Critical Minerals Strategy 2023: discussion paper

Rio Tinto Limited
Level 43
Australian Government Department of 120 Collins Street
Industry, Science and Resources Melbourne VIC 3000
Australia
Submission via the Department’s Consultation Hub T +61 (0) 3 9283 3333
F +61 (0) 3 9283 3707
3 February 2023

Re: Critical Minerals Strategy 2023: Discussion Paper

Rio Tinto welcomes the opportunity to make a submission to the Department of Industry, Science and Resources (“the Department”) on Australia’s Critical Minerals Strategy: Discussion Paper (the
“Paper”).

The Paper discusses the role of critical minerals in supporting clean energy technologies and considers how Australia might capture global clean energy opportunities by expanding the critical minerals sector into downstream processing. Rio Tinto supports the Government’s development of a new Critical Minerals Strategy with the objective of ensuring the right policy settings are in place to advance the critical minerals sector. Given Australia’s broad resource endowment and partner country interests in a wide variety of critical minerals, Rio Tinto recommends further investigation into the different clean energy minerals and metals, and the position in the value chain, that could provide the most economic, social and strategic partnership value to Australia. This could support a widening of our definition of critical minerals – for example, to include aluminium (including alumina and bauxite) and copper, which are on critical minerals lists of various partner countries – especially given their role in the energy transition and the likelihood of their increasing criticality based on projected global demand. This would better capture the strategic and economic opportunities for
Australia in light of the Paper’s broader objectives of Australia becoming a clean energy superpower and contributing to a strong future for the resources sector.

As the world’s second largest global diversified mining company and a very significant producer of minerals and metals in Australia and across the globe, Rio Tinto is uniquely positioned to continue producing materials essential for the clean energy transition. This includes via mining or otherwise supplying critical minerals based on our existing access to resources (including ores, tailings and other waste streams), processing infrastructure, and technical knowledge. Accordingly, we believe we have an important role to play in ensuring that the clean energy transition is progressed as quickly as possible and in a fair and socially inclusive way.

Our detailed submission is set out in the introduction and responses to the Paper’s questions below.
Rio Tinto looks forward to engaging further with the Department on the content of the Paper and we would welcome the opportunity to discuss this submission with you further. In the interim, please direct any queries to Jaeson Wells (jaeson.wells@riotinto.com).

Yours sincerely

Kellie Parker, Chief Executive Australia Sinead Kaufman, Chief Executive Minerals
Introduction

Rio Tinto operates in 35 countries, mining and processing the materials that are essential for a low-carbon transition. Australia is home to our largest operational presence and more than half of our global assets, and we have operated here for more than 100 years. We produce iron ore, bauxite, alumina, aluminium, and salt at sites and processing plants around the country. We are a major employer within Australia, with more than 22,500 employees, including over 1,500 Indigenous
Australians, and providing jobs for thousands more within our supply chain and associated industries.

Our purpose is to find better ways to provide the materials the world needs. We use some of the most advanced exploration technologies in the world to find potential new sources of minerals and metals. We consider new commodities and products with an understanding of our customers’ and communities’ needs and are mindful of our potential future social and environmental impact as well as the diversity and balance of our portfolio.

The communities where we live and work are fundamental to our business. They include Indigenous peoples, landowners, governments, business partners, civil society groups, neighbours and our colleagues. We aim to contribute to a shared future and positive legacy by developing lasting relationships with people, learning about and supporting their goals and aspirations, avoiding or mitigating adverse impacts and respecting connections to land.

Australia has the natural resources, industry, experience, and R&D required to drive the clean energy transition and extract maximum potential for our industry to the benefit of Australia.
Reaching net-zero emissions globally will ultimately rely on increasing the supply of a range of metals and minerals supporting the development of clean technologies and associated infrastructure.

At Rio Tinto, we have put the net-zero transition at the heart of our business strategy: combining investments in commodities that enable the energy transition with actions to decarbonise our operations and value chains.

Each commodity we produce has a vital role to play in the low-carbon transition. Copper and aluminium demand will rise with the renewable electrification of energy, and lithium will be a fundamental ingredient in electric vehicle batteries and grid-firming energy storage solutions.
Demand for aluminium will also grow for uses like energy-efficient lightweight vehicles, and steel will also be essential in a range of infrastructure applications, from high-speed rail networks, to wind and solar support structures, electrical transmission and other energy transition related facilities.

