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Australia should stop exporting raw materials and do the refining closer to the mines. That would cut the cost of transport dramatically and keep more of the p

Australia should stop exporting raw materials and do the refining closer to the mines. That would cut the cost of transport dramatically and keep more of the profit in Australia. But Australia seems wedded to the idea that it should remain an exporter of raw materials instead of finished goods. And the idea that this can be up and running within less than twelve months sounds rather like wishful thinking to put it charitably.

aussiesnack 4y ago
"Australia", understood as a nationwide polity attending to its aggregate interests, barely exists. The part of it that decides what happens to resources (ie. the resource owners and client governments) doesn't give a crap about value-adding, because it can make scads of cash from exports without having to deal with much in the way of messy labour relationships, etc. There are some signs of change however. The resource industry is currently looked at with more suspicion than I've seen here before. Time will tell.
masklinn 4y ago
> And the idea that this can be up and running within less than twelve months sounds rather like wishful thinking to put it charitably. Why so? Hyzon is apparently already shipping (they just posted about one of their trucks starting commercial work at the port of Houston) so that's available (with the need for modifications e.g. right hand drive and australia-standard carriage), the solar farm already exists, the wind farm is apparently under construction (https://infrastructurepipeline.org/project/macintyre-wind-farm https://infrastructurepipeline.org/project/macintyre-wind-fa...), and as befits of their name "plug" apparently delivers modular plug-and-run electrolyser, and they have running projects (https://hydrogen-central.com/plug-1mw-electrolyzer-commissioned-worlds-first-floating-offshore-green-hydrogen-production-site/ https://hydrogen-central.com/plug-1mw-electrolyzer-commissio...). So it all looks at least realistic, though obviously the proof's in the pudding.
crabmusket 4y ago
Australia remains a lucky country run by second-rate people who've profited immensely from its luck.
jussy 4y ago
It's more profitable for companies in Oz to export some raw materials currently. It really does depend on the material though, Aluminium as an example Oz exports a fair bit of that as well as bauxite. Hydrogen somewhat is processed at least before export.
Panzer04 4y ago
Economically speaking, why bother producing the steel in Australia? The vast majority of it is mined nowhere near the normal population centres, so there’s not really any convenience in refining it on site. By the time you’ve gotten it to a port, you aren’t going to be losing that much transporting the ore rather than steel. I think you also need coal, which iirc is by and large not located close to the iron ore resources. Additionally, I’d bet the value-add (profitwise) from steel refining is not very high - it would be a competitive industry, since anyone can spin up a refinery and import the steel. The restriction is the iron supply, so that’s where the price impact hits if there’s a shortage. It’s all a matter of economics, and it appears that it’s not very profitable to produce steel in Australia - so we don’t.
- wizofaus 4y ago
  5.5 million tonnes of it annually counts as a bit more "we don't [produce steel]" - even if it's a drop in the bucket to the 1100 million tonnes China produces. Apparently we're about the 28th largest producer worldwide (which obviously suggests we're one of the lowest producing OECD nations).
ThrustVectoring 4y ago
>keep more of the profit in Australia It really wouldn't. China has decided to turn an absolutely massive amount of iron ore into steel for non-economic reasons, which means that the profits to be made are largely in supplying them with raw materials.
- TheHappyOddish 4y ago
  This is very accurate. I used to work with a steel distributor, and it's not just cheaper to ship to China, refine and ship back, it's significantly cheaper than refining on shore.
senectus1 4y ago
its being worked on. but this sort of industrial upscaling isn't fast or easy.
alvah 4y ago
“Australia should stop exporting raw materials and do the refining closer to the mines.” High cost of energy / high cost of labour / history of problematic industrial relations all conspire against this worthy goal.
- FridgeSeal 4y ago
  > high cost of labour / history of problematic industrial relations High “cost” would be much less of an issue, if we actually taxed these resource companies appropriately. At the moment they’re basically allowed to waltz out of the country with materials en masse, for relatively no cost. The one time we suggested that maybe they should be paying fairly, they screeched loudly and ran an enormous media campaign against that party.
  - alvah 4y ago
    That’s a naive understanding of 2 topics in 1 post. Structural high labour costs can’t be negated by a CO2 tax - how could they? The Gillard / Ken Henry CO2 tax proposals would have had a devastating impact on employment in both mining and oil & gas. While many ideologues would have cheered this at the time, both industries were and are essential to modern industrial economies. There are many examples all over the world (and in Econ 101 textbooks) of what happens after you increase taxes on an activity or product. While there was a media campaign, it’s disingenuous to suggest that’s the only thing that stopped the tax (and got rid of one of many terrible governments we’ve had in modern-day Australia).

