the supply chain.
They want to know what we can produce quickly and cost-effectively. And what seems to be happening is that there are a scattered number of projects being supported to be able to get to that development stage.
One of the things that we feel is a fundamental piece of work to be done is for Australia to really sit down and look at what minerals we have and which of those minerals can we commercially get out of the ground. Who can it be supplied to? What makes it investment-friendly? Then we can actually say to our investor community, look, these are three of four minerals that will be ready to go, and these are the barriers that they face. It needs to be looked at systematically.
Whose role is it? Let’s look at the role of government versus institutional investors versus associations such as yours.
There is a role for everyone to play in this. We would love to be able to do it, but we’re not funded or resourced well enough to do it at the scale required. So, we really do think this is a role that the government can play. To facilitate that fundamental bit of work that is needed to attract institutional investors, the commercial lending sector, and others. Because one of the barriers is investors just can’t accurately price the risk.
So, that fundamental work being done would facilitate their ability to price risk as well as they can in the minerals and sectors that they’re interested in.
A lot of governments around the world are doing their part with large financing packages and strategic relationships. Is the Australian federal government doing its part to promote the domestic industry? Where are the gaps?
There is obviously a lot of money and attention that the government has directed towards the critical minerals sector over the last couple of years, which has really helped raise the profile of us in Australia as a serious supplier nation.
But we do feel that this has been a lot more ad hoc in the way that it has been applied. There needs to be a systematic piece of work done to look at where our strengths and weaknesses are and to focus on that. That would help the government direct its funding towards where it can best get a bang for its buck and also help crowd in some of that investment.
One of the things that we’re saying is that, up until now, the government has done a lot of promotion, noting that we have a lot of resources here in Australia and that they are needed for the energy transition and the defence needs of other countries.
What we now need to move towards, and what the government really has to move towards, is turning that into a commercially viable proposition.
Looking at investment across the value chain, are there any emerging trends? Is Australia looking to capture that downstream industry, as so many other countries are?
What we have to keep in mind is that Australia is in a very unique situation as a supplier country compared with its competitors, and there are two main things in particular that stand out. One is that we’ve got a long, strong history in bulk commodity mining, but we do not have a specialisation in critical minerals. It’s an infant industry. The specialisation lies outside of Australia and it’s a very different proposition to bulk commodity mining.
The second unique differentiating factor is that we’re one of the only supplier nations that does not have the midstream or downstream either in this country or very close by. If you take Canada, South America, or Africa, they have very easy access to the midstream and downstream.
So, we need to create our own playbook, and we’re doing that through relationships with Japan and Korea, for example, which are much closer to us.
All that said, we do need to focus on the upstream first because we need to have something to supply at the pace and in the quantities that the rest of the world needs. That is the first step.
The other thing about the midstream is that some countries are finding that processing and refining are not profitable in themselves. It’s a very capital-intensive part of the supply chain.
But what makes it doable in other countries is they’ve got the end users — the downstream — to cross-subsidise it. And they’ve got a market at the other end to make it viable and worthwhile.
We recently looked at a piece by PwC that described the low number of critical minerals projects in Australia expected to reach a final investment decision (FID) in the next few years. What do you think is needed to really push these projects forward and enable Australia to fulfill its role as a raw materials provider?
We are supporters of that PwC piece of work, and they have also argued looking at precincts that provide common infrastructure, power, and other things, which would definitely be helpful.
But there are many aspects of why these projects are not getting up fast enough. Again, it goes back to the need to approach this in a systematic way. The regulatory environment in Australia can be quite constraining, according to investors. That covers the lengthiness of permitting, the crippling cost of power, the cost of labour, transport issues, and even expertise. We don’t have the same level of processing, refining, and extracting these specialty minerals as some other countries do.
So, there are a range of factors, but the government can play a constructive role in each of those if they are well understood and the gaps are mapped out systematically.
Where does Australia go from here?
We really advocate that the government has to move from banging the drum about all of our resources to turning them into commercially viable propositions. They have to do some serious groundwork to back that up so that they can really advocate where our strengths are, where they’re lacking, and to find ways to price risk more effectively and plug the gaps. This would bring companies’ risk profiles down so that we can crowd in some investment.
Having a scattergun approach means that we’re never going to get to the fundamentals, and those fundamentals need to be very well analysed and used as the basis for what comes next.
Write to Amy Rotman at Mining.com.au
Main image: Mining.com.au
