Michelle Grattan, University of CanberraThe government is speeding up the establishment of its planned $1 billion Sovereign Guided Weapons Enterprise, which aims to boost Australia’s own defence production capabilities as it faces a deteriorating security outlook.
The defence department will now start the process of selecting a strategic industry partner to operate a sovereign guided weapons manufacturing capability to produce missiles and other weapons on the government’s behalf .
The new enterprise will specialise in guided missiles for use across the defence force.
The increasing assertiveness of China and Australia’s deteriorating relations with that country, as well as the lessons of COVID, have strengthened the push for greater sovereign capability.
Scott Morrison, who will announce the acceleration in Adelaide on Wednesday, said in a statement, “Creating our own sovereign capability on Australian soil is essential to keep Australians safe, while also providing thousands of local jobs in businesses right across the defence supply chain.
“As the COVID-19 pandemic has shown, having the ability for self-reliance, be it vaccine development or the defence of Australia, is vital to meeting our own requirements in a changing global environment.”
Peter Dutton, who was only sworn into the defence portfolio on Tuesday, said the announcement “builds on the agreement the Morrison government achieved at AUSMIN last year to pursue options to encourage bilateral defence trade and to advance initiative that diversify and harness our industry co-operation”.
Dutton said Australia would work closely with the United States “to ensure that we understand how our enterprise can best support both Australia’s needs and the growing needs of our most important military partner”.
The Australian Strategic Policy Institute, a defence think tank, estimates Australian will spend $100 billion in the next 20 years on buying missiles and guided weapons.
ASPI defence expert Michael Shoebridge wrote in June last year:
“The ADF gets its missiles from US, European and Israeli manufacturers, at the end of long global supply chains. And, when the home nations of these manufacturers need missiles urgently themselves, their needs can get in the way of meeting ours […]
“The deteriorating strategic environment in our region, combined with the heightened understanding of how vulnerable extended global supply chains are, means the current situation has become unacceptable.”
Companies that could be a potential partners include Raytheon Australia, Lockheed Martin Australia, Kongsberg, and BAE Systems Australia. The partner will need to be suitable to work with the US and have strong links with Australian supply chain businesses.
The new Minister for Industry, Science and Technology, Christian Porter released a National Manufacturing Defence Roadmap on Tuesday, for a 10 year plan for investment.
Nearly 800,000 half-price air tickets for travel to and from holiday areas will be provided under a $1.2 billion program to support aviation and tourism, to be announced by the Morrison government on Thursday.
The measures are designed to assist these industries, still hard hit by the effects of the pandemic, after JobKeeper finishes late this month.
The cheap fares will run from April 1 to July 31.
The loan guarantee scheme that operates for small and medium sized businesses is also being expanded and extended for enterprises that leave JobKeeper in the March quarter.
While this is an economy-wide measure, the government says those eligible will be especially in the tourism sector.
Thirteen regions have been designated initially for the cheap flights – the Gold Coast, Cairns, the Whitsundays and Mackay region (Proserpine and Hamilton Island), the Sunshine Coast, Lasseter and Alice Springs, Launceston, Devonport and Burnie, Broome, Avalon, Merimbula, and Kangaroo Island.
The number of tickets will be demand driven, as will the places the flights depart from, but it is estimated there will be about 46,000 discounted fares a week over 17 weeks. A return ticket counts as two discounted fares, the government said.
Under the loan initiative, the maximum size of eligible loans will be increased from the present $1 million to $5 million. The maximum eligible turnover will also be expanded, from $50 million to $250 million.
Maximum loan terms will go from five years to 10 years, and lenders will be allowed to offer borrowers a repayment holiday of up to two years.
Eligible businesses will also be able to use the scheme to refinance their existing loans, so benefitting from the program’s more concessional interest rates.
The government says more than 350,000 businesses which are on JobKeeper are expected to be eligible under the expanded scheme, for which loans will be available from the start of next month and must be approved by the end of December.
For international aviation, there will be support from April until the end of October, when international flights are expected to resumer. The assistance across both airlines will help them maintain their core international capability, keeping 8600 people in work as well as planes flight-ready.
Among the assistance for aviation, several existing support measures are being extended until the end of September, including waivers for air services fees and security charges.