We have an ambition to build on our existing position in minerals and metals that will support the energy transition, including copper, aluminum and iron ore, and to become a significant player in battery materials such as lithium and nickel. To this end we established a global Battery Materials business in October 2021, led from Australia. We are also experienced in producing numerous minerals and metals that are listed in Australia’s current Critical Minerals Strategy, including cobalt, lithium, platinum-group elements, rare-earth elements, rhenium and scandium, as well as various other minerals and metals on other country critical minerals and critical materials lists, including
aluminium, copper and titanium as well as key materials for semiconductors such as gallium, indium and tellurium. Some of these critical minerals are produced as co-products through the utilisation of circular economy and other innovative practices, underpinned by our expertise at our Bundoora
Technical Development Centre.

The Paper notes the world cannot reach net-zero by 2050 without mining. But the mining industry is facing a conundrum where the positive aspects of mining – namely the production of critical minerals to underpin a low carbon future – are offset by environmental and social risk that may impede both current mining and exploration activities as well as future metal and mineral production. While it is the industry’s responsibility to maintain its social license to operate and to share stories about its relevance and impact, there is a role for Government in educating the public on the central role that the mining sector will play in the energy transition. Clean energy technologies will require more critical minerals than their traditional counterparts and this will mean a concerted effort will also be required to ensure Australia has the right skills and qualifications to capture global clean energy opportunities.
Responses to Discussion Paper Questions

1. How can Australia capitalise on its existing advantages to create economic opportunity for all
Australians – particularly regional communities and First Nations Peoples?

Rio Tinto is committed to helping build a stronger, more prosperous Australia – and we are proud to play our part in helping the nation grow. Most mining operations are located in regional or remote parts of Australia. In the Pilbara region of Western Australia, we own an integrated portfolio of iron ore assets: a world-class, integrated network of 17 mines. Our Weipa operations in far north
Queensland include three bauxite mines, processing facilities, ship loaders, an export wharf, two ports, power stations, a rail network and ferry terminals. Our Gove operations in the Northern
Territory have been supplying the global aluminium industry with world-class bauxite for more than
40 years.

We are one of the largest employers of Indigenous Australians, with more than 1,500 Indigenous employees and contractors working across our Australian business, but we recognise that we have more work to do to increase representation in professional and leadership roles. We are investing
$50 million over five years to attract, retain and grow Indigenous professionals and leaders in
Australia, and we have increased the number of Australian Indigenous leaders in our business five- fold since November 2020. We have also developed a national cultural competence programme which was launched in 2021 and will continue to be delivered to our leaders across our business.

An important underlying principal is that Indigenous people should have a seat at the table and be genuinely consulted in order to ensure that the right kind of economic and social benefits result that fit with genuine community needs and capabilities.

More broadly, for Australia – as the Paper notes – there is a narrow window of opportunity to capitalise on global critical minerals demand. As a source of new opportunity, it is important to promote and leverage the work Australia has done in positioning itself as a leading supplier of critical minerals and to continue to build momentum. There are significant global and regional opportunities for early movers and with that comes significant economic, social and strategic partnership benefits to claim. Australia is well positioned with a world-leading resources sector to extend that and consolidate itself as a world-leader in the supply of critical minerals.

However, sourcing and developing the skilled workforce that Australia needs for today and tomorrow will be critical to meeting current and future international demand for minerals and metals. We believe collaboration between the Commonwealth, State and Territory governments, companies, and Australia’s leading educational institutions, would deliver effective and innovative learning and development frameworks to support the creation of high-calibre jobs. It would also strengthen attractive and transferable career pathways across the mineral resources industry. In the short-term, utilising transferrable pathways is an option that holds promise as it grows the talent pool with transferrable skills from outside the sector. This is an approach we have successfully trialled to bring more women leaders into Rio Tinto.

There will also need to be a comprehensive understanding of the regulatory landscape that will come with the energy transition and growing of Australia’s critical minerals and metals sector. There
will be increasing pressures placed on regulators as new mine sites are developed and large-scale solar and wind plants come online. Addressing this will also need to be balanced with ensuring the regulatory environment provides the sector with an ability to attract scarce capita and does not create additional layers or complexity between the State and Federal levels.

2. What could be done to facilitate project development and ensure benefits flow to regional communities?

Any approach to providing greater and more resilient supply of critical minerals needs to be multi- faceted. Further, as referenced above, time is of the essence as different countries and companies are currently making significant investment decisions that will have long term industrial and trade implications.

