Australia’s Potential in Energy Transition at Risk: Can It Catch Up?

With abundant minerals, renewable resources, and proximity to Asia, Australia is primed to lead the energy transition. As the world’s largest exporter of lithium and iron ore and a major player in copper, nickel, and aluminum, Australia could take a leading role in the shift to clean energy. However, the country risks being outpaced by nations with cheaper capital, energy, and streamlined regulations, as highlighted at the recent International Mining and Resources Conference (IMARC) in Sydney.

Australia supplies two-thirds of China’s iron ore, fueling carbon-intensive steel production that accounts for about 8% of global emissions. Decarbonizing steel through green hydrogen-based processes could position Australia as a global leader in clean steel. Yet, such transformation requires access to vast amounts of affordable renewable energy, which remains a challenge.

One of the largest hurdles is the cost of renewable electricity. Solar companies would need significant incentives to sell power cheaply enough for sustainable mining profits, especially with countries in the Middle East already providing low-cost energy to global miners like Brazil’s Vale. While Australia once supported industrial growth with state-funded hydropower, governments now face financial constraints, and private capital may be necessary for renewable infrastructure investment.

The mining industry also struggles with Australia’s slow and complex regulatory processes. Although political leaders at IMARC pledged streamlined approvals, industry skepticism persists. Australia’s path to becoming a clean ene