Energy demand in Southeast Asia is projected to double by 2050 from 2020 levels, creating plenty of opportunities for Australian mining and METS companies to capitalise on such growth.
Demand for critical minerals and mining equipment, technology and services (METS) needed to electrify and transition the region’s economies presents enormous opportunities for Australian exports to the region.
Australia’s global METS exports were worth $17 billion in 2020, with 51% of total value destined for Southeast Asia. METS trade and investment opportunities for Australian companies are likely to continue to grow, especially given limited in‑market capability in mining technology and services in the region.
Australia has pioneered automation and remote operations through autonomous machinery, emerging software, sensors and data analytics, and connected worker technologies – 60% of the world’s mining computer software is developed in Australia. More than 100 Australian METS companies are active in the Indonesian market alone, which Austrade suggests this could act as a springboard to launch into Southeast Asian mining markets.
Conventional energy, unconventional demand
Conventional energy sources currently make up roughly 77% of Southeast Asia’s energy mix. Energy demand is expected to remain strong over the coming 25 years, with 70% projected to be met by conventional energy sources.
Australia is a long-term energy security partner for Southeast Asia. The International Energy Agency (IEA) anticipates Southeast Asia will play a major role in clean energy supply chains, both as a consumer of low-carbon technologies and as a key supplier of resources.
The Australian Trade and Investment Commission (Austrade) says now is the time to consider investing in the region. Austrade helps grow Australia’s prosperity by delivering quality trade and investment services to businesses, accelerates growth in Australia’s tourism sector and promotes Australia’s education to the world.
Countries across Southeast Asia are actively revising policies and streamlining regulations to attract new foreign investment into their mining industry. These changes align with other fundamentals that make the region an attractive long-term investment destination, including growing, youthful populations, competitive labour and energy, and strong economic growth.
Austrade notes that opportunities in the region are likely to grow at a faster rate than traditional markets. Many Southeast Asian countries have underdeveloped mining industries and untapped reserves but evolving landscapes that are becoming open towards investors and want Australian investment in particular.
Australia’s rich geological reserves, expertise at extracting minerals, and track record as a reliable producer and exporter of resources are also key to our capacity to become a producer of raw and processed critical minerals for the region.
Increased investment from, and collaboration with, partners in the region will help to build diverse, resilient and sustainable global supply chains, and provide opportunities to attract Southeast Asian foreign direct investment (FDI) that supports increased downstream processing.
Opportunities across Asia
There are solid opportunities to invest in mining projects and export METS to Southeast Asia, says Austrade.
There is plenty of support for Australian mining and METS companies that want to invest in or export to Southeast Asia. Austrade has seven offices in Southeast Asia – two in Vietnam (HCMC and Hanoi), Indonesia, Singapore, Malaysia, Thailand, and the Philippines.
The Department of Foreign Affairs and Trade (DFAT) also provides support through embassies in Cambodia and Laos.
Austrade, together with DFAT and Export Finance Australia, has established Investment Deal Teams in the region. The initiative is in support of the Australian Government’s Southeast Asia Economic Strategy to 2024. Cities in Brunei, Cambodia, Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam host team members.
Austrade says its local teams have a deep knowledge of the mining and METS sector in their market.
“The intelligence they bring can help exporters and investors overcome market entry challenges, understand regulations and government involvement, navigate cultural complexities, and connect with customers and partners,” Austrade says.
“Austrade frequently hosts outbound investment missions to Southeast Asia. These missions give delegates an opportunity to hear from industry and government leaders, network with potential customers, visit major sites, and better understand market opportunities.”
Bright future for miners, METS
If Southeast Asia’s regulatory changes genuinely impact the ability of miners to invest and operate in the region, the opportunity for Australian resources and METS organisations will be profound.
“Australian miners and METS companies are well regarded in Southeast Asia. We have a solid record of working in-country with partners to improve efficiency, profitability, safety and environmental impacts. By continuing to engage with Austrade and Investment Deal Teams, there is a lot of success to be had,” Austrade adds.
Australia has the innovative solutions and technical expertise to help Southeast Asia develop its mining industries. There are many examples of companies succeeding through export, and others who invested in the region.
In Indonesia, PROK established a pulley refurbishment services facility in Surabaya, Indonesia in 2023 to service mining companies in Southeast Asia. The mining conveyor systems manufacturer chose Surabaya for its proximity to major mining operations. This allows for local engineering, operational and maintenance services, and emergency support.
When Austin Engineering (ASX:ANG) needed to increase production capacity, it chose Batam in Indonesia. Batam is a heavy engineering island, with plenty of capability and skills that the company was looking for. The investment in Indonesia allowed Austin
In Vietnam, Weir Minerals Australia and Blackstone Minerals (ASX:BSX) have established local facilities. Both are demonstrating their long-term commitment, rather than approach the opportunity as a simple transaction.
Indonesia dominates the global nickel market, ranking far ahead of competitors for both production and reserves. The country is moving up the value chain with producers targeting the electric vehicle (EV) battery market and global brands such as Tesla, Ford, LG, and Hyundai.
The Philippines is the fifth most mineralised country globally. It has an estimated US$1 trillion in untapped reserves of copper, gold, nickel, zinc, and silver. The Philippines is seeking to revitalise its mining industry, and the government has repealed various regulations that stunted mining development.
Meanwhile, Vietnam’s mineral wealth is largely unexploited. It ranks third globally for bauxite reserves, with significant endowments of coal, gold, iron ore and rare earth elements (REEs). Vietnam wants to position itself as an attractive destination for semiconductor and chip manufacturing. It has made significant policy and regulatory changes, including new mineral geology laws expected to take effect in July 2025, to jumpstart its mining and REE industry.
Thailand recently reported over 30 trillion tonnes of mineral reserves. The Department of Mineral Resources has identified several mining zones with significant development potential. Meanwhile, governments in Laos and Cambodia are seeking to advance legislation that promotes investment and encourages sustainable development of mineral industries.
In Thailand, Australian company Alpha Fine Chemicals is planning to construct and operate a nickel sulphate plant in Rayong province to produce 40,000 tonnes per annum of nickel sulphate crystals to supply the lithium-ion battery market.
Write to Adam Orlando at Mining.com.au
Images: Austrade, Austmine, Austin Engineering, AdobeStock & PROK