To facilitate supply in the more immediate term, especially in more regional communities, it will be important to leverage Australia’s existing mining-related infrastructure, whether mines (including mines with critical minerals co-mingled in the ores), processing facilities, enabling infrastructure
(such as roads and energy facilities), and technical know-how. This in turn will give positive signals to future investors that Australia will continue to be a leading jurisdiction for the supply of critical minerals.

Facilitating supply in the immediate term usually leverages a circular economy approach, with shorter timeframes, lower capex and superior ESG outcomes. This also reduces uncertainty for the supply of critical minerals that are often subject to poorly functioning markets.

For longer term supply, it is important to ensure that policy settings and relationships are continually checked and enhanced. This ranges from updating Australia’s critical minerals list, to enhancing its regulation of exploration and permitting, industrial policy, taxation policy, and R&D incentives, in order to give investors greater confidence.

It is important to note that it has taken a long time for current positions in critical minerals to be built, and that it is difficult to change current positions quickly, particularly in the resources sector with long timeframes and high capital costs, and where processing know-how is difficult to develop quickly. Long-term commitment and dedication are required. From the inception of an exploration program, it takes on average one decade to deliver a new discovery, and then a further 10 to 15 years to take that through to first mined production. Therefore, the imperative for exploration is to be active throughout the mining investment cycle, to ensure a high-quality product to sustain and grow the industry and meet long-term demand.

From a regional community perspective, it is important that suppliers of critical minerals (miners, processors and other service providers) engage early with communities to understand their needs, mitigate and manage negative impacts, and ensure potential economic and social benefits (including the production of essential materials, employment, small business development, tax and royalty streams, training and skills development, and socioeconomic programmes) are optimised.

3. What might be done to ensure maximum reasonable opportunity for local employment and local business participation in projects?
Wherever we are in Australia, we strive to employ local people, buy local products and engage local services. In 2019, we worked with 7,700 businesses across Australia. At our Gudai-Darri (Koodaideri) iron ore project, we awarded around A$60 million of work to Aboriginal businesses in the Pilbara in
2019 and we are proud that Western Australia’s first Indigenous owned and operated quarry will supply 600,000 tonnes of ballast to build our rail line.

But we are always looking for ways we can do more. We have local procurement targets at each of our sites and offer career pathway programmes too, like our Paid School Leavers programme in Weipa which provides trainee and apprenticeship opportunities for local Aboriginal people. In
Central Queensland, we contributed to the Here for Gladstone programme including initiatives aimed at providing job opportunities and helping local businesses grow. And in Western Australia, the Rio Tinto Buy Local programme makes it easier for local businesses to bid for work with us and to help build the capabilities of local industry through training and networking opportunities.

Actions could be to:

• Reposition the image of the resources industry Australia-wide, including through the lens of
clean energy and critical minerals. Through national promotional campaigns, demonstrate
the value mining operations bring to communities.
• Address structural weaknesses within the higher education sector, particularly with regard
to the VET sector, meaningfully influencing educational pathways of all high school
students, and addressing the low level of student enrolments in STEM as an essential area
of focus.
• Redesign segmented and long-term programs (i.e. apprenticeships, degrees) to support
continuous learning. Move to shorter modules which are able to be accessed via flexible
delivery methods such as online learning, are linked to specific qualifications, connected to
real work opportunities, and recognise existing experience.
• Increase investment and collaboration in meaningful education programs – from early and
tertiary education to providing opportunities for businesses – that benefit the wider
Indigenous community, and support employment, education and training to help develop
the next generation of Indigenous leaders.
• Build business capacity and capability to compete in procurement processes.
• Work with industry to identify ways to further build the nation’s capability in areas of
technology being advanced by resources companies, such as automation, data analytics and
artificial intelligence.

4. What role can Government play to help ensure the sector maximises gender equality?

We know that having an inclusive and diverse workforce improves performance and we continue to focus on the representation of women across all levels at Rio Tinto. We are actively seeking out opportunities to support the leadership and career development of Indigenous women and girls.

Rio Tinto welcomes the Government’s announcement in October 2022 to invest $7 billion to promote women’s economic equality and more recent efforts in Parliament to close the gender pay gap. We also note the role of Government in supporting the Respect@Work Report recommendation implementation to ensure the sector can provide a safe, inclusive and respectful
environment. Rio Tinto supports all recommendations in the Report and views it as a good blueprint to advance gender equality in the workplace.

Government support for gender equality in the innovation and education sectors will also have flow on impacts to gender equality within the minerals and mining sector.

5. What are the specific opportunities Australia should seek to realise while developing downstream processing and manufacturing capabilities?