There are also extensions for the business events grants program, the assistance for zoos and aquariums, and the grants to help travel agents.
More than 600,000 people are employed by the tourism sector with domestic tourism worth $100 billion to the economy.
Tourism has suffered severely from the closed international border and from the state border closures and restrictions.
Scott Morrison described the package as “our ticket to recovery … to get Australians travelling and supporting tourism operators, businesses, travel agents and airlines who continue to do it tough through COVID-19, while our international borders remain closed.
“This package will take more tourists to our hotels and cafes, taking tours and exploring our backyard”.
Much of the focus of Opposition Leader Anthony Albanese’s budget reply speech was around Labor’s proposal to expand childcare subsidies – a policy with some flaws but which moves in the right direction.
Labor’s plan to modernise the electricity grid by setting up a “Rewiring the Nation Corporation” with A$20 billion in government support was also met with general approval.
What got less attention was the third pillar of Labor’s budget strategy – a big push toward more local manufacturing jobs.
Albanese wasn’t shy about what he meant. He lamented the loss of Australia’s car-making industry:
Australians will never forget that it was this government that drove Holden, Ford and other car makers out of Australia, taking tens of thousands of jobs in auto manufacturing, servicing and the supply chain with them.
He then announced Labor would create a “National Rail Manufacturing Plan” to expand Australia’s boutique train-building industry:
We will provide leadership to the states and work with industry to identify and optimise the opportunities to build trains here in Australia – for freight and for public transport.
The economics of pillars 1 and 2 make sense. Pillar 3 involves trying to turn back the clock on the irrepressible, tectonic forces of globalisation and automation to pretend we should make things here we shouldn’t.
Understanding comparative advantage
Countries benefit from trade rather than seeking to produce everything they need locally. This is due to the idea of “comparative advantage”, originated by David Ricardo in his 1817 book On the Principles of Political Economy and Taxation.
One country (call it country A) might be more efficient than another (country B) in absolute terms at producing, for example, T-shirts and wine. It is tempting to think, then, that country A should produce both T-shirts and wine.
But what if country B is really inefficient at producing T-shirts but reasonable at producing wine? If country A specialises in producing T-shirts and country B specialises in producing wine, they can trade and both be better off.
Why? Because country A produces T-shirts much more efficiently than country B, and country B is only a little less efficient at producing wine. Overall, both economies get more efficient, raising living standards.
Making cars and trains in Australia
Does Australia have any comparative advantage at producing cars or trains?
With cars the evidence speaks for itself. Local manufacturing only survived for decades because of huge government subsidies. Without them Australian-made cars couldn’t compete.
Only part of that was to do with labour costs – and we should be rightly proud of our comparatively high wages and good working conditions. Germany – home of BMW, Mercedes Benz and Volkswagen – also has high wages and conditions.
What about trains? Some trains are made in Australia – by Downer EDI and Canadian multinational Bombardier. That’s good for a few thousand jobs. But the market is domestic, with the customers being state governments who buy with an eye on local jobs.
There’s not a lot to suggest it can become an export industry, competing for example with Japan, which has been making bullet trains since the early 1960s. Or France, whose train builders have sold hydrogen trains to Germany and high-speed freight trains to Italy.
With these competitors having such an edge, and the well-known phenomenon of “learning-by-doing”, are we really going to catch up?
There are many other sectors in which Australian producers are internationally competitive, such as agriculture, services and areas of high-tech manufacturing.
Building on and expanding comparative advantage in these areas makes a lot more sense.
The case for strategic manufacturing
That said, the COVID-19 pandemic has taught us how fragile certain parts of our economy are. The same logic of comparative advantage that has done so much to improve living standards has also made us vulnerable in some areas.
Having little or no manufacturing capacity in personal protective equipment or pharmaceuticals like insulin, EpiPens and antibiotics is potentially very dangerous. Importing more than 90% of our pharmaceuticals puts us in a vulnerable position if a state actor that controls important parts of the global supply chain decides to cut supply. This is what economists call the “hold-up problem”.
So it makes sense for Australia to have more presence in strategic manufacturing like pharmaceuticals and personal protective equipment, even if producing these goods locally is not as efficient as buying them from overseas.
