Australian mining industry: 2025 review

Core Insights - Australia maintains its status as a secure, low-risk supplier of critical minerals, bolstered by strong ESG credentials and a skilled mining workforce [1] - The country is actively diversifying its critical minerals supply chains away from China's dominance, with significant growth in demand for lithium, nickel, copper, and rare earths driven by global decarbonization efforts [2][3] Industry Overview - The mining sector contributes over 12% to Australia's GDP and accounts for approximately 70% of export earnings, with coal representing 5% of global output [5] - Australia holds significant global reserves, including 36.4% of lead, 29.4% of manganese, and 39.8% of lithium, positioning it among the top producers of various commodities [6] Production Forecasts - Lithium production is projected to increase by 2.7% in 2025, reaching 114.4 kilotonnes, with a CAGR of 5.2% expected until 2030 [9] - Iron ore output is anticipated to grow by 1.4% in 2025, with a forecasted CAGR of 2.8% from 2025 to 2030, reaching 1,108.7 million tonnes [10] - Zinc production is expected to recover modestly by 1.6% in 2025, while copper output is forecasted to decline by 7.9% due to mine closures [11][14] Policy and Investment - Federal initiatives such as the Critical Minerals Strategy and a A$4 billion Critical Minerals Facility are enhancing investment confidence and promoting downstream processing [8] - The Victorian state government has launched a Critical Minerals Roadmap to attract investment in various minerals and promote ethical sourcing [20] Technological Advancements - The mining sector is increasingly adopting AI and automation technologies to enhance operational efficiency and meet rising demand for transition minerals [23][24] - Major mining companies are implementing autonomous systems, with over half of haul truck movements in the Pilbara expected to be autonomous by mid-2025 [24] Operational Challenges - Rising operational costs and skill shortages are impacting the mining industry, with wage growth in mining averaging 5.3% in 2024, above the national average [26][27] - The industry faces financial stress, with some companies experiencing liquidity pressures and project delays due to skill shortages [28][29]