Covering more than 1.3 million km2, around 17% of the Australia’s entire land mass, the Northern Territory (NT) is home to some of Australia’s most alluring natural phenomena: Alice Springs, Kata Tjuta, Kings Canyon and the spectacular Uluru or Ayres Rock. Its uniquely red terrain – cast against the often sunny skies – is awash with historical Aboriginal culture too; much of the land is owned by the Aboriginal people comprising a wide assortment of tribes. However, those cultures have often clashed with state and federal governments , particularly when it comes to matters associated with land and its use.
Although not in the Northern Territory, Australian-born Rio Tinto’s controversial work at Western Australia’s Juukan Gorge turned the spotlight on the conflict between the mining industry and Australians, particularly those of native heritage. The destruction of ancient rock shelters was met with fury which ultimately led to the removal of several senior executives, including CEO Jean-Sebastien Jacques, and could set a precedent for future relations between Aboriginal groups and miners in the Northern Territory
A territory full of promise
Despite the potential for discord mining operations bring, the sector is critical. The region’s government says the mining and energy resources sector provides a wealth of opportunity and is economically strong, dominating the local economy and worth more than 16% of the territory’s economic output.
“The Territory has a world-class resource endowment with some of Australia’s largest deposits in non-ferrous metals (zinc, copper, lead, tungsten), battery and high-technology minerals (lithium, rare earths and vanadium), fertiliser commodities (phosphate and potash), gold and uranium,” the Northern Territory Government says.
The authority adds that the territory is prospective and mineral rich, with large, underexplored areas providing what it calls “tremendous opportunities for mineral discoveries in a stable, safe and secure jurisdiction”. As part of its appeal, the region’s infrastructure is already geared towards mining and processing operations, supported by a favourable regulatory framework and accessible and well-trained workforce, as well as a well-established supply chain and the country’s closest shipping port to Asia. Today the Northern Territory already has mature export markets across the continent, including China, India, Japan and South Korea.
Among the six major operational mines is Groote Eylandt, said to be the world’s largest manganese mine supplying 15% of global demand, and the territory is home to one of the world’s largest deposits of zinc-lead at the McArthur River Mine. Combined, the 2020–21 production value of the region’s operations was said to be $3.06bn (A$4.28bn) according to the NT Government’s Resourcing the Territory initiative. Until January 2021 there were seven working facilities, in addition to the Ranger uranium mine, situated near Jabiru, which is currently being rehabilitated following the end of production there at the beginning of last year.
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By GlobalDataThe four-year Resourcing the Territory programme includes a range of strategies designed to “underpin the long-term sustainability of the Territory’s resources sector,” according to the government. Signifying its importance to the regional economy in April 2021, the NT Government announced it would be expanding the initiative beyond its original scope, committing several million dollars more to the programme each year, suggesting the duration of the initiative would later be extended too.
The territory itself has what its government says is a three-point plan to accelerate exploration for critical minerals, support critical mineral projects to commence production, and grow refining, processing and manufacturing.
“The Territory is focused on increasing participation in the latter stages of the critical minerals value chain and is actively seeking investment to support this goal,” the government says. “There are currently four key critical mineral projects under development in the territory, with a total capex of more than $2.14bn (A$3bn). The territory has a proven track record of developing mining projects, associated infrastructure and industry workforce.”
The shadow of Covid-19 lingers
Although the landscape for mining operations in the region is good, like many other parts of the Australian – and global – economy, the pandemic has been a barrier to growth. In fact, as state and federal measures introduced to help mitigate the impact of Covid-19 begin to expire, the number of businesses inching towards closure continues to rise. Many of those businesses are in the mining sector or its related supply chain.
NT chief minister Michael Gunner, however, believes the region can be the country’s “rebound capital” as it emerges from the shadow of Covid. He has a point too; it is an attractive proposition for exploration, with significant targets still to be located and extracted. As for the pandemic, Gunner is one of a growing number of political voices – both inside and out of Australia – to be arguing for an end to the “evade at all costs” approach to the virus, in favour of a “live with it” one.
Speaking to the media in early December 2021 he said: “We can’t completely eliminate Covid from the community; we are at a point where Covid-zero no longer exists as a strategy or as a reality. This is part of our new normal in the territory.” His comments came days before the territory refocused its efforts to manage the virus rather than suppress it.
Investing in the future
The Northern Territory, and Australia more broadly, is increasingly attracting foreign investment. According to figures collated by the country’s department of foreign affairs and trade, 2020 saw a total of $257m (A$360m) in foreign direct investment in mining and extracting. This was more than a third (35%) of total foreign direct investment for the whole of the country that year.
With an abundance of untapped reserves and some already well-established operations and supply chains, it’s clear the region is of critical importance to Australia’s mining industry, and the global partners it can attract. Not just mine developers and operators, the entire sector and its the supply chain could do much worse than looking to, and beneath, the red earth for opportunities.
If proof of that promise were needed, in mid-December Lucapa Diamond said its Merlin facility may yield 2.1 million carats of diamond over its 14-year mine life, or about 153,000 carats a year, making it the country’s biggest commercial diamond mine. Situated south-east of Darwin, the mine could become the country’s only diamond producing facility, pending promising results from a feasibility study due for completion later this year.
Despite the promise the mining sector has to offer domestic and international stakeholders, the industry faces one major barrier: environmental, social and corporate governance (ESG). Juukan Gorge is a stain on the industry that will take some time to fade, if it can ever. It left a huge amount of bitterness among communities, investors and even lawmakers, and shone a light on the incredibly ill-judged approaches mining companies sometimes take to counter public opposition. It has led to a new focus on the rights of indigenous communities across Australia and even around the world, an emphasis that will arguably reshape policies, practices and perceptions.
While the commodities extracted from the ground boast significant value, so too does ESG and public opinion. The mining company of today is encouraged to take nothing for granted, to engage with ESG and listen to the communities it operates or hopes to operate in. because if it doesn’t, it cannot simply expect or even be guaranteed a better, brighter and more profitable tomorrow, a message that is not unique to Australia.
