From resource exporter to industrial powerhouse

The transformation of Australia’s industrial base begins upstream — at the point of extraction.

Mining is undergoing a profound technological shift, driven by the same forces reshaping processing and manufacturing: decarbonisation, automation, digitalisation and system integration. These changes are not incremental. They are redefining how resources are discovered, extracted and integrated into industrial value chains.

Next-generation mining systems are increasingly characterised by electrified equipment, autonomous operations and digitally enabled decision-making. Advances in sensing, data analytics and artificial intelligence are enabling real-time optimisation of extraction processes, improving productivity while reducing cost, waste and environmental impact.

Electrification of mining fleets — including haul trucks, drilling systems and materials handling — is a key pathway to reducing emissions at source. When combined with renewable energy systems, this enables the development of low-emissions mining operations that align with emerging global supply chain requirements.

At the same time, new approaches to orebody characterisation, precision extraction and in-situ processing are improving resource efficiency and reducing the physical footprint of operations. These technologies allow greater selectivity in mining, minimising waste and enabling higher-value recovery of critical minerals and co-products.

Digital integration is central to this transition. Future mining operations will increasingly function as connected systems, where geological data, processing performance, energy systems and logistics are linked through unified digital platforms. This enables optimisation not just within individual assets, but across entire value chains — from resource to refined product.

Australia is well positioned to lead in this domain.

The country has a globally competitive Mining Equipment, Technology and Services (METS) sector and a long track record of innovation in mining technologies. Building on this foundation, there is a significant opportunity to develop and deploy next-generation mining systems that are more efficient, lower emissions and better integrated with downstream processing and industrial infrastructure.

A key example is the UNSW-led Next Generation Mining (NextGen Min) ARC Industrial Transformation Research Hub, which brings together major mining companies and METS providers to develop the technologies, systems and operational models that will define the future of mining.

The NextGen Mine program focuses on areas including advanced automation, data-driven operations, integrated mine planning and low-emissions mining systems. Critically, it is not only advancing individual technologies, but also exploring how these can be integrated into coherent, system-level solutions that improve overall performance and sustainability.

This model of industry–research collaboration is essential. The scale and complexity of the transition require coordinated development, testing and deployment of new technologies in real-world operating environments.

For Australia, next-generation mining is not just about improving extraction.

It is about creating a fully integrated, low-emissions resource system — where mining, processing, energy and infrastructure are designed and optimised together.

This integration strengthens Australia’s competitive position across the value chain, enabling the production of lower-emissions, higher-value materials that meet the evolving requirements of global markets and allied supply chains.

Most mineral processing facilities operating globally today were designed for an era of low-cost fossil energy and relatively simple industrial configurations.

These models are increasingly misaligned with the requirements of a net zero economy. 

The next generation of processing systems will be electrified and powered by renewable energy, tightly integrated with surrounding infrastructure, and optimised using digital tools and real-time data. Rather than treating energy, processing and logistics as separate systems, they will be designed as a single, coordinated whole.

Emerging research platforms are already demonstrating how these next-generation processing systems can be realised in practice.

For example, UNSW’s Sustainable Processing of Critical Elements (SCOPE) initiative is developing new approaches to mineral processing that are more energy-efficient, modular and better suited to integration with renewable energy systems.

SCOPE focuses on rethinking conventional flowsheets through process intensification, electrification and advanced materials handling — enabling smaller-footprint, lower-emissions processing that can be deployed closer to resource extraction or within integrated industrial precincts.

These approaches are particularly relevant for critical minerals and complex ores, where traditional processing routes are often energy-intensive and difficult to scale efficiently. By reducing energy demand and improving process flexibility, they open up new pathways for economically viable, low-emissions value-adding in Australia.

This shift is not simply about reducing emissions. It is also about improving efficiency, lowering long-term costs and ensuring access to markets that increasingly prioritise low-emissions supply chains.

Australia has the opportunity to build these systems from the outset — rather than retrofitting outdated models.

Australia’s opportunity is not to replicate large-scale global manufacturing systems.

Instead, it lies in capturing greater value at the right stages of the production chain, particularly where it can leverage its advantages in energy, resources and technology.

A critical part of this opportunity is increasing the level of pre-processing undertaken in Australia.

In many mineral value chains, the most energy-intensive steps occur in the early stages of processing — converting raw materials into intermediate products such as refined concentrates or processed metals. These stages account for a significant share of both cost and emissions.

Australia’s potentential to create abundant renewable energy creates a structural advantage in performing these energy-intensive steps domestically.

For example, rather than exporting iron ore, there is growing potential to produce and export low-emissions or “green” iron. This shifts a substantial portion of the energy demand — and value creation — to Australia, while trade partners focus on production of steel products from the iron. 

This model aligns with the needs of energy-constrained economies, which may prefer to import intermediate products rather than undertake energy-intensive processing domestically.

Beyond pre-processing, there are also opportunities for targeted, high-value manufacturing linked to Australia’s strengths in materials and industrial systems.

This includes areas such as advanced battery materials, rare earth products, specialised alloys, next generation industrial processing equipment and components for clean energy and advanced technologies. These segments are knowledge-intensive and driven by innovation rather than scale alone.

The goal is not to move up the value chain indiscriminately, but to capture the stages where Australia can be globally competitive — particularly energy-intensive processing and selected high-value manufacturing.

The transition to value-added production is not only a technical challenge — it is fundamentally a capital challenge.

Developing new processing facilities requires large-scale, long-term investment under conditions of uncertainty. Projects must contend with technology risk, fragmented planning environments and intense global competition for capital.

In this context, investment will flow only to opportunities that are clearly defined, well-integrated and demonstrably viable.

