Vital Signs: yes, we need to make things in Australia, but not like in the past



Shutterstock

Richard Holden, UNSW

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.




Read more:
Albanese promises $20 billion plan to modernise electricity grid, and $6.2 billion for childcare


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.




Read more:
Holden’s dead end shows government policy should have taken a different road


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”.




Read more:
Medical supply chains are fragile in the best of times and COVID-19 will test their strength


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.The Conversation

Richard Holden, Professor of Economics, UNSW

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Government extends assistance for first home buyers to stimulate building industry


Michelle Grattan, University of Canberra

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:The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

$400 million in government funding for Hollywood, but only scraps for Australian film



Marvel Studios

Jo Caust, University of Melbourne

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.




Read more:
Queensland has saved a Hollywood blockbuster, but the local film industry is still missing out


Global incentives

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”.

Aquaman holds a gold staff.
Aquaman was filmed on the Gold Coast.
Warner Bros

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.

Very rich people stand in a very posh room.
The Great Gatsby was filmed in Sydney.
Warner Bros

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.




Read more:
The arts needed a champion – it got a package to prop up the major players 100 days later


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.




Read more:
Coronavirus TV ‘support’ package leaves screen writers and directors even less certain than before


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.The Conversation

Jo Caust, Associate Professor and Principal Fellow (Hon), School of Culture and Communication, University of Melbourne

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Matt Canavan says Australia doesn’t subsidise the fossil fuel industry, an expert says it does


Jeremy Moss, UNSW

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:

Senator Matt Canavan on ABC Q&A.
ABC Q&A1.59 MB (download)

So let’s take a look at what the Australian government contributes to the fossil fuel industry, and whether this makes financial sense.

Do fossil fuels need government support more than renewable sources of energy?
Justin McKinney/Shutterstock

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.

For example, the IMF paper includes subsidising the costs of fuels used to extract resources, accelerated depreciation for assets and funding for fossil fuel export projects.




Read more:
Morrison government dangles new carrots for industry but fails to fix bigger climate policy problem


Estimates by other organisations of the annual federal subsidies for the fossil fuel industry range from A$5 billion to A$12 billion a year.

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.

Given the scale of the climate crisis, the Morrison government’s fossil fuel subsidies don’t make sense.
AAP

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.




Read more:
Yes, carbon emissions fell during COVID-19. But it’s the shift away from coal that really matters


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.The Conversation

Jeremy Moss, Professor of Political Philosophy, UNSW

This article is republished from The Conversation under a Creative Commons license. Read the original article.

What COVID-19 means for the people making your clothes



Shutterstock

Sarah Kaine, University of Technology Sydney; Alice Payne, Queensland University of Technology, and Justine Coneybeer, Queensland University of Technology

Workers everywhere are feeling the impact of COVID-19 and the restrictions necessitated by COVID-19.

In Australia, retail and hospitality workers have been particularly hard hit. In other countries, it’s manufacturing workers, hit by disruptions to value and supply chains.

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.




Read more:
The real economic victims of coronavirus are those we can’t see


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.


Alice Payne

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.

In Australia retailers such as Country Road, Cotton On and RM William temporarily closed, taking short-term retail job losses to 50,000 or more.

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.




Read more:
Human trafficking and slavery still happen in Australia. This comic explains how


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

Reports of losses of tens of thousands of jobs in Myanmar and Cambodia paint a bleak picture.

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.




Read more:
Three years on from Rana Plaza disaster and little improvement in transparency or worker conditions


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.




Read more:
It would cost you 20 cents more per T-shirt to pay an Indian worker a living wage


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.The Conversation

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

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Once the pandemic is over, we will return to a very different airline industry


Volodymyr Bilotkach, Singapore Institute of Technology

The airline industry will wear the scars of the coronavirus pandemic for a very long time.

On Thursday, Qantas announced it was grounding its entire international fleet. American Airlines suspended three quarters of its long haul international flights on Monday.

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.




