The mutual need to drive clean energy investment is set to foster closer ties between China and Australia, mining industry leaders said during the first visit Down Under by a Chinese premier since 2017.

Chinese Premier Li Qiang met Australian government and industry figures and visited various projects during a June 15–18 visit.

Australian government and industry have been fostering new mineral export markets since China banned and then relaxed restrictions on imports of Australian coal and copper in the past four years. Australian critical minerals hopefuls have also seen federal intervention in Chinese holdings in their share registries.

"Amid overall progress in the past decade, China-Australia relations also experienced some ups and downs," Li told the China-Australia CEO Roundtable on June 18 in Perth, according to a written address released by China's Ministry of Foreign Affairs. "Thanks to efforts from both sides, the relationship is returning to the right track, and showing a good momentum of steady improvement."

Li and Australian Prime Minister Anthony Albanese agreed to "continue or expand engagement" on bilateral trade, climate change, energy and environment, according to a June 17 statement from Australia's leader.

The need for clean energy technologies will "absolutely" drive closer ties between Australia and China to facilitate mining investment, Cheong Chew, vice president of the Western Australian Chinese Chamber of Commerce (WACCC), told S&P Global Commodity Insights.

"We are witnessing China buying the green energy metals we dig out of the ground, and we are also witnessing a lot of the transformation in China that we can learn from," said Chew, who is also executive manager for strategic supply at mining services company Thiess Pty. Ltd. "We can also work with [China] and cooperate to get things happening in Australia."

'Natural partners'

During Li's June 18 visit to the Kwinana lithium hydroxide plant, Tianqi Lithium Corp. CEO Frank Ha said the facility "serves as a bridge for leveraging the complementary advantages of both countries, enabling mutual learning and win-win cooperation, illustrating that China and Australia are indeed natural partners."

Tianqi's US$3 billion investment in the Kwinana plant and its ownership of the Talison lithium mine in Western Australia demonstrate the "potential for mutually beneficial collaboration between Australia and China, one that also supports global goals for decarbonization and diversification of critical minerals supply," Raj Surendran, CEO of Tianqi Lithium Energy Australia Pty. Ltd. (TLEA), said in a statement.

TLEA is a joint venture between China's Tianqi Lithium and Australia's IGO Ltd. All the lithium hydroxide produced at the plant will be exported to customers outside China for the electric vehicle battery market.

Strong trade ties

China has been Australia's largest trading partner, export market and source of imports for the past 15 consecutive years, and trade with China accounts for more than 30% of Australia's foreign trade, according to Li. The value of Western Australia's lithium concentrate exports to China grew 42-fold to A$19.8 billion between fiscal 2021 and fiscal 2023, according to the government of Western Australia.

Clean energy technologies and the metals required for them loom as a major focus of the next wave of resources collaboration between China and Australia.

On June 18, Li visited the Perth green technology and test facility of major iron ore producer Fortescue Ltd., which aims to provide 100 million metric tons per year of green iron metal to China, eliminating more than 200 MMt of carbon dioxide emissions.

Fortescue saw Li's visit as a "critical opportunity for Australia and China to engage as partners beyond Fortescue's advanced green iron ore developments, to create an Australia-Sino green iron metal supply chain," the miner said in a June 18 statement.

Building a supply chain to feed green iron metal to China would capitalize on the "abundance of solar and wind in Australia, the existing financial and technical capabilities of China's manufacturers of innovative green equipment, and Fortescue's green tech and iron ore supply," the statement said.

Opportunity for Chinese OEMs

Chew said challenged supply chains continue to make it difficult to procure goods from major non-Chinese original equipment manufacturers that Australia's miners have relied on for decades. He said Chinese OEMs have been uncertain about engaging with Australian projects amid the trade tensions between the countries, but "this relationship will see better engagement from both sides" following Li's visit.

"Being a contractor, we cannot afford to have equipment on downtime just waiting for parts, and the [hassles with the] related costs," Chew said.

Li told the roundtable that "decades of experience shows time and again that both our economies benefit when our economic and trade cooperation is sound and stable; and both economies suffer when our cooperation is in trouble. China's development is an opportunity, not a challenge, for Australia."

"Australia is rich in mineral resources ... [whereas] China, on its part, has a super-sized market of 1.4 billion people, a complete industrial system, abundant high-caliber innovators, and diverse scenarios for the application of innovations," Li said. "Through cooperation, we can turn our complementarity into a robust momentum of development in both countries."