An opportunity for Australian businesses to lead the global energy transition 5 min read
The Australian federal and state governments are committed to growing Australia's critical minerals sector, as discussed in our latest Insight. If suitably developed and executed, there is an opportunity to place Australia at the forefront of the global clean energy transition. However, along with this new horizon comes an intricate web of IP considerations, particularly in the mid-stream processing space.
This Insight examines IP opportunities to secure, or IP roadblocks that may need to be traversed, to protect Australia's investment in the critical minerals sector.
Key takeaways
- The Australian critical minerals market has seen an influx of investment and there is an exciting opportunity to develop a local mid-stream processing industry.
- However, domestic IP registrations for technology developments in this area have not seen a corresponding growth.
- By leveraging Australia's strong research and development (R&D) activity and implementing robust IP policy, including proactively monitoring IP risks and protecting IP rights, Australian businesses can cultivate a competitive edge and place Australia at the front of the global clean energy transition.
Opportunities for mid-stream processing
As identified in Australia's Critical Minerals Strategy 2023-30, there is a geostrategic and economic opportunity for Australia to become a 'globally significant producer of […] processed critical minerals'. This would require the Australian resources sector to branch out from predominantly acting as an upstream discovery and raw mineral extractor, and develop new onshore processing and manufacturing projects (which traditionally have been conducted overseas).
This opportunity has been explored in a recent CSIRO Report, which acknowledges that greater R&D focus is required for processes further down the supply chain. This shift in focus from Australia's traditional upstream mining involvement will require a number of challenges to be overcome, including navigating (and potentially gaining access to) third-party IP, strong cost competition, significant capital and financial investment, as well as ESG considerations. We take a further look at navigating the IP landscape below.
The IP landscape
A key to protecting Australia's advancements in the critical minerals supply chain, including mid-stream processing, is to secure domestic IP rights. This would promote a long-term strategy of national collaboration and reduce the reliance on foreign IP and processing facilities.
However, as seen in the following chart, despite Australia's increased investment into the critical minerals space, Australia's global share of critical minerals IP has not seen a corresponding growth in recent years. In contrast, Chinese entities continue to be world leaders in securing IP rights in the critical mineral space, as they've done in other sensitive geopolitical areas of technology. By way of example, Huawei has navigated sanctions in overseas jurisdictions by licensing its IP to companies implementing new 5G/6G infrastructure. This has significantly boosted Huawei's revenue and demonstrated the value of protecting its R&D investment with registered IP.
As previously reported here, innovation in the critical minerals space can be protected through patent protection, or as confidential information or trade secrets. Although it may be appropriate in certain situations to rely on confidential information and trade secrets to protect R&D, such a strategy is not without risk, eg if there is a data breach or leak. Patent protection can provide 20 years of exclusive rights to new innovations, and proactive IP strategies can provide significant commercial advantages by building company assets and thickets that protect technological advancements and keep competitors at bay. At the same time, navigating third-party IP will help avoid roadblocks and risks to major projects. Hence, industry players who implement clear and comprehensive IP strategies to ensure they are managing these IP risks and opportunities appropriately can obtain a strong market advantage.
International collaboration
Growing domestic R&D and IP will be crucial to Australia's success in developing its critical minerals industry. However, international collaboration is another way for Australia to leverage opportunities to move into and build its mid-to-downstream processing capability. Entities in several foreign countries hold relevant patents and are seeking attractive jurisdictions to set up processing plants. As such, domestic companies may be able to partner with these companies to license IP or establish joint ventures to deploy domestic operations. Any joint venture may in turn result in the development of new IP, which should be protected with forward-thinking IP strategies and policies.
Next steps
Australia's success in building its critical minerals industry will benefit from a two-pronged approach consisting of R&D activity and international engagement to develop and support the deployment of advanced technologies—leveraging IP effectively is a critical element in every aspect of this approach. Implementing appropriate IP policies now, to manage IP risks and secure IP opportunities in new projects, will help secure Australia's critical minerals position for future success.