Independent economist Saul Eslake is having a 50:50 bet on the future of the country’s mining industry contributing to our first-world standard of living.

Mr Eslake addressed the 46^th annual Sir George Fisher Lecture last night, hosted by the Australasian Institute of Mining and Metallturgy in Townsville.

China’s demand for metallurgical coal and iron ore was likely to fall with its transition from a manufacturing to a services economy, leaving Australia’s two largest exports to find more markets, Mr Eslake said.

That would not be taken up entirely by India, which had a different growth profile and iron ore and met coal supplies of its own, he said.

“We can’t assume that India is going to do for us over the next 25 years what China has done for us over the last 25 years. And there are no other Chinas or Indias out there after China and India itself. 

“The new opportunities for Australia’s resources sector, if we seize them, are going to come from ongoing geopolitical tensions between the three – as they see themselves – great powers, from heightened uncertainty about their intentions and capabilities, and from increasing trade tensions between those three blocks and the regions in which they are dominant. 

“The likelihood is that over the next few decades, the demand for fossil fuels from around the world will decline, but that’s likely to create increased demand for other minerals that we have the potential to participate in. 

“And then thirdly, the AI revolution, which to some extent is overhyped, but is undoubtedly going to be part of the reality of the world economy for the next 30 or 40 years.”

Mr Eslake said the demand for critical minerals had the ability to add to a tightening trade surplus. 

The transition into a viable processing sector had the potential to fill some of the slack, but it would be uncomfortable, he said.

“I hope the underlying message is one that with sufficient focus and determination on the right things, there will still be good days in front of Australia’s resources industry.

“Here in Australia, we do have, I think, the capacity to meet significant components of this emerging demand and to contribute to peacefully, hopefully, resolving some of the consequences of these potentially disturbing geopolitical developments.

“But we’re going to be facing a lot more competition in that than we have been over the last 25 years in supplying China’s thirst for iron ore and coal. There’s a challenge, therefore, for Australia’s resources industry over the next 25 years.”