So why don't we do it anymore? I recall we shipped steel to the USA back in the seventies.
This would be a win-win. Create jobs. Sell refined materials at a higher price. Shipping becomes more efficient as you're not carrying useless tailings along with the valuable stuff.
Where does the output from the plant go?Australia exports most of our Aluminium metal production
Is it domestic?
There are currently four aluminium smelters operating in Australia producing Australian primary aluminium metal. Production was 1.58 million tonnes in 2018, of which 1.45 Mt was exported. Australia is the world’s sixth largest producer.
That 1.45 Mtpa export is worth around US$ 3.5 B.
We used to export 2 Mtpa until Geelong and Kurri Kurri closed in the last 10 years.
Realistically Australia should be making over 10 Mtpa of aluminium metal (from 100% of the alumina we currently make) as most of the ingredients come from Australia including the coal and at times gas and are exported to be smelted off-shore.
Also, it is a shame that we do not attempt to do this with some of the other resources (Eg rare earths, magnesium) or try to retain what we already do without threat of closure (eg Copper, Nickel)
I believe we still export steel to the US as does NZ (going by an interview from one of the US late night shows with NZ PM JA 2 years back).
I'll speak of aluminium as this is one I know best.
In 2000, China made around 10-20% of the world's aluminium and a major importer, the middle east was a significant producer but around 5% globally. Currently today there is 70mtpa made with nearly 40mtpa coming from China and 25% of the non-Chinese market comes from the Middle East (guess why I live here).
China is generally not competitive globally on price. They still import some alloys and generally only make enough to feed themselves and their govt has been proactive to stop dumping on global markets as it doesn't make sense to import energy and alumina and petroleum coke to then sell aluminium metal globally. China's demand is driven on the back of growing industry in China replacing manufacturing OS.
Aluminium is electrical energy intensive, each tonne requires 14,000 kW of electrons. Your house uses ~20kW a day. An aluminium smelter can also not be turned on and off, once live it normally remains so for its life until shut down. It may suffer from power outages and more than 3h will often see the potline frozen and it takes months and millions to bring it back. It also cannot ramp up significantly but can reduce load for short periods.
China makes nearly 100% of its aluminium burning coal, the middle east gas, however the KSA smelter often uses crude oil when gas demand in the country is high as most middle east countries are gas poor, apart from Qatar. Why the Abu Dhabi (UAE) is currently commissioning a nuclear power station (4000 MW) and Dubai Emirate will shortly start commissioning a 2400 MW coal power station. Guess where the fuel for both comes from....
Back to aluminium.
You need roughly 5-6t of bauxite to make 2t of alumina to make 1t of aluminium and you need 420kg of coke in the smelter to make the anodes.
Australia currently exports around 35 MTpa of bauxite, with about 60 MTpa consumed domestically.
The 60 MTpa is used to make alumina at refineries in Gladstone and SW of Perth making about 20 MTpa of alumina. Gove in NT has a bauxite mine and used to convert to alumina (5 MTpa) but was shut down by RTA following take over from ALCAN and despite billions in investment during the 2000's to be one of the biggest in the world found it uneconomic (was fueled by oil). Very high labour costs would not have helped and really a stupid place to build a complex refinery compared to Gladstone which gets its bauxite from Weipa.
Of the 20 Mtpa of alumina, we consume just 3 Mtpa to aluminium metal.
Indonesia issued a directive to China a few years back it will no longer solely export Bauxite and guess what, they now have an alumina refinery.
For me Australia should be capping the exports of minerals to force down stream processing or simply keep it for a raining day. YEs mining created jobs, but Wepia employs around 400 people to make around 20mtpa of bauxite. Boyne Smelter has 1000 direct employees and 1000's more in support industries, all well paid and uses just 2mtpa of Weipa's bauxite plus the 1000 jobs at QAL next door making the alumina for the smelter.
To help drive on shore demand, mined ore used domestically should not pay royalties. Likewise if the alumina from the refinery is used domestically, then there should be a further incentive. Most of the these plants are already tolling plants (refinery's and smelters) and as such pay no or very little corporate tax. Currently I believe only Weipa and Gove export Bauxite so simple, force another alumina refinery to be built domestically or give these operators 10 years notice to cease production.
Likewise the steel industry I think the iron ore export should be capped at 500mtpa, you want to mine more, then process it here to some degree for which there will be no mining royalty applied.