On 7 January this year, Indonesia formally joined the so-called BRICS (Brazil, Russia, India, China and South Africa) coalition. This group of countries have long sought to reduce the influence of the United States and western institutions.
It should have been clear to the Australian Government that Indonesia has been moving closer to Russia and China’s orbit for some time. Yet, the reports this week of Russian and Indonesian discussions about military cooperation came as a shock.
The report claimed that just one month after Indonesia joined BRICS, Russia had requested aircraft to be based on the island of Biak just 1400 kilometres north of Darwin. The Indonesians have denied that they will allow Russian planes to be based there but the authors of the news article claim that Indonesia had permitted Russia to land nuclear capable Tupolev Tu-95 bombers at Biak in recent years.
Worse than the collective shock of Australia’s misguided political class to this news is the fact that almost nothing has been done by our current Australian Government in response to the changed security environment, except perhaps the use of ever stronger epithets to describe Vladimir Putin.
Labor has cut defence spending, has stopped additional planned purchases of the Joint Strike Fighter (which the LNP plans to reverse) and has sat idly by while Indonesia has destroyed large parts of our critical minerals industry.
Until Labor got to power, Australia was the world’s largest nickel exporter thanks to the pioneering efforts of the great Australian Arvi Parbo in the 1960s. He swiftly took advantage of the post-war boom for stainless steel (nickel is a key ingredient) and built a town (Kambalda), a mine and a rail line within 18 months. These days Arvi would still be counting the trees, as part of the required environmental study in that time frame.
In recent years, Labor, and woke corporates like BHP, became starstruck at the prospect of a new nickel boom, this time fuelled by demand for electric vehicles. In late 2022, Anthony Albanese visited BHP’s nickel refinery in Western Australia with the Japanese PM to sign an agreement on critical minerals which Albanese said were “needed to build the green technologies of the future.”
Australia and Indonesia have the world’s largest nickel reserves, but we should have had the head start in meeting new demands because Indonesia’s laterite reserves have lower nickel content and hence take more energy to extract. The idea was that we could use “green” energy to mine our richer sulphide reserves and that, even if it cost more, the climate-conscious, Tesla-driving Europeans would happily pay to be green. Spoiler alert: they were not.
The nickel refinery that Albanese visited has since shut (along with a smelter and mines) and 3000 Australians lost their jobs.
Indonesia followed a different strategy. With Chinese finance and know-how, they built a whole lot of coal fired power stations and this cheap energy helped Indonesia undercut Australia. Astoundingly, Indonesia has increased its coal use by 60 per cent, enough to power around 20 coal fired power stations, in the two years since it signed up to “net zero”.
Anyone who watched Channel 7’s excellent documentary on the environmental and social cost, caused by Indonesia’s nickel production growth can see that the so-called “climate transition” is not clean and it is not green.
The new Indonesian President said during last year’s election that he would continue their aggressive nickel policy and that he wanted to repeat its success in bauxite and copper, another two industries where thousands of Australian jobs are at risk.
So, what has been the response from the Australian Government to this threat to our jobs and wealth? Labor has put a carbon tax on our nickel, aluminium (which is made from bauxite) and copper facilities. And, we have continued to shut down our coal fired power stations. For good measure we sell many of the countries (although not Indonesia) the coal that allows them to steal our wealth.
Kafka could not write fiction this weird. We tax our own industries and shut down our coal fired power stations in a futile attempt to change the temperature of the globe. But we continue to sell our coal to countries that lets them ignore their climate commitments and make us poorer.
Critical minerals, like nickel, are our lifeline to keeping a strong relationship with the United States and hence help our national defence. President Trump has made clear his desire to secure reliable supplies of critical minerals. However, our net zero commitments are now reducing our ability to supply critical minerals. Our out of date, and out of step, climate policies were already making us poorer but they are now putting at risk our national security too.