From just-in-time to just-in-case
The pandemic has taught us that we have, as a nation, moved a little too far towards the efficiencies of “just-in-time” supply chains. We need to move back somewhat, but certainly not completely, in the direction of “just-in-case” – to a little less efficiency but a little more insurance.
That should involve a push for strategic manufacturing. We should at all times be looking to build on and expand our comparative advantage.
But trying to go “Back to the Future” and build an Australian De Lorean makes no sense.
In its latest stimulus measure, the Morrison government will extend its first home loan deposit scheme to an extra 10,000 home buyers.
But unlike existing arrangements, where people can purchase a new or existing home, these buyers will have to build a house or buy a newly-built property.
The condition is to direct maximum help to the residential building sector.
As with the existing program, the extended program allows people to buy with a deposit of as little as 5%, much less than the usual deposit of about 20%. The government guarantees the other 15% of the deposit.
The additional guarantee will run until June 30, 2021. The program has already assisted some 20,000 buyers since the start of the year.
Treasurer Josh Frydenberg said: “Helping another 10,000 first home buyers to buy a new home … will help to support all our tradies right through the supply chain including painters, builders, plumbers and electricians.
“In addition to the government’s HomeBuilder program, these measures will support residential construction activity and jobs across the industry at a time when the economy and the sector needs it most.
“At around 5% of GDP, our residential construction industry is vital to the economy and our recovery from the coronavirus crisis.”
The first home loan deposit scheme began in January, to provide up to 10,000 guarantees for the financial year to June 30, 2020. It saw strong demand in its first six months , with 9,984 out of a maximum of 10,000 guarantees offered.
Between March and June, the scheme supported one in eight of all first home buyers.
The government has announced new caps for the scheme, given newly built homes are usually more expensive than existing homes for first home buyers:
On July 17, Prime Minister Scott Morrison announced an additional A$400 million to attract film and television productions to Australia until 2027.
In a press release, Morrison argued Australia is an attractive destination due to our relative success in managing COVID-19. The idea is that this financial expansion of the “location incentive” program will attract international filmmakers in production limbo to come to Australia.
What does the Australian film industry get out of this incentive? There is no doubt more film production here will ensure the employment of production staff, technical crews and support actors, many of whom have been badly economically affected by the stoppage in film making. As Morrison notes:
Behind these projects are thousands of workers that build and light the stages, that feed, house and cater for the huge cast and crew and that bring the productions to life. This is backing thousands of Australians who make their living working in front of the camera and behind the scenes in the creative economy.
The existing location offset provides a tax rebate of 16.5% of production expenses spent in Australia, while the location incentive – which this $400 million will go towards – provides grants of up to 13.5% of qualifying expenses.
This new input is predicted by the government to attract around $3 billion in foreign expenditure to Australia and up to 8,000 new jobs annually.
This is not a fund to make Australian films, but an incentive for foreign filmmakers to make films in Australia.
Many countries offer similar incentives.
The UK offers up to a 25% cash rebate of qualifying expenditure; Ireland offers 32% tax credit on eligible production, post-production and/or VFX expenses for local and international cast and crew, and goods and services.
Singapore is even more generous, offering up to 50% of qualifying expenses. But as a condition of receiving the money, the filmmakers must portray Singapore in a “positive light”.
There are usually caveats: a minimum spend of the film’s budget in the country providing the incentive; a minimum employment of local practitioners on the crew; and in some cases a “cultural test”.
In the UK, productions can earn points towards this cultural test by filming in English, contributing to local employment, and creating films “reflecting British creativity, heritage and diversity”.
Does Australia apply any similar conditions? The location tax offset requires the company to be operating with an Australian Business Number, and have a minimum qualifying spend in Australia of $15 million, while the location incentive is for “eligible international footloose productions”, that is international films being produced in Australia.
Delights, and concerns
The Australian and New Zealand Screen Association — whose members include Universal, Walt Disney, Sony, Netflix, Warner Brothers and Paramount — commissioned a research report on Australian location incentives in 2018.
The report argued other countries have been more generous in their provision of location offsetting, thereby resulting in a loss of international production in Australia. The association is delighted about this latest announcement.
