1 00:00:04,019 --> 00:00:06,420 Sean Aylmer: Welcome to the Fear and Greed daily interview. I'm Sean 2 00:00:06,420 --> 00:00:09,090 Sean Aylmer: Aylmer. You might remember earlier this year I spoke to 3 00:00:09,090 --> 00:00:12,989 Sean Aylmer: Liam Connolly who leads the energy transition practice at Bain. 4 00:00:13,289 --> 00:00:15,660 Sean Aylmer: It was a great chat about the challenges businesses face 5 00:00:15,660 --> 00:00:19,110 Sean Aylmer: as Australia transitions to greener energy. As we mentioned at 6 00:00:19,139 --> 00:00:22,439 Sean Aylmer: the time, businesses at least knew the environment in which 7 00:00:22,440 --> 00:00:24,840 Sean Aylmer: they were operating in, with the government having committed to 8 00:00:24,840 --> 00:00:30,780 Sean Aylmer: net zero emissions by 2050 and a 43% reduction by 2030. That 9 00:00:30,780 --> 00:00:34,050 Sean Aylmer: interview very much focused on the challenges here in Australia. 10 00:00:34,469 --> 00:00:37,620 Sean Aylmer: But what about the bigger global picture? Bain recently released its 11 00:00:37,770 --> 00:00:41,370 Sean Aylmer: 2023 Global Energy and Resources Report, looking at some of 12 00:00:41,370 --> 00:00:44,879 Sean Aylmer: the main obstacles and opportunities within the global transition to 13 00:00:44,880 --> 00:00:48,120 Sean Aylmer: renewable energy. Liam Connolly, welcome back to Fear and Greed. 14 00:00:48,630 --> 00:00:50,129 Liam Connolly: Thanks, Sean. Good to be back. 15 00:00:50,519 --> 00:00:53,100 Sean Aylmer: So last time we spoke, you summarized the overall reason 16 00:00:53,100 --> 00:00:56,880 Sean Aylmer: behind the transition really well. So let's just start there again. 17 00:00:56,880 --> 00:00:59,250 Sean Aylmer: For those listeners who didn't hear it or can't remember 18 00:00:59,250 --> 00:01:01,890 Sean Aylmer: back to February this year, why are we doing this? 19 00:01:02,190 --> 00:01:04,469 Sean Aylmer: And from a business perspective, what are the benefits of 20 00:01:04,469 --> 00:01:05,190 Sean Aylmer: the transition? 21 00:01:05,969 --> 00:01:10,109 Liam Connolly: Certainly. I think the reason why we're doing this is 22 00:01:10,109 --> 00:01:14,940 Liam Connolly: I think it's pretty clear that climate change and global 23 00:01:14,940 --> 00:01:19,590 Liam Connolly: warming are certainly coming to the forefront of people's minds, 24 00:01:19,800 --> 00:01:23,580 Liam Connolly: seen COP26 really accelerate that in Glasgow a couple of 25 00:01:23,580 --> 00:01:25,679 Liam Connolly: years ago. But what we're seeing is that there's an 26 00:01:25,679 --> 00:01:28,830 Liam Connolly: overall warming happening to the world across the globe as 27 00:01:28,830 --> 00:01:33,120 Liam Connolly: we see carbon emissions increase. And as a result of 28 00:01:33,120 --> 00:01:35,580 Liam Connolly: that, there's a lot of action being put in place 29 00:01:35,580 --> 00:01:38,610 Liam Connolly: to try and reverse that trend and move back down 30 00:01:38,610 --> 00:01:41,280 Liam Connolly: to the Paris Accord of a 1. 5 degree warming 31 00:01:41,280 --> 00:01:44,309 Liam Connolly: scenario. And what that means is that we need to 32 00:01:44,309 --> 00:01:50,100 Liam Connolly: transition away from traditional fossil based energy sources such as 33 00:01:50,100 --> 00:01:54,930 Liam Connolly: coal and oil and gas to greener energy sources such 34 00:01:54,930 --> 00:02:00,599 Liam Connolly: as solar and wind and geothermal. And that requires a 35 00:02:00,599 --> 00:02:04,919 Liam Connolly: significant transition in a number of things in the economy. 36 00:02:05,100 --> 00:02:06,990 Liam Connolly: And that includes things like our cars is a simple 37 00:02:06,990 --> 00:02:11,130 Liam Connolly: example of moving away from internal combustion to electric vehicles. 38 00:02:11,910 --> 00:02:15,210 Liam Connolly: Now the reason why that's important, I think, and also 39 00:02:15,210 --> 00:02:18,540 Liam Connolly: for business is that a number of businesses drive a 40 00:02:18,540 --> 00:02:22,379 Liam Connolly: significant portion of emissions in how they produce goods, in 41 00:02:22,379 --> 00:02:26,700 Liam Connolly: how they offer services to consumers. And so businesses are 42 00:02:26,700 --> 00:02:29,880 Liam Connolly: now looking at what role they play in the overall 43 00:02:29,970 --> 00:02:32,610 Liam Connolly: energy transition and what they can do to reduce their 44 00:02:32,610 --> 00:02:37,198 Liam Connolly: footprint across their different scopes of emissions. So we've seen 45 00:02:37,258 --> 00:02:40,048 Liam Connolly: a lot of great commitment and target setting from businesses 46 00:02:40,049 --> 00:02:42,869 Liam Connolly: to do that and investment happening. The challenge is the 47 00:02:42,869 --> 00:02:44,700 Liam Connolly: rubber's hitting the road and there's a lot more to 48 00:02:44,700 --> 00:02:47,730 Liam Connolly: do, and we're starting to see some things slow down 49 00:02:47,730 --> 00:02:50,070 Liam Connolly: in terms of how we're trying to transition. 