Read more:
Grattan on Friday: We are now a nation in self-isolation


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).

Three options

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.




Read more:
Is cruising still safe? Will I be insured? What you need to know about travelling during the coronavirus crisis


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.

Smaller airlines might miss out on government support.
DAN PELED/AAP

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.The Conversation

Volodymyr Bilotkach, Associate Professor, Singapore Institute of Technology

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Our ability to manufacture minerals could transform the gem market, medical industries and even help suck carbon from the air



Pictured is a slag pile at Broken Hill in New South Wales. Slag is a man-made waste product created during smelting.
Anita Parbhakar-Fox, Author provided

Anita Parbhakar-Fox, The University of Queensland and Paul Gow, The University of Queensland

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.

Modern-day alchemy

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.




Read more:
Climate explained: why carbon dioxide has such outsized influence on Earth’s climate


Nesquehonite occurs naturally when magnesian rocks slowly break down. It has been identified at the Paddy’s River mine in the Australian Capital Territory and locations in New South Wales.

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.

This is a backscattered electron microscope image of historical slag collected from a Rio Tinto mine in Spain.
Image collected by Anita Parbhakar-Fox at the University of Tasmania (UTAS)

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.




Read more:
Wealth in waste? Using industrial leftovers to offset climate emissions


Ethically-sourced jewellery

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.

Synthetic diamonds have essentially the same chemical composition, crystal structure and physical properties as natural diamonds.
Instytut Fizyki Uniwersytet Kazimierza Wielkiego

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?




Read more:
How quantum materials may soon make Star Trek technology reality


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.The Conversation

Anita Parbhakar-Fox, Senior Research Fellow in Geometallurgy/Applied Geochemistry, The University of Queensland and Paul Gow, Principal Research Fellow, The University of Queensland

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Space can solve our looming resource crisis – but the space industry itself must be sustainable


Richard Matthews, University of Adelaide

Australia’s space industry is set to grow into a multibillion-dollar sector that could provide tens of thousands of jobs and help replenish the dwindling stocks of precious resources on Earth. But to make sure they don’t flame out prematurely, space companies need to learn some key lessons about sustainability.

Sustainability is often defined as meeting the needs of the present without compromising the ability of future generations to meet their own needs. Often this definition is linked to the economic need for growth. In our context, we link it to the social and material needs of our communities.

We cannot grow without limit. In 1972, the influential report The Limits to Growth argued that if society’s growth continued at projected rates, humans would experience a “sudden and uncontrollable decline in both population and industrial capacity” by 2070. Recent research from the University of Melbourne’s sustainability institute updated and reinforced these conclusions.

Our insatiable hunger for resources increases as we continue to strive to improve our way of life. But how does our resource use relate to the space industry?




Read more:
Dig deep: Australia’s mining know-how makes it the perfect $150m partner for NASA’s Moon and Mars shots


There are two ways we could try to avert this forecast collapse: we could change our behaviour from consumption to conservation, or we could find new sources to replenish our stocks of non-renewable resources. Space presents an opportunity to do the latter.

Asteroids provide an almost limitless opportunity to mine rare earth metals such as gold, cobalt, nickle and platinum, as well as the resources required for the future exploration of our solar system, such as water ice. Water ice is crucial to our further exploration efforts as it can be refined into liquid water, oxygen, and rocket fuel.

But for future space missions to top up our dwindling resources on Earth, our space industries themselves must be sustainable. That means building a sustainable culture in these industries as they grow.

How do we measure sustainability?

Triple bottom-line accounting is one of the most common ways to assess the sustainability of a company, based on three crucial areas of impact: social, environmental, and financial. A combined framework can be used to measure performance in these areas.

In 2006, UTS sustainable business researcher Suzanne Benn and her colleagues introduced a method for assessing the corporate sustainability of an organisation in the social and environmental areas. This work was extended in 2014 by her colleague Bruce Perrott to include the financial dimension.