But how do local filmmakers feel about this funding? Screen Producers Australia, whose members include local producers and production businesses, has said this funding may help to support around 20% of the local workforce, but is concerned about the lack of support for Australian filmmakers making Australian films.
This new funding will certainly not help the production and development of locally made films and television. As Screen Producers Australia asserts, foreign made films and producers can now access more government funding in Australia than Australian made films and producers.
A sector in crisis
On June 24, the federal government announced new funding packages to support the “creative economy”. This included $50 million for a Temporary Interruption Fund to help film and television producers who are unable to access insurance due to COVID-19 to secure finance and restart production.
This $50 million is the only support the government has specifically targeted towards the local film sector under coronavirus. Nearly a month on, no details have been released on how filmmakers will be able to access this support.
Since April 2020, free-to-air and subscription television services have been exempt from the need to adhere to the Australian content stipulations, significantly reducing the amount of Australian television content produced into the foreseeable future.
This was further compounded by an announcement by the ABC in mid-June they would be reducing their commitment to local content production, given ongoing budget cuts.
The capacity of the Australian film and television sector to continue to make Australian stories that reflect our culture is seriously impacted.
While the government is showing support and generosity to foreign filmmakers and commercial television interests, it seems less inclined to demonstrate similar largesse to its own creators.
Some film workers are now likely to be employed, but the sector overall will not be assisted. If our own stories are not being made for our audiences, the on-going loss to the nation will be significant.
Queensland Nationals Senator Matt Canavan on Monday night denied suggestions the government subsidises Australia’s fossil fuel industry. The comments prompted a swift response from some social media users, who cited evidence to the contrary.
Canavan was responding to a viewer question on ABC’s Q&A program. The questioner cited an International Monetary Fund (IMF) working paper from May last year that said Australia spends US$29 billion (A$47 billion) a year to prop up fossil fuel extraction and energy production.
The questioner also referred to media reports last year that Australia subsidised renewable energy to the tune of A$2.8 billion. He questioned the equity of the subsidy system.
Canavan disputed the figures and said there was “no subsidisation of Australia’s fossil fuel industries”. You can listen here:
So let’s take a look at what the Australian government contributes to the fossil fuel industry, and whether this makes financial sense.
What does Australia contribute to the fossil fuel industry?
Canavan said the figures cited by the questioner didn’t accord with the view of the Productivity Commission.
The commission’s latest Trade and Assistance Review doesn’t specifically mention federal subsidies. But it describes “combined assistance” for petroleum, coal and chemicals in mining of about A$385 million for 2018-19.
Subsidies to fossil fuel companies and other products can be difficult to categorise. Often there is disagreement as to what counts and what doesn’t.
So despite the disparities, it’s clear the fossil fuel industry receives substantial federal government subsidies. Earlier this month a leaked draft report by a taskforce advising the government’s own COVID-19 commission recommends support to a gas industry expansion.
Importantly, these subsidies benefit the fossil fuel industry relative to its competitors in the renewable sector.
Do these payments make sense?
The subsidies are also aimed at a sinking industry.
As Tim Buckley, of the Institute for Energy Economics and Financial Analysis, notes, COVID-19 and the falling cost of renewables are delivering a hit to the export fossil fuel industry in Australia from which it may never recover.
Fossil fuel companies such as Santos are also under extreme pressure from some super funds to adopt strict emissions targets.
Moreover, these subsidies produce very few direct jobs in fossil fuel extraction.
According to the Australian Bureau of Statistics, coal, oil and gas extraction create just 64,300 direct jobs. Only around 10% of coal industry employees are women.
If we divide the IMF subsidy figure by the number of direct jobs, the governments of Australia spend A$730,000 each year for every direct job in the coal, oil and gas industry. That equates to A$1,832 for every Australian.
Where are the profits?
Setting aside the madness of this support for fossil fuels given the climate crisis, the subsidies make no financial sense.
With so much government support, you’d think the industry would be full of profitable companies filling the government’s coffers with taxes. But this is not the case.
Australian Taxation Office data for 2016-17 show eight of the ten largest fossil fuel producers in Australia paid no tax. That’s despite nine of these companies having revenue of about A$45 billion for that period.
