Australia welcomes Chinese Premier’s visit as Fortescue and Tianqi lead energy transition

Prime Minister Anthony Albanese hosted a three-day visit by Chinese Premier Li Qiang and China’s high-level delegation in June as part of efforts to foster improved Australia-China trade relations.

Premier Li’s visit, the first by a Chinese Premier since 2017, featured a tour of a lithium hydroxide plant in Kwinana, WA, and Fortescue’s green technology and test facility in Hazelmere, WA.

In what Prime Minister Albanese calls “renewed engagement”, this visit strengthens the existing trade between the two countries, with China being Australia’s biggest trading partner at a record $327b in 2023, or 27% of Australia’s total goods and services trade.

“Premier Li’s visit is another important step in stabilising Australia’s relationship with China,” he said.

A lithium bridge

Premier Li’s visit to Tianqi Lithium Energy Australia’s (TLEA) lithium hydroxide plant coincides with a 42-fold increase in the value of WA’s lithium concentrate exports to China in just two years, growing from $471m to $19.8b between FY21 and FY23.

TLEA chief executive officer Raj Surendran says Tianqi Lithium Corporation’s (TLC) investment in Australian mining and downstream processing demonstrates the potential for mutually beneficial collaboration between Australia and China, one that also supports global goals for decarbonisation and diversification of critical minerals supply.

“Tianqi’s investment in the Kwinana plant and its ownership of the Talison lithium mine to date totals nearly $3b,” he said.

“Tianqi a decade ago made a commitment to the [Federal] Government that it would help to establish a domestic critical mineral processing and battery manufacturing capability and they have delivered on that promise.

“By leveraging the patient capital, skills and experience from TLC, that desire for an Australian industry has been realised and we continue to call on that expertise as we meet the challenges of a technically complex manufacturing process.”

TLC chief executive officer Frank Ha says Australia is known for its abundant and high-

quality lithium resources that are crucial for future industrial development.

“The Kwinana plant 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.”

“A green focused world”

Premier Li’s visit to Fortescue Zero’s Hazelmere prototype facility in WA gave Fortescue (ASX: FMG) the opportunity to demonstrate its world-leading technology and its decarbonisation progress in its journey to Real Zero emissions across its Australian iron ore operations.

The visit is a continuation of Fortescue’s two-decade business relationship with China and presents 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.

Fortescue executive chairman Dr Andrew Forrest AO says the green iron metal supply chain will deliver environmental and economic benefits to both countries.

“A fully integrated green iron metal supply chain between Australia and China is the key to China maintaining its position as the dominant global producer of steel to the world,” he said.

“Our proposed Australia Sino green iron metal supply chain will bring together mining powered by large-scale renewable power and green hydrogen to produce green iron metal.

“Our ambition is to provide 100mt of green iron metal to China each year, eliminating more than 200mt of carbon dioxide emissions.

“I have seen firsthand the impressive in-roads China is making towards renewable energy which in partnership, we can leverage to create great opportunities for green industry in both countries.”

Fortescue Metals chief executive officer Dino Otranto says they have invested heavily in establishing this mutually beneficial partnership with China.

“Today, China remains our key market for our iron ore business and we now look forward to building new relationships in a green focused world,” he said.

“We believe that partnering with China to help send its steel industry green will be a major benefit to both economies and to bilateral relationships, shoring up Australia as China’s reliable and preferred commodity supplier.”

WA at the heart of partnership

Prime Minister Anthony Albanese says that WA has been central to the Chinese Premier’s visit.

“[The Federal Government] understands that growing worldwide demand for critical minerals, rare earths and the metals essential to clean energy technology is good news for WA and our nation as a whole,” he said.

“WA’s resources industry is world-renowned for quality, safety and skill in extraction.

“[The Federal Government] wants to build on these strengths to create a new generation of secure, high-paying Australian jobs in processing, refining and manufacturing, powered by clean energy.

“This commitment to revitalising local manufacturing doesn’t mean cutting trade ties or pulling up the economic drawbridge, this is about moving Australia up the international value chain.

“Adding more value to WA resources here, so we can sell a wider range of products to a broader range of markets.”

In a one-on-one meeting, WA Premier Cook raised opportunities for increased trade of critical minerals to support China and Australia’s energy transition.

WA Premier Cook says the China-WA trade relationship is essential for a successful energy transition.

“As the world transitions to a clean energy future, we’re also embracing new opportunities partner with China on job-creating projects like the Tianqi lithium facility in my home electorate,” he said.

“[WA’s] trade with China underpins hundreds of thousands of local jobs and helps to power the WA economy.”

China is WA’s largest trading partner, with $162.9b of goods traded in 2023 – accounting for 58% of the State’s goods exports.

WA accounted for 75% of Australia’s goods exports to China in 2023.

Australia China Business Council (ACBC) WA state president James Clarke says it is fitting that Premier Li was determined to visit WA given such intensity in trade.

“The economic trade and investment relationship between [WA] and China has the highest trade intensity of any jurisdiction in Australia, and therefore a higher proportion of flow-on benefits to local WA households,” he said.

“Research commissioned by the ACBC shows, amongst other things, that the average WA household had an extra $8,700 in disposable income and 2.9% lower cost of living in 2022-23 as a result of its economic relationship with China.”