The Australian economy is at the crossroads. We face the decline of our two major exports – coal and iron ore – and few people can see the burning platform. Although we might think that demand for coal will gradually fade out, we know from experience that once the price of alternatives crosses a threshold, demand can suddenly fall of a cliff.

Iron ore demand has been buttressed by the Chinese transition from a rural to an industrial economy, but as with all prudent businesspeople, the Chinese are actively developing alternative sources of supply: Africa, Russia and Brazil. And given the low recycling rate of steel in China, there is ample upside potential for it increasingly to use internally sourced scrap metal in the future.