Australia should look to leverage existing infrastructure and other comparative advantages, including where capex has already been sunk. The aluminium industry is one where there is already vertical integration.

As referenced in Question 2, critical minerals are often co-incident with non-critical minerals that form the basis of an economic project. Australia should focus on maximising the recovery/value of critical minerals from mining. This could create niche downstream capabilities or be extended to finding a way to recognise the strategic value in supplying critical minerals co-mingled with other metals to partner countries. For example, Australia could play a key role in gallium extraction from our alumina plants. Gallium is used in high-speed switching and is key to 5G networks. The world’s gallium largely comes from one market.

6. For key technologies and value chains, such as batteries, magnets, alloys and other clean energy technologies, what are the key obstacles to Australia moving up the value chain?

The countries with the most advanced technology will be leading the extraction and processing of critical minerals. At present there are capability limitations in Australia covering research, education and training, and industrial experience. Education positions are required for workforce gaps and programs are needed to encourage industry to undertake in-kind capability activities with research partners to create pathways to transfer people into the workforce.

Minerals engineering student enrolment numbers across Australia have been at the lowest level for more than 20 years. If the downward trend continues, universities will have to discontinue those programs. If the decision is taken to discontinue a program, re-establishing would be extremely difficult, costly and painful. Historically, minerals engineering student numbers trend followed the commodity prices; but this is no longer the case. The impact of low student numbers will cause significant challenges for the industry and hence Australia.

Sizeable government investment or tax benefits will be required to address these obstacles and also to catalyse private sector co-investment. An option could be to introduce the idea of National science agencies actively licensing relevant IP for trial/use within Australia (only, or at least in the first instance) to demonstrate commercialisation within the region. Another option could be to promote Australia as the ‘start-up’ leader within the critical minerals landscape. Such initiatives would also benefit from better collaboration between universities, industry and governments.

We need Australian based OEMs to drive the need to create integrated supply chains, but OEMs suffer from the fact that the Australian market size is small, so we need to embrace international
markets. Australia needs to be seen as an attractive exporter of OEM produced final products. The question is how this can be encouraged so Australia can move up the value chain.

7. How can governments, industry, and researchers support Australia’s critical minerals industry to move further downstream and develop new sovereign capabilities?

The Government needs to strategically invest in the key steps along the value chain rather than trying to cover the entire value chain. Controlling the supply end gives higher strategic advantage for cost cutting and competitiveness. The Government could consider regulation, incentives and its own purchasing decisions in order to encourage usage of downstream inputs, as is the case for EVs in some countries. Similarly, given the infrastructure challenge for Australia with a large land area relative to a small population, there needs to be a facility for building out new infrastructure that would support downstream movement and/or sovereign capabilities. As Australia thinks about its energy generation solutions, a small portion of feedstock would need to be allocated to enable battery recycling to happen in country.

In the R&D space, incentives should be provided to promote the discovery and characterisation of in-ground resources, processing and refining further down the value chain, and the development or enhancement of markets within Australia or in partner countries. Capability hubs and common-user facilities would also be beneficial, especially for smart and green processing and manufacturing. In response to the dynamic demand and feedstock in global supply chains, flexible manufacturing and optimised operations are key to success. A cornerstone of these processes is advanced process monitoring, control and automation technologies, which are the key to safe, flexible, energy- efficient and cost-effective operation in remote areas (Rio Tinto’s autonomous vehicles operated in remote mining sites is a good example). As the vision of Industry 4.0 advances, industrial processes are becoming “cyber-physical systems” which can sense and interact with their environment and manufacture products by the ability to generate, process, store and communicate large amounts of data.

Another idea could be an increase in industry(led)-postgraduate R&D programs to attract students into R&D and improve/increase regional R&D capabilities. Maintaining strong R&D capabilities in turn improves commercialisation (deployment) of R&D outcomes regionally, benefitting industry / government sectors / economy. An approach could be limited to Australian students, but overseas candidates could be considered (may tie in with allies or investments from targeted trading partners).

8. What can Australia do to better develop and retain IP and to attract IP investment from like- minded partners?

Technology and innovation form a core part of Rio Tinto’s business model as we constantly seek to improve production and processes and outperform competitors. The ability to protect and realise value from investment in innovation is a contributing factor in our success and underpins our justification for future investment. To that end, Rio Tinto employs internal innovation and R&D teams, specialist in-house IP lawyers, and patent attorneys and searchers.