Not all of these benefits go to these big producers, but many of them do.
If Prime Minister Scott Morrison really wants to lessen the impact of the coronavirus on Australians and save jobs, then this gross level of subsidies must be phased out.
Money needed elsewhere
Subsidies paid each year to the fossil fuel industry could be used far better elsewhere.
It could help retrain or provide generous redundancy packages for the relatively small number of workers in fossil fuel industries and their communities.
The subsidies are unconscionable when you consider the resources so desperately needed now for health and the broader economy. The coronavirus must force us as a country to re-evaluate how we distribute taxpayer funds.
As International Energy Agency head Fatih Birol notes, we now have an “historic opportunity” to use stimulus to transition to clean energy.
Directing funds to companies that have had 30 years to prepare for their demise is simply throwing away public money. It could be put to so much better use.
Workers everywhere are feeling the impact of COVID-19 and the restrictions necessitated by COVID-19.
A value chain is the process by which businesses start with raw materials and add value to them through manufacturing and other processes to create a finished product.
A supply chain is the steps taken to get a product to a consumer.
Most of the time we don’t think about them at all.
Cotton is complex
Our research project with the Cotton Research Development Corporation is investigating strategies for improving labour conditions in the value chain for Australian cotton.
This is the chain in which our cotton is spun into yarn, woven or knitted into fabric, and turned into garments and other items which are sold to consumers.
When we began our project in mid-2019 the world was a very different place.
The changes brought by COVID-19 have had a significant impact on those working throughout the chain – particularly in garment production, but with flow on effects to other tiers.
The tiers in the diagram are numbered backwards.
The first is Tier 4, where Australian cotton is grown and harvested. The next is Tier 3 where it is turned into yarn, usually overseas.
Tier 2 is the production of fabric, Tier 1 is the production of garments and other products, and Tier 0 is retailing and selling to retailers.
Tier 0 (brands and retailers) has been hit by delays in shipments due to factory closures at Tiers 1 and 2.
However this has been matched by a decline in demand as social distancing and lock-down arrangements discourage or prevent consumers from shopping in person.
Globally, many multinationals have closed their doors.
Shocks along the chain…
Nike is expecting sales to drop by US$3.5 billion. While seemingly immune from some of the social distancing provisions, online retail is also likely to take a hit due to a drop in demand.
Tier 1 (garment manufacturing) has been hit by falling demand as retailers cancel orders or ask for delays in payment. It has also faced disruptions in the supply of fabric, especially from China.
Fabric producers in Tier 2 and cotton spinners in Tier 3 have had to contend with a decreased supply of raw materials and demands to retool to produce medical equipment.
For cotton growers in Tier 4, the fall in demand has pushed prices down from US 70 cents at the start of the year to US 50 cents, the lowest price in a decade, before a partial recovery to US 58 cents.
…with human costs
In Bangladesh estimates have 1.92 million workers at risk of losing their jobs as factories receive notice of US$2.58 billion worth of export orders cancelled or on-hold.
Making things worse, many workers in Tiers 1-3 were receiving less than a living wage defined as the minimum needed to provide adequate shelter, food and necessities. This has made it hard for them to plan or save for emergencies.
Many are migrant workers without funds to return home.
Even the workers who manage to hang on to their jobs aren’t in the clear. Programs set up to improve their working conditions have been disrupted.
The Accord on Fire and Building Safety in Bangladesh is a legally-binding agreement between brands and unions set up in the wake of the collapse of the the Rana Plaza factory in 2013 which killed 1,133 people and critically injuring thousands more.
Inspections under the program have been suspended, as have audits due to the closure of borders.
The problems are cumulative – delays in orders due to interruptions in supplies will need to be addressed when factories scale back up, creating demands from buyers that might result in pressure for workers to work unpaid and involuntary overtime, or even worse, subcontract to the informal market where there is a high risk of human rights violations.
Shoots of hope
Amid the havoc are some shoots of hope.
Companies along the value chain have been asked to produce and supply medical equipment such as surgical gowns, face masks and materials and elastics.
Dozens of brands and retailers have donated funds and activated their logistics networks to support the effort.