This model allows the assessment of an organisation based on one of six levels of sustainability. The six stages, in order, are: rejection, non-responsiveness, compliance, efficiency, strategic proactivity, and the sustaining corporation.

Sustainability benchmarking the space industry

In my research, which I presented this week at the Australian Space Research Conference in Adelaide, I used these models to assess the sustainability of the American space company SpaceX.

Using freely available information about SpaceX, I benchmarked the company as compliant (level 3 of 6) within the sustainability framework.

While SpaceX has been innovative in designing ways to travel into space, this innovation has not been for environmental reasons. Instead, the company is focused on bringing down the cost of launches.

SpaceX also relies heavily on government contracts. Its profitability has been questioned by several analysts with the capital being raised through the use of loans and the sale of future tickets in the burgeoning space tourism industry. Such a transaction might be seen as an exercise in revenue generation, but accountants would classify such a sale as a liability.

The growing use of forward sales is a growing concern for the industry, with other tourism companies such as Virgin Galactic failing to secure growth. It has been reported that Virgin Galactic will run out of customers by 2023 due to the high costs associated with space travel.




Read more:
NASA and space tourists might be in our future but first we need to decide who can launch from Australia


SpaceX’s culture also rates poorly for sustainability. As at many startups, employees at SpaceX are known to work more than 80 hours a week without taking their mandatory breaks. This problem was the subject of a lawsuit settled in 2017. Such behaviour contravenes Goal 8 of the UN Sustainable Development Goals, which seeks to achieve “decent work for all”.

What’s next?

Australia is in a unique position. As the newest player in the global space industry, the investment opportunity is big. The federal government predicts that by 2030, the space sector could be a A$12 billion industry employing 20,000 people.

Presentations at the Australian Space Research Conference by the Australian Space Agency made one thing clear: regulation is coming. We can use this to gain a competitive edge.




Read more:
From tourism to terrorists, fast-moving space industries create new ethical challenges


By embedding sustainability principles into emerging space startups, we can avoid the economic cost of having to correct bad behaviours later.

We will gain the first-mover advantage on implementing these principles, which will in turn increase investor confidence and improve company valuations.

To ensure that the space sector can last long enough to provide real benefits for Australia and the world, its defining principle must be sustainability.The Conversation

Richard Matthews, Research Associate | Councillor, University of Adelaide

This article is republished from The Conversation under a Creative Commons license. Read the original article.

India has it right: nations either aim for the Moon or get left behind in the space economy



India’s Chandrayaan-2 Moon mission blasts off from Satish Dhawan Space Centre in Sriharikota, India, on 22 July 2019.
Indian Space Research Organisation/EPA

Nicholas Borroz, University of Auckland

India’s Chandrayaan-2 spacecraft has settled into lunar orbit, ahead of its scheduled Moon landing on September 7. If it succeeds India will join a very select club, now comprising the former Soviet Union, the United States and China.

As with all previous Moon missions, national prestige is a big part of India’s Moon shot. But there are some colder calculations behind it as well. Space is poised to become a much bigger business, and both companies and countries are investing in the technological capability to ensure they reap the earthly rewards.

Last year private investment in space-related technology skyrocketed to US$3.25 billion, according to the London-based Seraphim Capital – a 29% increase on the previous year.

The list of interested governments is also growing. Along with China and India joining the lunar A-list, in the past decade eight countries have founded space agencies – Australia, Mexico, New Zealand, Poland, Portugal, South Africa, Turkey and the United Arab Emirates.

China’s Chang’e 4 spacecraft landed on the far side of the Moon on 11 January 2019. This image taken with the lander’s camera shows the mission’s lunar rover Yutu-2, or Jade Rabbit 2.
China National Space Administration/EPA

Of prime interest is carving out a piece of the market for making and launching commercial payloads. As much as we already depend on satellites now, this dependence will only grow.

In 2018 382 objects were launched into space. By 2040 it might easily be double that, with companies like Amazon planning “constellations”, composed of thousands of satellites, to provide telecommunication services.

