Thank you. Thank you very much, Cynthia, and to David and to the amazing (Atlantic) Council for hosting me here today. It’s been an excellent couple of days in DC, a few more days last week on your West Coast. Always great to be here and we are great friends, as Cynthia has said. I should say at the outset too I’ve been joined by a number of businesses from Australia as well, some of them are here today, in the critical mineral space. We have a very proud and strong business community in the resources industry and as Cynthia said, we’re happy to help, we’re happy to help and I think there’s an important task here to do.
I wanted to start though - I was also lucky enough to be here on Sunday and it gave me some time to walk around your beautiful city. On a previous visit here I had 30 minutes at the Air and Space Museum, which didn’t quite give me the time to see it all, but I've got a son who loves Apollo 11 and NASA and all this stuff so I had to go. I went again on the weekend and I had a couple of hours so I was able to read some of the exhibits this time, rather than just go to the store and get some NASA memorabilia. And I noticed reading a plaque about the X-15 plane, and those of you who follow these things or have sons who follow these things, I know the X-15 was the fastest plane in history. It still holds the record of over mark 6.7 or so. And I was reading a little plaque and it said the X-15 has this distinctive black colour, and the plaque said that they got that colour from the use of iron, nickel and niobium. Diobium - no niobium. I’m looking at my geologist in the audience. Niobium. And niobium is one of these critical minerals. It’s one on your list of 35 critical minerals to the US economy. It helped you develop the technologies that ultimately led to putting a man on the moon 50 years ago. And who knows, without that mineral that might not have happened.
This mineral, niobium, actually was only first identified in a certain form in 1801, only around 200 years ago, and it wasn’t properly defined until the 1840s. I think it wasn’t a name until after the World War ll, and it was used commercially after that. And so some of these minerals are incredibly new. Most of the geologists I talk to and work with, like Andrew from Geoscience Australia, their timescales tend to be in like millions of years, because things have changed slowly under the earth. But in this space, geologically, it’s a very, very new industry. A lot of the minerals that are on your list have either recently been identified, or certainly only been recently commercially mined and used in applications.
And this gets to my core point. My core point, Cynthia said that I’m a strong advocate for the resources industry, and I am, and I might come back to that if I get time. But why I am a strong advocate for the resources industry is because it delivers all these benefits. It’s delivered us the affordable energy that we rely on so heavily. It's also delivering us the modern technologies that we rely on and probably couldn't do without now. So if one of your, hopefully all of your phones are on silent during my speech, but even if they are, they might vibrate in your pocket if you get a message or a call. That vibration is also from a critical mineral, a rare earth, neodymium - and I’m going to murder this pronunciation too, praseodymium, got that right? I’m doing better. Those two minerals create that vibration in your pocket. And there are about 26 different minerals and metals in a mobile phone. There’s 11 minerals and metals in a coal fired power turbine, so a mobile phone is more metallurgically complex than a coal fired turbine.
So our modern age, sometimes called our virtual age, is more reliant on real minerals, real mining, than the industrial age. And there’s no getting away from that. Someone said to me this week, clean energy solutions start with the shovel in the ground; without that shovel you don't get solar panels, you don’t get renewable energies, you certainly don’t get electric cars. Wind turbines have over 500 kilograms of neodymium. A Virginia-class submarine has more than four tonnes of rare earths. These are absolutely essential commodities to our national security, to our modern life, and to the development of the world.
And that's what we have focused on. They are not necessarily large markets. They are not the kind of markets that can replace our large coal and gas and iron ore industries in Australia. But they are so essential in these modern products, that that’s why the Australian Government is focusing on them and seeking to help other countries like the United States secure their supplies of them.
To give a little bit of history here on how I ended up here today, a year and a half ago, well I'll just go a little bit further back, almost two years ago, your President issued a directive for the United States Geological Survey to identify a list of critical minerals critical to the US economy. And a few months after that I was here in DC and caught up with Secretary Zinke at the time, my counterpart. And they’d just released the 35 list. And I was able, I’m not sure if Andrew was on that trip but someone from, James might have been on that trip, someone from Geoscience Australia gave me a quick analysis of, well, how many of these 35 could we supply? And at the time we thought we were in a good position to supply about 14 of those 35, we now think Australia has about 28 in total. Some of these aren’t mined in Australia right now but we have reserves of them.