The IID supports this process by improving investment readiness. By integrating system design, reducing technical risk and providing whole-of-system analysis, it helps translate complex industrial concepts into coherent, bankable projects.

There is also a clear shift in investor expectations. Capital is increasingly directed toward low-emissions, future-proofed assets that are aligned with long-term policy and market trends.

This is particularly true for energy-intensive pre-processing stages, where Australia’s clean energy advantage can materially improve project economics and investment attractiveness.

This dynamic is especially important for mid-scale and emerging developers, who are central to the development of new supply chains but often face structural barriers in accessing capital.

Australia’s critical minerals opportunity is inherently international.

Future supply chains will be shaped by partnerships with advanced manufacturing economies such as Japan, Korea and Europe.

These countries are seeking secure access to materials, lower-emissions production pathways and more resilient industrial systems. In many cases, they also face constraints — particularly in energy costs and emissions — that make domestic processing increasingly challenging.

Australia offers a complementary proposition. With access to resources, abundant renewable energy and a stable policy environment, it can provide a platform for lower-cost and lower-emissions processing, intermediate production and selective manufacturing within allied supply chains.

This creates opportunities for joint ventures, co-investment and long-term offtake agreements that link Australian production with global manufacturing systems.

In this context, Australia’s role is not to compete with advanced manufacturing economies, but to integrate with them as a low-emissions processing and manufacturing platform.

Australia’s industrial transition will not be built on new projects alone.

It will also depend on the evolution of existing operators — including major resource companies and established processing and manufacturing businesses.

Global mining companies such as Rio Tinto, BHP and Glencore already operate across integrated value chains, including processing and refining activities in Australia and internationally. These companies bring deep technical capability, global market access and experience in delivering large-scale industrial assets.

At the same time, companies such as Fortescue are actively pursuing new industrial pathways, including investments in green iron, hydrogen and low-emissions processing systems. These efforts highlight the growing strategic shift toward next-generation production models.

Across the sector, operators are increasingly investing in research, innovation and decarbonisation pathways, including long-standing collaborations with institutions such as UNSW. These partnerships are critical to advancing new processing technologies, improving efficiency and reducing emissions across both existing and future operations.

This is particularly evident across Australia’s metals sector, where major facilities such as BlueScope Steel’s Port Kembla Steelworks, Rio Tinto’s Boyne and Bell Bay aluminium smelters, the Tomago Aluminium smelter, and Glencore’s Mount Isa copper smelter are operating in a context of rising energy costs, tightening emissions requirements and strong global competition.

These dynamics are not unique to individual firms, but reflect broader structural pressures across energy-intensive industrial sectors.

The transition therefore requires a dual approach.

It involves supporting incumbents to modernise and decarbonise existing operations where viable, while also enabling new technologies and systems to be tested, demonstrated and deployed at scale. It also requires stronger collaboration between established operators and emerging developers, as well as alignment between research, infrastructure and long-term investment.

The IID works with industry to accelerate this transition — supporting innovation, system integration and the adoption of next-generation processing technologies across both existing and new industrial platforms.

Enabling a new generation of developers

Mid-scale and emerging developers, particularly in critical minerals such as rare earths and battery materials are also playing a vital role.

With less capital sunk in existing plant, these companies can be agile and open to adopting new technologies. They are also more closely aligned with the development of ESG-compliant processing systems and emerging markets and supply chains.

At the same time, they face significant challenges, including limited balance sheets, higher exposure to risk and fragmented development environments.

The IID works with this cohort to help overcome these barriers by supporting technology translation, enabling demonstration pathways and improving investment readiness.

In many cases, the most effective pathway will involve collaboration between emerging developers and major resource companies, combining innovation with scale.

The transition to net zero industry is not just a market opportunity — it is a coordination challenge.

Markets alone are not well suited to aligning the multiple systems required for industrial transformation, particularly where large-scale infrastructure, long time horizons and cross-jurisdictional issues are involved.

Government therefore plays a critical enabling role.

This includes improving and integrating planning processes, aligning policy settings across jurisdictions, supporting enabling infrastructure and reducing the risk associated with first-of-a-kind projects.

In this context, government’s role is not to replace markets, but to enable them to operate effectively at system scale.

The IID supports this process by providing the analytical, engineering and integration capability required to translate policy ambition into deliverable, investable industrial systems.

Australia retains important industrial capabilities in sectors such as steel, aluminium and copper, which have played a central role in regional economies and national development for decades.

However, many existing facilities were designed for earlier industrial conditions, including reliance on fossil energy and legacy production systems. As global markets shift toward lower-emissions production and more advanced technologies, these facilities face increasing pressure in terms of cost, competitiveness and long-term viability.

This creates a complex policy challenge.

Governments must balance the need to support existing industries, jobs and regional communities with the need to enable the next generation of industrial capability.

The transition is not about replacing one set of industries with another, but about managing a shift toward more competitive, lower-emissions and higher-value systems over time.

This includes supporting workforce transition, enabling new industries to emerge in existing regions, aligning infrastructure and investment with future industrial models, and ensuring that public support contributes to long-term competitiveness.

A clear and coordinated transition strategy is essential to ensure that Australia’s industrial base evolves in a way that is economically, socially and environmentally sustainable, and less reliant on increasingly fragile global supply chains. 

Industrial development is increasingly intertwined with digital infrastructure, automation and artificial intelligence.

High-performance computing is becoming a core capability, enabling more sophisticated system modelling, real-time optimisation and advanced manufacturing processes. At the same time, data centres are emerging as significant sources of energy demand and capital investment.

These trends reinforce the case for integrated industrial development.

Future heavy industrial precincts can combine processing, clean energy systems and digital infrastructure into a single, coordinated platform — improving efficiency, attracting investment and supporting new forms of industrial capability.