The satellite business is just a start. The next big prize will be technology for “in-situ resource utilisation” – using materials from space for space operations. One example is extracting water from the Moon (which could also be split to provide oxygen and hydrogen-based rocket fuel). NASA’s administrator, Jim Bridenstine, has suggested Australian agencies and companies could play a key role in this.




Read more:
Australia: well placed to join the Moon mining race … or is it?


All up, the potential gains from a slice of the space economy are huge. It is estimated the space economy could grow from about US$350 billion now to more than US$1 trillion (and as possibly as much US$2,700 billion) in 2040.

Launch affordability

At the height of its Apollo program to land on the Moon, NASA got more than 4% of the US federal budget. As NASA gears up to return to the Moon and then go to Mars, its budget share is about 0.5%.

In space money has most definitely become an object. But it’s a constraint that’s spurring innovation and opening up economic opportunities.

NASA pulled the pin on its space shuttle program in 2011 when the expected efficiencies of a resusable launch vehicle failed to pan out. Since then it has bought seats on Russian Soyuz rockets to get its astronauts into space. It is now paying SpaceX, the company founded by electric car king Elon Musk, to deliver space cargo.

SpaceX’s Crew Dragon spacecraft just moments after undocking from the International Space Station on 8 March 2019.
NASA/EPA

SpaceX’s stellar trajectory, having entered the business a little more than a decade ago, demonstrates the possibilities for new players.

To get something into orbit using the space shuttle cost about US$54,500 a kilogram. SpaceX says the cost of its Falcon 9 rocket and reuseable Dragon spacecraft is about US$2,700 a kilogram. With costs falling, the space economy is poised to boom.




Read more:
How SpaceX lowered costs and reduced barriers to space


Choosing a niche

As the space economy grows, it’s likely different countries will come to occupy different niches. Specialisation will be the key to success, as happens for all industries.

In the hydrocarbon industry, for instance, some countries extract while others process. In the computer industry, some countries design while others manufacture.
There will be similar niches in space. Governments’ policies will play a big part in determining which nation fills which niche.

There are three ways to think about niches.

First, function. A country could focus on space mining, for instance, or space observation. It could act as a space communication hub, or specialise in developing space-based weapons.

Luxembourg is an example of functional specialisation. Despite its small size, it punches above its weight in the satellite industry. Another example is Russia, which for now has the monopoly on transporting astronauts to the International Space Station.

Russian cosmonaut Alexey Ovchinin flanked by NASA astronauts Christina Koch and Nick Hague at the Gagarin Cosmonaut Training Center in Star City, Russia, as they prepare for their launch aboard the Soyuz MS-12 in March 2019.
Sergei Ilnitsky/EPA

Second, value-adding. A national economy can focus on lower or higher value-add processes. In telecommunications, for example, much of the design work is done in the United States, while much of the manufacturing happens in China. Both roles have benefits and drawbacks.

Third, blocs. Global production networks sometimes fragment. One can already see the potential for this happening between the United States and China. If it occurs, other countries must either align with one bloc or remain neutral.

Aligning with a large power ensures patronage, but also dependence. Being between blocs has its risks, but also provides opportunities to gain from each bloc and act as an intermediary.




Read more:
The economic reasons why Australia needs a stronger space industry


The first space race, between the Soviet Union and the United States, was singularly driven by political will and government policy. The new space race is more complex, with private players taking the lead in many ways, but government priorities and policy are still crucial. They will determine which countries reach the heights, and which get left behind.The Conversation

Nicholas Borroz, PhD candidate in international business and comparative political economy, University of Auckland

This article is republished from The Conversation under a Creative Commons license. Read the original article.

To be a rising star in the space economy, Australia should also look to the East



Diversifying its space partners could help Australia avoid getting pushed around by the space rivalry of China and the United States.
Alex Cherney/CSIRO/EPA

Nicholas Borroz, University of Auckland

The UK’s space agency is already planning for spaceflights to Australia, taking just 90 minutes. This week it announced the site of its first “spaceport”.