As orders slowly start returning, cotton and textile associations have joined forces in calling for greater collaboration throughout the value chain. Governments have announced aid packages for their workers, and the European Union has provided an emergency fund to support the most vulnerable garment workers in Myanmar.
Longer term, the supply risks highlighted by the disruption might cause companies along the value chain to diversify their suppliers and even produce locally.
The crisis has demonstrated forcefully the importance for manufacturers and retailers to be agile. Yet this can best be done when workers have been well trained and have access to the best technology and equipment.
For now, we watch and see. Cotton is as good an indicator as any other of the brittleness of supply chains and the ways in which what we produce and consume affects the livelihoods of those further down the chain.
In the short-term, a best-case scenario would see a revaluing of garment work as “essential” in order to produce protective/medical equipment that we need in a way that benefits the people who help make them.
Sarah Kaine, Associate Professor UTS Centre for Business and Social Innovation, University of Technology Sydney; Alice Payne, Associate Professor in Fashion, Queensland University of Technology, Queensland University of Technology, and Justine Coneybeer, Research Assistant – Supply Chain, Queensland University of Technology
The airline industry will wear the scars of the coronavirus pandemic for a very long time.
Significant demand shocks aren’t new to the airline industry. In this century alone it has weathered the storms caused by the 2001 September 11 attacks and the 2002-04 Severe Acute Respiratory Syndrome pandemic.
But we have never before seen a shock of this magnitude affecting the entire world for what looks as if it will be a very long time.
So, will the airline industry be able to handle this predicament? What role will and should the governments play? And, when all this is over, what will have changed for good?
Many airlines can’t survive as they are
Right now the name of the game, not only for the airlines but for most businesses, is liquidity – having money regularly coming in through the door.
An otherwise-solvent enterprise incapable of securing sufficient liquidity to cover its current costs can be forced into bankruptcy, and extreme uncertainty doesn’t help.
Although the airline industry had a good decade overall, finishing each of the last ten years in the black, its profit margins remain low, and profitability differences between regions and carriers are rather high.
Most airlines only have enough cash reserves to cover a few months of their fixed costs (costs that have to be paid regardless of whether their planes are flying).
The dynamics of the disease spread suggest that the extreme disruption we are seeing will stay with us for many months.
Governments will have to make hard decisions.
Broadly, they’ve three options
let the struggling private airlines fall
offer them liquidity to help weather the storm
nationalise them, as the Italian government already has with Alitalia
I expect governments to use (and misuse) all three, with a significant number of small airlines (and potentially several mid-sized airlines) going out of business in the process.
The main argument that will be used for not allowing airlines to fail will be that connectivity will be an important driver of the post-crisis recovery.
This wider economic benefit will be emphasised by the governments that choose to bail out or nationalise their carriers.
Big airlines might get help, even if they’re weak
I expect larger carriers to receive priority treatment by governments based on the fact that they provide more connectivity, sometimes without regard to their long term viability.
This means that once the pandemic is over, travellers will likely find a more concentrated airline market, with fewer carriers in operation. A greater proportion of them will be government owned.
To start with, flight frequency will be lower and planes might be emptier, depending on the fleet mix the surviving airlines will use.
Whether prices will be higher or lower will depend on the interplay of demand and supply.
Fewer airlines and fewer flights would tend to drive airfares up, while lower demand and lower fuel prices after what is shaping up to be a global recession would drive airfares down.
The net outcome is anyone’s guess. I also expect an acceleration of product unbundling (food, drinks, baggage allowances and so on being sold separately), especially if recovery is slow and surviving airlines will be under pressure to cut costs.
Last but not least, I should mention that it’s not only the airlines. Airports, aircraft manufacturers, and air navigation service providers will also find themselves under financial stress as demand evaporates.
The COVID-19 pandemic will stress-test the entire civil aviation industry, and when it is over – at least in the first months and maybe for years, the travelling public will return to an industry that has changed.
Last month, scientists uncovered a mineral called Edscottite. Minerals are solid, naturally occurring substances that are not living, such as quartz or haematite. This new mineral was discovered after an examination of the Wedderburn Meteorite, a metallic-looking rock found in Central Victoria back in 1951.