Rio Tinto has strong existing relationships with Australian universities, institutes, and other research organisations through which it undertakes innovation activities, including through the Trailblazer
University Program in the areas of critical minerals and clean energy. The innovations that Rio Tinto generates span a variety of technology areas, including advances in mining machines, mining processes, mine planning techniques, material sciences, mineral and metal processing, valorisation of waste, modelling and simulation techniques, and information and communications technology applications.

Rio Tinto has significant commercial interests and investments in Australia, including substantial mining operations, mineral processing operations, and research and development facilities.
International partnerships are often reached when complementary innovation/IP portfolios are involved from both parties (eg. Elysis – green aluminium smelting technology) to better develop the
IP and increase investment in same.

The Government could introduce tax benefits specific to Australian IP developers within the critical minerals landscape subject to commercialisation within Australia (processing, manufacturing, etc).

9. How can government support the capability of critical minerals companies and other relevant entities to identify, engage and grow new target markets?

De-risking projects at all stages of development will be important to overcoming barriers and attracting private investment. This can be achieved through project facilitation, providing technical support, making strategic investments in technology and facilitating demand, including by locking in offtake for production.

Financing can also be a particular constraint for certain critical minerals projects. This is because more niche minerals and materials often suffer from very limited or poorly functioning markets. If the total market can be easily flooded by new supply, or impacted by rapid technological change, then investment decisions can be very difficult. For this reason, innovative financing, including grant funding, can be an important means of sharing risk.

Government could also consider facilitating the full integration of supply chains both nationally and internationally. We have seen targeted instances of this in the United States under the Build Back
Better Act for new telecommunications infrastructure. Could Australia and its allies/trading partners build fully integrated supply chains to encourage companies to invest in critical mineral extraction by ensuring them that they have a guaranteed offtaker? This is one form to ensure critical minerals and materials producers have the end markets assured in order to justify the upfront investments. Other forms could include guaranteed prices or strategic Government stockpiles.

10. How should Australia engage with international partners to support the diversification of supply chains? What should this engagement focus on (including which countries)?

Rio Tinto welcomes the efforts of past and current Australian governments in forging strategic relationships with Australia’s key trading partners and allies, and this extends to frameworks and agreements put in place to promote cooperation in clean energy supply chains. Australia’s co- hosting of the Sydney Energy Forum with the International Energy Agency in July 2022 was successful in bringing world-leading experts together to discuss the challenges and opportunities facing the Indo-Pacific region as it scales up the clean energy transition. The Australian Government should look to continue to host the same Forum on a periodic basis.
Increasing the resiliency of clean energy supply chains, whether mitigating geopolitical risk, pandemic risk, natural disaster or some other risk, requires promoting diversification of supply or some form of optionality in the system. The Government should continue to promote Australia to current and potential trading partners as an important component of a resilient supply chain. The principles of an open, rules-based trading system should continue to underpin Australia’s engagement with its trading partners

Australia could seek to become an integral part of regional supply chains with a view to offering an alternative to supply chains in other parts of the world. In order for this to be successful, Australia would need to secure positions in priority regional supply chains in accordance with its comparative advantages and leverage, and other countries would need to attribute value to diverse sources of materials and inputs.

11. What actions can Australia take to ensure it leverages related investment by other countries, for example the US Inflation Reduction Act.

Australia is competing with other jurisdictions for investment in clean energy, including critical minerals development. Rio Tinto welcomes the Government’s $243 million package to help unlock critical minerals in Australia and leverage private investment. However, this is a fraction of the hundreds of billions of dollars in energy and climate related incentives and tax credits contained in the US Inflation Reduction Act (IRA). While the IRA includes some provisions that benefit countries like Australia, the IRA is first and foremost aimed at domestic US industries, particularly in the mid- stream which Australia is also seeking to develop.

Investment decisions about capital intensive, long-term resources projects are based on an analysis of their expected return. If a jurisdiction’s policy settings are not competitive, then companies will likely allocate their capital to similar investment opportunities in other jurisdictions, where a higher return on investment can be achieved. Australia may miss out on future capital investment if it continues to impose relatively higher costs, especially while other countries are incentivising investment by lowering company tax rates and/or providing other investment benefits.

12. Is there more the Australian Government can do to facilitate business-to-business engagement and drive supply chains diversification?

