Australia’s resources future depends on investment, not luck

In parallel, technology, artificial intelligence and automation are predicted to fundamentally shift how we live, innovate and build resilient and growing businesses and economies.

There is much to be optimistic about, but we cannot afford to be complacent. Many nations are recognising the same opportunities and are adjusting investment conditions to stay competitive – Australia must do the same.

As an export orientated economy, global competitiveness and productivity is critical to Australia’s continued success and ability to attract capital.

In the resources sector, over the past decade and more, Australia has enjoyed a comparative advantage with superior ore bodies and access to markets, and we have seen the benefits flow our way.

That same comparative advantage is less evident in the commodities that underpin future demand, particularly at a time of stalled productivity, high input costs such as in labour and energy, and uncertainty in global trade tariffs.

While we cannot hope to have certainty in how or when global settings will stabilise, what we can control is the investments and settings that govern our own productivity, resilience and capability to take opportunities as and when they arise.

This is true for policy settings and for business investment. The fundamentals of competitive and reliable energy availability, labour laws that provide for productive workplaces, strategic enabling infrastructure and efficient permitting whilst maintaining high standards of sustainability. This must be matched with investment in capabilities, in technology, innovation and digitisation. The right settings will attract investment and capital.

For the resources sectors, it starts with the rocks, the age-old minerals and metals that have upheld Australia’s prosperity for generations.

Take humanity’s oldest metal: copper. First discovered around 9000 years ago and used to create weapons and tools, it has shaped history and civilisation through time. As we look forward, copper is integral to economic growth, energy generation, a lower carbon future and increasingly the digitisation of business and societies.

AI is case in point. AI-enabled technologies demand vast amounts of data processing power; every one gigawatt of data centre capacity requires 25,000 tonnes of copper.

Today, electricity consumption for data centres around the world accounts for around 2 per cent of global electricity demand. By 2050, this is predicted to rise to 9 per cent, with copper demand in data centres increasing six-fold.

The energy transition and the AI boom make for a mining boom too.

Australia can be part of this copper boom if we compete.

We have large, high-quality deposits of the minerals the world will need, expertise and capability in extracting them, strong and stable institutions, and good relationships with key markets.

So, there is much to be optimistic for in Australia’s future.

Yet, the competition for investment is very real. There is broad consensus in the demand and future attractiveness of copper. Growth is expected from Latin America, Africa, and Asia-Pacific. We see settings being revised to preferentially attract capital, and reduce the cost and complexity of copper development.

Recent trade moves and countermoves, as countries seek to shore up investment and secure mineral and energy supplies, provide further evidence that the world is competing for investment and playing to win.

Australia is poised to grow and develop its copper endowment, yet its success will rely on having the investment conditions that preferentially attract capital and build productivity. This is as true for copper, as it is for other commodities that compete globally.

Geraldine Slattery is BHP president Australia.