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Australia an unlikely climate change hero

Australia is literally fuelling China’s race to become a green superpower, but there is a potential role for New Zealand as well, writes Thomas Coughlan.

Australia could be on the verge of abandoning its Paris climate targets, joining the United States in a club of two international pariah countries that have flouted the deal. 

But that doesn’t tell the whole story. While Australia is doing precious little to cut its own emissions, the country is behind one of the most ambitious green transitions anywhere on earth: the conversion of the Chinese vehicle fleet to electric.

Under its “Made in China 2025” initiative, the Chinese government wants Chinese manufacturers to control 70 percent of the global market for fully electric vehicles. 

China also has ambitious targets for its domestic market. It has generous subsidies in place for electric vehicles, which were tightened this year to incentivise better, longer-range vehicles. 

Chinese consumers are getting the message. Analysis from IHS Markit, a British data gathering firm, estimates that 850,000 EVs will be sold in China this year. This is anticipated to increase more than sixfold by 2025 when 5.49 million EVs will be sold in China. 

But EV’s aren’t in and of themselves environmentally friendly. The electricity that powers them should be generated in a zero-emissions way, through solar, hydro, wind or other methods. And even then, EVs have a dirty little secret: they still require quite a lot of stuff to be sucked out of the ground.

Unsurprisingly, that’s where Australia comes in.

The country is really rather good at mining rare minerals — and they’re even better at exporting those minerals to resource hungry China.

Modern electric car batteries require a lot of lithium, and Australia has become the world’s largest supplier of the mineral.

Riding the electric car boom, six lithium mines have opened in Western Australia in just 24 months, including Pilgangoora, one of the largest lithium mines anywhere on earth, according to the Financial Times.

UBS bank has forecast that by 2020 Australia will produce half of the world’s lithium. Australia is even looking to control other parts of the value chain. It hopes to refine and manufacture some batteries in Australia, rather than simply exporting ore for batteries that will be made elsewhere. 

Where do we fit in? 

The good news for New Zealand is that lithium is not the only mineral used in manufacturing EV batteries.  

Aluminium, cobalt, and manganese, which are found in New Zealand, are also needed to build the batteries. 

Clean, green... and dependent on child labour; EV batteries use cobalt often mined in the Congo using child labour. Photo: Getty.

New Zealand could stand to gain a great deal from mining cobalt. Currently, much of the world’s cobalt comes from countries like the Democratic Republic of Congo. Lax labour laws in those countries mean manufacturers have been unable to guarantee the material is not being mined by children, leading copper to be dubbed the blood diamond of batteries. But cobalt is rare and valuable enough that most companies mine it anyway. 

This is where New Zealand stands to gain. A report from GNS Science this year identified “high potential” for nickel-cobalt in Tasman-Marlborough and Southland as well as potential for lithium along the West Coast and the Taupō volcanic range.

There’s also immense potential in our oceans. New Zealand has one of the largest Exclusive Economic Zones in the world. A recent paper in Frontiers in Marine Science identified large possible deposits of polymetallic nodules that touch on New Zealand’s economic zone. 

Map showing polymetalic nodule deposits on the fringe of New Zealand's EEZ. Photo: Frontiers in Marien Science

The nodules are small, potato sized rocks that can contain nickel, manganese, copper and cobalt.

Mining the nodules could put New Zealand at an advantage in the race to supply minerals for the burgeoning electric vehicle market. It could also put us at an advantage when it comes to mining deposits outside our territorial waters.

This is likely to become more common if the International Seabed Authority or ISA loosens rules around deep sea mining, as it is widely expected to do. The ISA is a UN body that administers deep sea mining that occurs outside countries’ exclusive economic zones. 

This could be big news for New Zealand.

The United States Geological Survey expects deep sea mining of critical metals to reach 5 percent of global supply by 2030 and 15 percent by 2050.

James Hein, a senior USGS scientist told the Financial Times deep sea mining needed to occur to meet demand for minerals. 

“We need the metals. Or we will have to stop doing practically everything we do — we have to stop the green technology, we have to stop having cell phones, electric cars,” he said.

Destroying the environment to save the environment 

Deep sea mining has the potential to be immensely destructive to the environment. 

Campaigners trying to stop seabed (as distinct from deep sea) mining of iron ore in Taranaki said it would harm fisheries in the region. There’s also merit to considering whether a sensible response to the destruction of one environment is the potential destruction of another. The law of unintended consequences certainly applies to environmentalism.

Firms may find the horse has cobalt-ed 

And there are other concerns too. The market for cobalt could deteriorate, before any mining took place. Elon Musk, the founder of the large American EV and battery manufacturer Tesla, wants the next generation of EV batteries to be cobalt-free, citing ethical concerns about child labour laws.

Mining is also in for a shake up if the world’s central banks continue to hike rates, ending a decade of investment in riskier initiatives as fund managers chased decent yields in a low-inflation environment. 

In New Zealand, however, it’s likely environmental concerns will be paramount and that puts us in a bind. 

Tackling climate change, whilst hanging onto modern comforts like cheap and accessible transportation will continue to force difficult decisions like this on governments and their citizens. 

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