The Government could create a dedicated program to track and stocktake commercial opportunities arising from the numerous frameworks and agreements that Australia has in place with various trading partners. There needs to be coordination between the various strategic, trade and commercial discussions taking place between Australia and its trading partners. There needs to be a dedicated Office to interface with Australian businesses and facilitate links with overseas businesses or customers. The Government could use its network of overseas embassies and missions to support such an endeavour and ensure Australian can maximise any opportunities that exist. A ‘one stop shop’ is particularly important for smaller businesses that do not have the resources to keep on top of Government developments with current and potential trading partners.
13. How can Government and business work together to ensure private sector insights on the context and complexity of current supply chains and markets can inform policy design?

The Government should continue regular engagement with industry following the development of the new Critical Minerals Strategy to ensure follow-through of any actions or recommendations that are identified. The Government could also conduct roundtables or road shows ahead of/after key developments or milestones. The hosting of events such as the Sydney Energy Forum at appropriate times would also ensure momentum and such events could be used as accountability measures – both for Government and industry participants.

14. What are the opportunities for critical minerals projects to maximise their ability to support clean energy supply chains and technologies?

See response to question 1, including short-term and long-term opportunities or priorities.

15. How could the Australian Government help industry address capability barriers to supporting clean energy supply chains for critical minerals projects?

Australia does not currently possess the skills/workers to capitalise on global critical minerals demand. The most critical professional roles for the mining industry are mining engineers, geotechnical engineers, metallurgists and geologists. This is Rio Tinto’s lived experience as we search internationally for a broad range of roles. In Australia, there is demand for more than 300 mining engineers across the industry per year. In 2021, there were 87 graduates from Australian universities. As an industry we need to look at the challenges of today and also look to future roles.
Ongoing support for programs that promote industry and research institutions to translate suitable research into commercial technology will need to remain a focus of government. The Government also has a role to play in anticipating workforce needs in consultation with industry and experts as well as in educating the public on core skill requirements. Industry and Government could partner on targeted campaigns.

16. How can the Australian Government support the sector’s integration with key clean energy supply chains, both domestic and international?

The Australian Government will need to continue to be alert to geopolitical and trade risks and actively monitor policy and standards developments in partner country jurisdictions that could impact clean energy supply chains. In consultation with industry, advocate for policies and international standards that align with Australia’s interests. On the domestic front, policies should be designed to encourage capital investment and ensure a stable economic climate conducive to long- term business success.

As the world moves toward a global low-carbon economy, supply chains will evolve and with that the needs of customers. Businesses will adapt to the needs of their customers, but Government support through creating the enabling framework to enable integration into international supply chains will be critical.
17. What more can Australia do to ensure we are the international best practise jurisdiction for
ESG?

As the Paper suggests, “Australia has a reputation as a reliable and responsible trading partner, with some of the world’s most robust ESG standards.” So, while the expectations of stakeholders around
ESG are constantly evolving, and we rightly want to continue to strengthen our ESG standards,
Australia should avoid the temptation to introduce new regulatory requirements on our own.

The European Union, United States and the United Kingdom are all introducing new regulations in the near-term, with similar but different requirements for companies to comply with. The
International Finance Reporting Standards (IFRS) Foundation, through the International
Sustainability Standards Board (ISSB) is also working towards a global standard for sustainability- related disclosures. This is in addition to the myriad of ESG standards and certifications, like the
International Council of Mining and Metals Performance Expectations (ICMM PEs), or Towards
Sustainable Mining (TSM) which is being rolled out in Australia by the Minerals Council of Australia
(MCA), or the many commodity-based certifications like Copper Mark™ or the Aluminium
Stewardship Initiative (ASI).

This introduces complexity for companies that operate in multiple jurisdictions and multiple commodities, like Rio Tinto, and adds to the growing burden of reporting and assurance.
Transparently reporting on our sustainability risks and performance is very important, and we take it very seriously, but introducing duplication and complexity into these regulations can have the perverse and unintended consequence of drawing resources away from ESG improvement programs and into reporting and assurance activities.

Instead, Australia should follow the advice of the ISSB in a building block approach and leverage international regulations as they are developed. So rather than develop new regulations on carbon emissions reporting for example, Australia could adopt the TaskForce on Climate-Related Financial
Disclosures (TCFD) framework recommendations. This would ensure that for companies already operating in other jurisdictions, there is no additional reporting burden, and as this framework will evolve over time with multi-stakeholder engagement, Australia and our trading partners can be confident that the requirements are evolving and strengthening too. Australia should look to adopt these other standards/frameworks on Critical Minerals where appropriate.