aussiesnack 4y ago

"Australia", understood as a nationwide polity attending to its aggregate interests, barely exists. The part of it that decides what happens to resources (ie. the resource owners and client governments) doesn't give a crap about value-adding, because it can make scads of cash from exports without having to deal with much in the way of messy labour relationships, etc. There are some signs of change however. The resource industry is currently looked at with more suspicion than I've seen here before. Time will tell.

masklinn 4y ago

> And the idea that this can be up and running within less than twelve months sounds rather like wishful thinking to put it charitably. Why so? Hyzon is apparently already shipping (they just posted about one of their trucks starting commercial work at the port of Houston) so that's available (with the need for modifications e.g. right hand drive and australia-standard carriage), the solar farm already exists, the wind farm is apparently under construction (https://infrastructurepipeline.org/project/macintyre-wind-farm https://infrastructurepipeline.org/project/macintyre-wind-fa...), and as befits of their name "plug" apparently delivers modular plug-and-run electrolyser, and they have running projects (https://hydrogen-central.com/plug-1mw-electrolyzer-commissioned-worlds-first-floating-offshore-green-hydrogen-production-site/ https://hydrogen-central.com/plug-1mw-electrolyzer-commissio...). So it all looks at least realistic, though obviously the proof's in the pudding.

crabmusket 4y ago

Australia remains a lucky country run by second-rate people who've profited immensely from its luck.

jussy 4y ago

It's more profitable for companies in Oz to export some raw materials currently. It really does depend on the material though, Aluminium as an example Oz exports a fair bit of that as well as bauxite. Hydrogen somewhat is processed at least before export.

Panzer04 4y ago

Economically speaking, why bother producing the steel in Australia? The vast majority of it is mined nowhere near the normal population centres, so there’s not really any convenience in refining it on site. By the time you’ve gotten it to a port, you aren’t going to be losing that much transporting the ore rather than steel. I think you also need coal, which iirc is by and large not located close to the iron ore resources. Additionally, I’d bet the value-add (profitwise) from steel refining is not very high - it would be a competitive industry, since anyone can spin up a refinery and import the steel. The restriction is the iron supply, so that’s where the price impact hits if there’s a shortage. It’s all a matter of economics, and it appears that it’s not very profitable to produce steel in Australia - so we don’t.

wizofaus 4y ago
5.5 million tonnes of it annually counts as a bit more "we don't [produce steel]" - even if it's a drop in the bucket to the 1100 million tonnes China produces. Apparently we're about the 28th largest producer worldwide (which obviously suggests we're one of the lowest producing OECD nations).

ThrustVectoring 4y ago

>keep more of the profit in Australia It really wouldn't. China has decided to turn an absolutely massive amount of iron ore into steel for non-economic reasons, which means that the profits to be made are largely in supplying them with raw materials.

TheHappyOddish 4y ago
This is very accurate. I used to work with a steel distributor, and it's not just cheaper to ship to China, refine and ship back, it's significantly cheaper than refining on shore.

senectus1 4y ago

its being worked on. but this sort of industrial upscaling isn't fast or easy.

alvah 4y ago

“Australia should stop exporting raw materials and do the refining closer to the mines.” High cost of energy / high cost of labour / history of problematic industrial relations all conspire against this worthy goal.

FridgeSeal 4y ago
> high cost of labour / history of problematic industrial relations High “cost” would be much less of an issue, if we actually taxed these resource companies appropriately. At the moment they’re basically allowed to waltz out of the country with materials en masse, for relatively no cost. The one time we suggested that maybe they should be paying fairly, they screeched loudly and ran an enormous media campaign against that party.
- alvah 4y ago
  That’s a naive understanding of 2 topics in 1 post. Structural high labour costs can’t be negated by a CO2 tax - how could they? The Gillard / Ken Henry CO2 tax proposals would have had a devastating impact on employment in both mining and oil & gas. While many ideologues would have cheered this at the time, both industries were and are essential to modern industrial economies. There are many examples all over the world (and in Econ 101 textbooks) of what happens after you increase taxes on an activity or product. While there was a media campaign, it’s disingenuous to suggest that’s the only thing that stopped the tax (and got rid of one of many terrible governments we’ve had in modern-day Australia).