Penny Wong’s show of mettle over nickel
Penny Wong has confronted Chinese counterpart Wang Yi over his country’s threat to Australia’s nickel industry.
Penny Wong has confronted Chinese counterpart Wang Yi over his country’s threat to Australia’s nickel industry, as Xi Jinping’s envoy talked up China’s economic importance to Australia and called for both nations to “make the pie” bigger.
Despite Beijing committing to work with Australia on climate change and clean energy, Chinese-owned mines in Indonesia have flooded the nickel market, triggering a plunge in prices for the key battery mineral and the loss of 1500 Australian jobs so far.
In talks with Mr Wang on Wednesday, the Foreign Minister welcomed the upcoming removal of Chinese trade bans on wine, lobster and beef, but raised the concerns of Australian miners over China’s role in the plunging nickel market.
“We discussed recent volatility in nickel markets and I made the point that predictability in business and trade is in all our economic interests,” she said after the meeting in Canberra.
Mr Wang, who declined to attend a press conference with Senator Wong, said both nations must remain “committed to mutual respect”, highlighting that 80 per cent of Australia’s trade surplus came from trade with China. “The right approach is to make the pie of common interest bigger and to provide a sound business environment for the companies of our two countries,” he said.
In reference to the US, Mr Wang said Australia-China relations “should not be affected or disrupted by any third party”.
At a private business lunch, he warned US global dominance was coming to an end, declaring the world “should not be dominated by one or two countries”, and that “and all countries are equal”.
“The world needs peace. It does not need turmoil,” he said.
The surge in cheap nickel produced under Indonesia’s low labour and environmental standards has forced BHP to write down the value of its nickel business by $5.4bn and shed a quarter of its workforce at its West Musgrave project in WA.
Andrew Forrest’s private Wyloo Metals nickel operation is also under pressure after the price of nickel fell almost 50 per cent on the Chinese-supported supply.
The Albanese government quietly dropped anti-dumping action against imported Chinese wind turbines ahead of Mr Wang’s visit, in a move hailed by Beijing as a “good gesture” and a sign Canberra was distancing itself from the “anti-China position” of the US.
Industry Minister Ed Husic agreed on Friday to drop action aimed at protecting Australian manufacturers, which Chinese experts had linked to China’s bans on Australian wine and crayfish imports. But Senator Wong said there had been no quid pro quo. “There’s no relationship between the wine dispute and the steel dispute,” she said.
“Minister Husic has made a decision based on the apolitical and evidence-based recommendation from the Anti-Dumping Commission. Australia has made clear the independence of that commission.”
China’s state-run Global Times reported Mr Husic’s decision before it was made public in Australia, saying it was “in line with Australia’s green development”, and a “good gesture” ahead of Mr Wang’s visit.
Senator Wong raised China’s suspended death sentence for Australian writer Yang Hengjun with her counterpart, saying Australians were “shocked”.
She also confronted Mr Wang on Beijing’s “unsafe conduct at sea”, and raised Australian concerns over human rights in Xinjiang, Tibet, and Hong Kong.
Despite China’s well-documented foreign interference efforts and state-sponsored cyber attacks, Mr Wang said China “never interferes in Australia’s internal affairs”. “We respect the system and path that Australia has chosen,” he said.
Mr Wang’s visit, which included talks with Anthony Albanese, was intended to lay the groundwork for a trip to Australia by Chinese Premier Li Qiang. Senator Wong said plans for the Premier’s visit were “on track”.
Mr Wang also met Opposition Leader Peter Dutton and the Coalition’s foreign affairs spokesman Simon Birmingham. “It was a meeting where the comments and discussions focused on the here and now and the future, rather than looking backwards,” Senator Birmingham said.
S&P Global Ratings has warned Chinese-backed Indonesian mines will continue to flood the global nickel market, putting marginal miners including Australian producers at further risk.
Indonesia’s global market share of nickel jumped to 53 per cent in 2023 from just 34 per cent in 2019.
Minerals Council of Australia CEO Tania Constable said Senator Wong’s move to raise the nickel industry’s plight fell short of the response required. “This provides little comfort to the Australian nickel sector, which has been grappling with prolonged difficulties for months,” she said. “China’s investments in critical minerals highlights the urgent need for Australia to recalibrate our own domestic policies.”
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