Partnerships will be important in promoting improved ESG. In battery materials, we are seeing increasing partnership activity between metal producers and recyclers. While recycling won’t eliminate the need for continued investment in new supplies, the picture for battery recycling is set to change significantly from 2030 as an influx of spent batteries arrive. This should offer some relief to the supply of critical minerals at a time when they are forecast to be stretched to breaking point by the demands of the energy transition.

18. What role can Government play in supporting the critical minerals sector ensure workplaces are safe and inclusive, and can attract and retain underrepresented cohorts, such as women?

The safety of our people is our top priority. Rio Tinto is committed to eliminating sexual harassment from our business and acknowledges that change is needed to eradicate it from the mining sector.
In March 2020 we launched the Everyday Respect programme commencing with a cultural review led by independent expert Elizabeth Broderick. The final report included 26 recommendations which we have committed to implement in full.

We know that having an inclusive and diverse workforce improves performance and we continue to focus on the representation of women across all levels. This year, we expanded our gender diversity targets beyond women in senior leadership to women at all levels and increased the representation of women in our workforce by 1.4%. Gender diversity also improved among our senior leadership, up to 28.3%. Also, for the first time in five years, representation of women in frontline operator roles grew to 16.2%.

Our Gladstone leadership development pilot programme is an example where we focused on building career pathways to develop the capability of our female talent in frontline leader roles. The programme was rolled out across the Boyne Smelters, Queensland Alumina and our Yarwun
Refinery, and our plan is to deploy this programme across our Pacific Operations. We are also a
Founding Member of the Champions of Change Coalition, a group established to elevate gender equality and in 2021 became founding members of the Includability network advocating for people with disabilities.

Our graduate programme is one avenue where we can make sure our leaders of tomorrow reflect the diversity of our community. For our 2021 intake, 58% of the graduates were female and 35% from nationalities where we are building new businesses. In Australia, 10% of the graduate intake and 15% of our vacation student programme are Indigenous, up from 8% in 2020.

Full implementation of the Respect at work report recommendations will help to prompt the systemic and societal shifts needed to ensure safety, inclusion and respect, particularly in traditionally male dominated industries.

19. How can Government and industry create meaningful engagement with First Nations Peoples and ensure critical minerals projects benefit their communities?

The success of our Australian operations is inextricably linked to our partnerships with Traditional
Owners. Regional and remote Indigenous communities throughout Australia face challenging economic and social circumstances accompanied by historic disadvantage. Often mining activity supports economic and social development in these communities, offering a way to address challenging circumstances and contribute to change and empowerment.

Strong agreement making between proponents and Traditional Owners is increasingly based around principles of co-design and co-management. Some examples from our iron ore operations are offered below.

In 2022, Yinhawangka Aboriginal Corporation (YAC) and Rio Tinto agreed on a new co-designed management plan to ensure the protection of significant social and cultural heritage values as part of Rio Tinto’s proposed development of the Western Range iron ore project in the Pilbara region of
Western Australia. The Social, Cultural Heritage Management Plan (SCHMP) is the result of strong collaboration over the past year between the Yinhawangka people and Rio Tinto including
‘on-Country’ visits, archaeological and ethnographic surveys and workshops. As a result of that collaboration, the mine was designed to reduce impacts on social and cultural heritage values.
In May 2022, we entered into a co-management Heads of Agreement with the Puutu Kunti Kurrama and Pinikura Aboriginal Corporation. This agreement establishes a framework and commitment to develop principles and working arrangements of co-management of Country. It sets a pathway to reach a binding co-management agreement as a component of our commitment to modernise agreements with Traditional Owners in the Pilbara. The agreement is an important step towards rebuilding our relationship with the Puutu Kunti Kurrama and Pinikura people.

Rio Tinto is committed to improving Indigenous training and employment and has various programmes in place to achieve this. We have recently launched a US$50 million initiative to attract, retain and support the development of Indigenous employees across Australia, reflecting our continued commitment to growing Indigenous leaders. We are also committed to working with our contract partners to improve Indigenous engagement and opportunities. We have partnered with
Monadelphous to establish an Indigenous Employment Pathways Programme. This three-year partnership will focus on creating meaningful and sustainable employment for Aboriginal and Torres
Strait Islander peoples. Supported by dedicated coaching and mentoring, the Programme aims to increase the number of skilled and tertiary qualified Aboriginal and Torres Strait Islander peoples in the resources industry. It will be open to prospective apprentices, trainees and tertiary cadets in a variety of fields, including mechanical fitting, electrical, boiler making and welding, as well as traineeships in civil construction, crane operations, rigging, business administration, and health, safety and environment.