And from those discussions I had with Secretary Zinke there, we agreed to work together on a letter of intent between Geoscience Australia and the US Geological Survey. We've had further agreements between our Prime Minister and President to work on this issue. And this morning, I caught up with Secretary Ross and the interagency group from your government and our officials on working on a joint action plan to supply, or to help secure supplies of these minerals.
And I suppose I might then go next to well why are we involved, and why is there a need for government officials here to discuss the mining and commercialisation of these minerals? For most other commodities that we rely on, governments don't need to necessarily get their hands dirty, so to speak, in this way. Generally, and we are a big supporter of free and open and transparent markets to work these things out and investment flows to where production can occur at the cheapest and most efficient place. But there are some characteristics though that these markets, that give rise to a level of need for government involvement, at least at the fledgling stage of this development. The first one and perhaps most important characteristic is some of these markets are dominated by only a few suppliers. So with the case of cobalt, which is a very important ingredient into lithium batteries, and obviously the expansion of electric cars - cobalt at the moment, about 60 per cent supply comes from the Congo, and from one company, Glencore, who owns those assets. So that's a very concentrated market, and potentially has the characteristics of most markets dominated by single suppliers. In the case of rare earths, depending on the rare earth, there’s about 15 different types of rare earths. China controls around 70 to 90 per cent of the world's supply of those commodities. And so one level here, we should be doing what governments should always do, in my view, when faced with domination in markets, and that’s try and help grow and promote competition. It doesn’t matter if it's Microsoft or Standard Oil, AT&T, or in this case powerful and dominant suppliers of very important commodities. We should seek to create competition and diversity, and ultimately, resilience in markets by encouraging new supply and new opportunities. So that is what we're trying to do. That's one thing we are going to absolutely trying to do.
Another characteristic of these markets is that, geologically, they haven't really been researched all that much, because of their immaturity or their units, if you like. They haven't been the focus of a lot of geological efforts in the past. Some of them, as I said, have only been 50 odd years in commercialisation. And so when we have previously surveyed our geological resources, some of these commodities have not been high on the priority list and have either been looked over or not particularly drilled down into further. So there is an effort here to work together to try and map these resources in a better way across Australia. We are doing that through our geological survey organisation Geoscience Australia, who have an initiative at the moment to try and use the latest techniques in seismic testing, aeromagnetic testing to find, not just these minerals, but all the types of commodities for important modern economies like copper, et cetera. And this week we’ve signed a further agreement with the United States Geological Survey to keep working on those types of things. That's another reason we should be involved.
And the final reason we should be involved here in these in these markets is the need to coordinate across the world, and between sectors as well. As I mentioned at the start, there's applications of these minerals in consumer products like mobile phones right through to military hardware, the most technical and complex military hardware, and all in between. And getting a coordination across industry, consumer groups, and governments is a task we need to work at, and we probably to do a lot more work on that than we have so far.
We are a big advocate to make sure that mining practices are as sustainable as they can be and environmentally sensitive. We pride ourselves on having very strong and robust environmental regulations in Australia as I'm sure you do in your country.
But some of the production of these newer minerals is occurring in ways that clearly is not consistent with those objectives. We need to make sure we have appropriate price signals in the supply chain to encourage uptake of both of production of these minerals in a way which is consistent with the best practices around the world.
And so what are we doing? They are all reasons we should be involved and so what are we now doing? Well as I mentioned, we had very productive discussions with your government this morning. What I'm very focused on doing is doing business. To deliver results here we have to work with those businesses in the mining sector, in the manufacturing sector, and in the end user sector to deliver results. So that's why I brought a business delegation here to the United States and many companies here have projects in this area which are either already in development, or that can be expanded, or are pure greenfields of new opportunities in this space.