Edscottite is made of iron and carbon, and was likely formed within the core of another planet. It’s a “true” mineral, meaning one which is naturally occurring and formed by geological processes either on Earth or in outer-space.
But while the Wedderburn Meteorite held the first-known discovery of Edscottite, other new mineral discoveries have been made on Earth, of substances formed as a result of human activities such as mining and mineral processing. These are called anthropogenic minerals.
While true minerals comprise the majority of the approximately 5,200 known minerals, there are about 208 human-made minerals which have been approved as minerals by the International Mineralogical Association.
Some are made on purpose and others are by-products. Either way, the ability to manufacture minerals has vast implications for the future of our rapidly growing population.
Climate change is one of the biggest challenges we face. While governments debate the future of coal-burning power stations, carbon dioxide continues to be released into the atmosphere. We need innovative strategies to capture it.
Actively manufacturing minerals such as nesquehonite is one possible approach. It has applications in building and construction, and making it requires removing carbon dioxide from the atmosphere.
But scientists discovered it can also be made by passing carbon dioxide into an alkaline solution and having it react with magnesium chloride or sodium carbonate/bicarbonate.
This is a growing area of research.
Other synthetic minerals such as hydrotalcite are produced when asbestos tailings passively absorb atmospheric carbon dioxide, as discovered by scientists at the Woodsreef asbestos mine in New South Wales.
You could say this is a kind of “modern-day alchemy” which, if taken advantage of, could be an effective way to suck carbon dioxide from the air at a large scale.
Meeting society’s metal demands
Mining and mineral processing is designed to recover metals from ore, which is a natural occurrence of rock or sediment containing sufficient minerals with economically important elements. But through mining and mineral processing, new minerals can also be created.
Smelting is used to produce a range of commodities such as lead, zinc and copper, by heating ore to high temperatures to produce pure metals.
The process also produces a glass-like waste product called slag, which is deposited as molten liquid, resembling lava.
Once cooled, the textural and mineralogical similarities between lava and slag are crystal-clear.
Micro-scale inspection shows human-made minerals in slag have a unique ability to accommodate metals into their crystal lattice that would not be possible in nature.
This means metal recovery from mine waste (a potential secondary resource) could be an effective way to supplement society’s growing metal demands. The challenge lies in developing processes which are cost effective.
Our increasing knowledge on how to manufacture minerals may also have a major impact on the growing synthetic gem manufacturing industry.
In 2010, the world was awestruck by the engagement ring given to Duchess of Cambridge Kate Middleton, valued at about £300,000 (AUD$558,429).
The ring has a 12-carat blue sapphire, surrounded by 14 solitaire diamonds, with a setting made from 18-carat white gold.
Replicas of it have been acquired by people across the globe, but for only a fraction of the price. How?
In 1837, Marc Antoine Gardin demonstrated that sapphires (mineralogically known as corundum or aluminium oxide) can be replicated by reacting metals with other substances such as chromium or boric acid. This produces a range of seemingly identical coloured stones.
On close examination, some properties may vary such as the presence of flaws and air bubbles and the stone’s hardness. But only a gemologist or gem enthusiast would likely notice this.
Diamonds can also be synthetically made, through either a high pressure, high temperature, or chemical vapour deposition process.
Creating synthetic gems is increasingly important as natural stones are becoming more difficult and expensive to source. In some countries, the rights of miners are also violated and this poses ethical concerns.
Medical and industrial applications
Synthetic gems have industrial applications too. They can be used in window manufacturing, semi-conducting circuits and cutting tools.
One example of an entirely manufactured mineral is something called yttrium aluminum garnet (or YAG) which can be used as a laser.
In medicine, these lasers are used to correct glaucoma. In dental surgery, they allow soft gum and tissues to be cut away.
The move to develop new minerals will also support technologies enabling deep space exploration through the creation of ‘quantum materials’.
Quantum materials have unique properties and will help us create a new generation of electronic products, which could have a significant impact on space travel technologies. Maybe this will allow us to one day visit the birthplace of Edscottite?
In decades to come, the number of human-made minerals is set to increase. And as it does, so too does the opportunity to find new uses for them.
By expanding our ability to manufacture minerals, we could reduce pressure on existing resources and find new ways to tackle global challenges.