Our external stakeholders have noted that a challenge for Traditional Owners is that they have multiple priorities to meet and are under significant time and resource pressures. The Critical
Minerals Strategy should not place additional burdens on Traditional Owner group and would ideally enhance or support their capacities to engage to facilitate increased engagement for the critical minerals uplift. Opportunities exist for proponents and Traditional Owners to work together in relation to nature-based solutions. Opportunities exist in association with offsetting carbon from new mines and processing, or remediation of mines during closure.

20. What are the opportunities to further strengthen the ESG credentials of the sector? For example, helping industry showcase their high ESG projects or support enabling capabilities such as the adoption of mineral traceability measures.

Support for the industry to showcase our high ESG project is always welcome, and Rio Tinto would be pleased to work with Government to develop these. On mineral traceability, there are many disparate projects that are being led by individual companies in this space. Rio Tinto has developed a system called START (www.startresponsible.com) that could potentially be leveraged by other companies/commodities, but there are other products in the marketplace. As the provenance of minerals and metals becomes more important to governments and customers as we move toward a low-carbon global economy, Australia could assist in this space by convening industry and customers together to work towards a common set of principles/metrics that any eventual converged or standard system would then include.

21. What are the opportunities for Australia in increasing recycling and circular economy practices in the critical minerals sector?
An emerging theme in the development of more sustainable value chains is the circular economy, which is built around the principles of designing out waste and pollution, keeping products and materials in use, and regenerating natural systems. The concept offers a transition away from linear
“take-make-use-dispose” value chains to building more sustainable and resilient supply ecosystems.
The circular economy presents a risk to primary metal demand growth in some markets, but also offers unique growth opportunities, from scrap recycling to the monetisation of waste streams. It could also provide a pathway to greatly reduce the environmental and social impacts of metal value chains, while increasing supply security for customers. An increasing number of downstream participants are actively participating in responsible sourcing initiatives to help create more ethical and sustainable supply chains.

Recycling has always been a feature of the minerals and metals industry, but new socio-economic forces, policy shifts and the energy transition are reshaping the sector, making it more transparent, integrated and profitable. Recycling is emerging as an important part of many material suppliers’ portfolios as customers seek green materials and products with low environmental footprints.
Leading global leading OEMs, in particular, are increasingly looking towards recycled material to reduce their carbon footprint and improve the circularity of their value chains (less waste, less pollution, less environmental damage).

In Australia, the presence of established smelting and refining facilities (such as for primary refined nickel and aluminium production) provides potential avenues for the extraction of additional volumes of several key critical mineral by-products including cobalt, scandium and gallium. However, a large number of critical minerals mined in Australia are exported in concentrates, either as the main component (i.e. Rare Earths in monazite concentrates) or contained in other metal concentrates (i.e. indium in zinc concentrates). This could be reversed with increased investment in mid- to downstream processing operations in Australia but will require considerable capital and government support.

Smelting and refining facilities in Australia also have the ability to consume scrap to produce additional volumes of recycled material. However, for most metals (including aluminium), proximity to scrap supply is a key driver in cost reduction and given Australia’s relatively low historical metal consumption and resultant scrap generation (in global terms), this limits the potential scale and or profitability of recycling opportunities across most metals. Despite this, the processing of lower volumes of higher value scrap such as spent batteries and eWaste could be a promising growth opportunity. These materials commonly contain several high value critical minerals (such as indium in LCD screens, PGMs in circuit boards and cobalt in batteries). Collecting, separating and processing these materials is complex and will rely on a range of factors – from improved policy for scrap collection to support for developing new refining techniques. Australian primary metal producers can look towards creating closed-loop partnerships with key customers to create more circular and sustainable value chains.

22. Are there any other factors or issues the Government should consider in developing the new
Critical Minerals Strategy.

Given the strategy is couched within the broader objectives of clean energy supply chains and contributing to a strong future for the resources sector, there is a strategic and economic risk if the strategy is too narrowly focused or does not complement policies aimed at supporting the clean
energy transition. The energy transition will require enormous amounts of copper, aluminium and nickel, and supporting infrastructure such as smart cities will need iron ore and steel.

It is recommended that the Government further investigate different clean energy minerals and metals, as well as the positions on the value chain, that could provide the most value to Australia, including economic, social and strategic partnership value. In particular, it would be important to consider whether minerals and metals such as aluminium (including alumina and bauxite) and copper should be on Australia’s critical minerals list.