As we have often established that Australia is full of rich resources for our future world, the mining industry will be closely looked in the next few years. Under environmental pressures such as climate goals and social pressures such as wages for workers, mining becomes a more controversial but still crucial industry to the Australian economy. How will the Australian government shape this land of resources? As the 2022 Australian Federal Election enters its final days, it is time to discuss what both parties promise to do for the mining industry. Australians will be electing their next Prime Minister on 21st May, choosing from Scott Morrison of the Liberal-National Coalition (Coalition) and Anthony Albanese of the Opposition and leader of the Australian Labor Party (ALP). Both parties have addressed their future plans over the mining industry throughout their campaign; in which where The Coalition holds a strong pro-mining stance, while ALP has recently expressed that they support new coal mines[1].

To break down this year’s election, we must establish and understand what happened in 2019 and what role did the mining industry play back then. In 2019, Morrison’s conservative party was elected unexpectedly, convincing voters to not risk for a new government when the economy was growing rapidly[2]. The Coalition earned a large number of seats in Queensland and Western Australia, which are mining concentrated states. These states create a lot of jobs for blue collar workers. Australia’s mining sector supports approximately 260,000 jobs in the country[3]. As mining is one of the biggest economies in Australia, high income voters were leaned on voting for the coalition and blue workers favoured their pro-mining stance. On the other hand, ALP has stricter climate goals and focuses on social rights of the population, which will impose more challenges for the mining industry.

The Coalition is a pro-mining political party. “… If the Coalition is returned at the forthcoming election, I can assure you there will be no mining tax… there will be no carbon tax” says Morrison campaigning in Western Australia[4]. He also promises to continue investing in critical minerals, mining regions, cutting edge research and technology for the industry. There are many examples of the Coalition party signing off budgets, subsidies and policies for the mining industry. For rare earths; one of our favourite commodities in Australia, the Coalition Government granted $200 million Accelerator grants program, $50 million to support research and development and an updated industry strategy, in which they specifically addressed the endless potentials and demands for rare earth materials[5]. Lynas Rare Earths (LYC.AU) is the largest rare earths processor outside of China located in Western Australia. There is a strong history of the Coalition backing up the mining industry and Australia has thrived competing against China through the pandemic. During Morrison’s campaign, he pledges $250 million to create 5000 new mining jobs in Western Australia, reassuring voters that the economy and job opportunities come first for the Coalition[6]. In the future, the Coalition looks forward to continue investing in mining regions such as Pilbara, specifically for gold, coal, and iron ore. Within the region, Pilbara Minerals (PLS.AU) is a large player, producing lithium and tantalite. These mining companies will continue to thrive under looser climate policies and tax constraints under the Coalition Government.

To avoid repeating what happened in 2019, ALP is now campaigning for environmentally and commercially friendly mining. It is important to note that these 2 parties do not have a fully opposing view in terms of mining, as long as there is international demand for exports. ALP is center-left, a voice for growing wages and social services, but why are they matching the stance of the Coalition to support new coal mines? In simple words, votes of blue collar workers are crucial in the upcoming election. Albanese said in Queensland “Labor would welcome any jobs that would be created from that (coal mines that balance environmental and commercial factors)”[7]. Albanese’s support for fossil fuel projects may boost and chances for seats in Queensland and Western Australia, however, he is also putting votes of Green Party at risk. In comparison to the Coalition, ALP has a higher net zero goal. The Coalition has promised to reduce emissions by at least 26 per cent by 2030, based on 2005 levels of greenhouse pollution, and the ALP by 43 per cent on the same basis.

In conclusion, the mining industry in Australia supports a lot jobs and lives of the population. Both parties cannot risk to lose the votes of high-income and blue collar workers. In 2019, the Coalition won by winning the votes of mining states – Western Australia and Queensland. This year, both parties fight hard for their mining voters. Judging from the Coalition’s past records, it is obvious that the party will continue to invest in fossil fuels, precious commodities, and mining activities. ALP is also showing support for mining as long as it is environmentally balanced. Looking at their climate goals, the Coalition has a lower target, which is more favourable for the mining industry.

Please note that this article is solely written in the perspective of the mining industry and does not contradict with our beliefs on ESG investing.

* Solactive LW US&AUS Future World Index holds PLS.AU as of 19 May 2022