Where exactly a spacecraft might land in Australia is still anyone’s guess.

Australia wants to become a bona fide space power in the emerging space economy – exemplified by the rise of private space companies such as SpaceX, Virgin Galactic, Blue Origin and others.

But the UK Space Agency’s well-developed plans to build Europe’s first spaceport in Cornwall, southwest England, as well as another to launch rockets carrying micro-satellites in Sutherland, north Scotland, shows the Australian venture has a lot more groundwork to do.




Read more:
Ten essential reads to catch up on Australian Space Agency news


The Australian government founded the Australian Space Agency just one year ago. It is about to invest tens of millions of dollars in international space projects.

But right now, it could be argued, it has a large problem: How will Australia connect to the rest of the international space economy?

Focused on old friends

Before the Australian Space Agency was founded, Australia’s main international relations regarding outer space were with the United States and some European countries. It has long hosted ground stations for NASA and the European Space Agency.

It has cooperated with other international partners to a lesser extent. The most notable project is the Square Kilometre Array, an astronomy project being built in Australia and South Africa. International partners include Canada, China, India and New Zealand.

Though Australia has indicated it wants to “open doors internationally” for space partnerships, so far it has been focused on building up ties with its old friends in the US and Europe.

The Australian Space Agency has been talking to NASA about cooperation, including on NASA’s Lunar Gateway effort to build a permanent presence on the Moon. It has signed statements of strategic intent with Boeing and Lockheed Martin, two large American aerospace firms that are NASA contractors. A private northern Australian rocket launch company reports it is negotiating to launch NASA sounding rockets next year.




Read more:
NASA and space tourists might be in our future but first we need to decide who can launch from Australia


The US communications firm Viasat plans to build a ground station near Alice Springs. American universities are the only foreign partners of Australia’s newly opened CubeSat and unmanned aerial vehicle research centre, CUAVA.

With the Europeans, the Australian Space Agency has signed memoranda of understanding with France and Britain. The Italian space company SITAEL has expanded to Adelaide, where the Australian Space Agency is based. The federal government’s new SmartSat cooperative research centre has a consortium of nearly 100 industry and research partners. One is the European aerospace giant Airbus, with which the Australian Space Agency has also signed a statement of strategic intent.

These are still early days, but outside of partnerships with the Americans and Europeans, the only major international developments since the Australian Space Agency’s founding are with Canada and the United Arab Emirates.

Ties with China and India

So should Australia diversify its relations?

On the one hand, tying Australia’s space economy to the Americans and Europeans makes sense. Both have large markets and developed space industries. Close ties to both will likely ensure a steady stream of business.

On the other hand, there are benefits to pursuing a new type of multilateralism that is less US- or Euro-centric.

Through the Square Kilometre Array project, Australia has links with China and India. Compared to the Americans and Europeans, these two countries have different competitive strengths in the global space industry.




Read more:
To carve out a niche in space industries, Australia should focus on microgravity research rockets


Positioning between them could put Australia in a unique place in the global production networks of space science and technology. This is particularly so if relations between some of these larger players are distant (the United States and China, for example). Australia could benefit from being a go-between.

Australia could also choose to supplement these larger relationships with ties to smaller countries. Especially with other new entrants into the space economy – New Zealand established a space agency in 2016, for example – there are common points of interest.

All are likely to want to diversify relationships with big space powers and not be pushed into dealing with just one or another. Again, friction between the United States and China comes to mind. Smaller space powers could band together to maintain their ability to make their own independent decisions.

There is no right answer about how Australia should proceed with international engagement in the space economy. More accurately, there are different right answers depending on what sort of space power Australia ultimately wants to become.

Australia’s space agency is just one year old. The country does not need to automatically continue its Western orientation. It can instead recreate itself as a truly international actor in the new space economy.The Conversation

Nicholas Borroz, PhD candidate in international business and comparative political economy, University of Auckland

This article is republished from The Conversation under a Creative Commons license. Read the original article.