And so we try and find ways that government can help bring that extra supply, that diversity and ultimately competition to the markets that we require, and that is our objective. And there's lots of different ways we can do this and before I came here to the US, just before I came here, we announced in Australia that we would open up our export finance organisations, or direct them to specifically look at opportunities in this space.
Because of this issue of dominant markets and potentially distorting price signals currently in the market as a result of that, there is a need to create long term certainty here in demand and possibly to help on the investment side as well through government finance to help these projects get across the line and bring them into the marketplace and deliver open and transparent markets.
And so that's what we are focused on doing. We've also announced that we'll set up in Australia a critical minerals facilitation office, that will start on 1 January next year. It'll be tasked with working with those businesses to try and get them through the permitting process in Australia, potentially link up with finance opportunities and also continue the research and development efforts that I mentioned on the geological challenges, some of the environmental issues, and processing of these minerals through the supply chain.
So, we think we have made significant progress here and there’s been significant momentum as well, on particularly from a national security and defence perspective. I think the work that needs to be done going forward is engaging and involving the broader industrial and consumer elements of the supply chain.
We are starting to have good discussions in Europe, and it’s perhaps been a longer experience in Japan on these topics. And so there is a very good potential that we should work together to solve these issues and create better outcomes.
Ultimately I’m a real optimist for us making this work. These markets are new, as I’ve said, they're immature but we've been here before. Only 20 or 30 years ago there wasn’t much of an LNG industry though in that space of time we developed a massive market for a new product. Australia’s been at the forefront of that. We’re now the world’s largest LNG exporter, you’re closely and quickly trying to catch us up and we've been able to build that market because we relied on competition, believed in free trade and we created price signals.
We can do the same here and we need to because in my view, the world’s going to need lots and lots of different energy types. So I guess it will need the rare earths and the cobalt, the nickel, the Lithium that goes into batteries and new technologies. But it will continue to need lots of coal and gas and other energy sources as well be grown and developed because we should always focus here on what's the end goal. I mean, in my view the end goal is not the creation of an electric car or battery or coal-fired power station or an LNG tanker. The end goal is creating the better environment and better lives for people. Getting carbon emissions down is part of that. But also is making sure we meet the other United Nations Sustainability Goals including [inaudible]… And to do that we’re going to need a lot more energy.
In the last 30 years - we should be optimistic about this too. We should be thankful for what we've achieved in our own life, most of our lifetimes. In the last 30 years, poverty in our region has gone down from two-thirds, so 30 years ago two-thirds of people in the Asia Pacific region, lived on less than $1.90(*) per day. If you look around, you can see [indistinct], two of you, on average 30 years ago [indistinct]… lived on less than $1.90 per day US. Today, that figure is 2.3 per cent. So basically a generation – a remarkable outcome. That has clearly, at least in part [indistinct] because of massive expansion [indistinct]… fuelled by coal, gas primarily. And hopefully in the future, other technologies as well. So we’re going to continue to need that because there’s hell of a lot of people still in poverty and I think more than $1.90 a day is nice. But to get to the same standard of living we all enjoy, you’re a fair way off. So there’s a lot left [indistinct].
As we do all those things, work together, we will do very well. Cooperation is the best way of doing this. I’m going to finish with a little anecdote that links our two countries in this space, together. Back in the 1890s, in America, young American – I think he was only 23 years old – came to Australia and he came to work in the Gold fields in Western Australia. And he was very successful, helped a lot in developing those gold fields. Eventually he moved, co-founded a company called the Zinc Corporation which was set up to exploit the zinc deposits of Broken Hill which is in western New South Wales, a very famous mining area in Australia. He was very successful in Australia but eventually returned to the US where after a few more steps he was ultimately elected President. And that man was Herbert Hoover. The company called Zinc Corporation eventually merged and is now Rio Tinto today, one of the biggest mining companies in the world, one of our strongest companies and exporters to the world.
So we have enormous links between our two countries in this space that's been done through the mutual exchange of information, technology, people, and if we continue to work on that basis, we will solve these problems, deliver a better world and ultimately have better lives for billions of people around our great world.
So thank you very much for this opportunity today.