50 00:02:51,480 --> 00:02:55,828 Sean Aylmer: Okay. It takes a lot of money to transition. And 51 00:02:55,860 --> 00:02:58,589 Sean Aylmer: then beyond money, there's an example, last week I think 52 00:02:58,590 --> 00:03:01,500 Sean Aylmer: it was Whitehaven Coal bought a bunch of cleaner coal mines, if 53 00:03:01,980 --> 00:03:04,290 Sean Aylmer: there is such a thing, off BHP, for example, as 54 00:03:04,290 --> 00:03:07,019 Sean Aylmer: they're trying to transition away from dirty coal to cleaner 55 00:03:07,020 --> 00:03:12,090 Sean Aylmer: coal. You have investors refusing to invest in certain areas. 56 00:03:12,480 --> 00:03:15,059 Sean Aylmer: There's pain points for the banks who are providing loans 57 00:03:15,059 --> 00:03:18,449 Sean Aylmer: for certain resource companies, et cetera, et cetera. It's all 58 00:03:18,449 --> 00:03:21,660 Sean Aylmer: about CapEx, right? Is there enough money going into it? 59 00:03:21,660 --> 00:03:23,730 Sean Aylmer: Is the government doing enough? And I wouldn't mind you 60 00:03:23,730 --> 00:03:25,950 Sean Aylmer: just touching on what the US is doing in that 61 00:03:25,950 --> 00:03:26,580 Sean Aylmer: area too. 62 00:03:27,240 --> 00:03:29,699 Liam Connolly: Certainly. It is a lot of money. To put it 63 00:03:29,700 --> 00:03:33,390 Liam Connolly: into perspective, the estimate is that at least of 2030, 64 00:03:33,780 --> 00:03:37,110 Liam Connolly: we need to spend $ 4. 6 trillion, which is a very 65 00:03:37,110 --> 00:03:40,710 Liam Connolly: large number with a lot of zeros, every year to 66 00:03:40,710 --> 00:03:42,600 Liam Connolly: hit net zero by 2050. 67 00:03:43,110 --> 00:03:43,440 Sean Aylmer: Wow. 68 00:03:43,500 --> 00:03:47,099 Liam Connolly: And to date, less than 2 trillion of that is 69 00:03:47,099 --> 00:03:50,399 Liam Connolly: being deployed into clean energy worldwide across private and public 70 00:03:50,400 --> 00:03:54,089 Liam Connolly: sectors. So look, there's significant money going into it. However, 71 00:03:54,090 --> 00:03:56,100 Liam Connolly: the challenge is we need to more than double that 72 00:03:56,160 --> 00:03:58,740 Liam Connolly: and do that every single year to put us on 73 00:03:58,740 --> 00:04:02,460 Liam Connolly: the path to net zero. One of the challenges is that 74 00:04:03,150 --> 00:04:07,709 Liam Connolly: a lot of the technology required to transition might not 75 00:04:07,710 --> 00:04:11,489 Liam Connolly: be economically viable to do so. And one thing that 76 00:04:11,490 --> 00:04:15,000 Liam Connolly: we've seen governments do around the globe, and particularly in 77 00:04:15,000 --> 00:04:18,779 Liam Connolly: the US with the Inflation Reduction Act, is they've offered 78 00:04:19,110 --> 00:04:27,328 Liam Connolly: a significant funding program targeted at these greener technologies, batteries, 79 00:04:27,389 --> 00:04:31,679 Liam Connolly: hydrogen are two examples that come to mind, that subsidize them 80 00:04:32,130 --> 00:04:35,430 Liam Connolly: and offer tax incentives so that companies can actually invest 81 00:04:35,430 --> 00:04:38,460 Liam Connolly: in those where there is a little bit uncertainty in the 82 00:04:38,520 --> 00:04:43,560 Liam Connolly: overall economic pathway of those technologies as an incentive to 83 00:04:44,549 --> 00:04:48,330 Liam Connolly: bring capital in. The challenge is, that's great, but we 84 00:04:48,330 --> 00:04:52,380 Liam Connolly: just still don't have enough capital going in to the transition globally. 85 00:04:53,220 --> 00:04:55,620 Sean Aylmer: So can I ask then, some of the resource companies, 86 00:04:55,620 --> 00:04:57,089 Sean Aylmer: and I'm not picking on the iron ore miners, it's 87 00:04:57,089 --> 00:04:59,010 Sean Aylmer: just they made a lot of money last year, they 88 00:04:59,010 --> 00:05:01,709 Sean Aylmer: pay out all these special dividends to shareholders, shareholders love 89 00:05:01,710 --> 00:05:05,100 Sean Aylmer: that. Are we better off though when companies like the 90 00:05:05,100 --> 00:05:07,470 Sean Aylmer: coal companies last year, the iron ore companies last year, 91 00:05:07,470 --> 00:05:10,440 Sean Aylmer: would they be better off actually plowing it into greener 92 00:05:10,440 --> 00:05:12,660 Sean Aylmer: technology rather than giving it back to shareholders? 93 00:05:13,770 --> 00:05:16,049 Liam Connolly: It's a good question, and I think it comes down to 94 00:05:16,050 --> 00:05:20,130 Liam Connolly: how you define better off. Because ultimately, there's a view 95 00:05:20,130 --> 00:05:25,170 Liam Connolly: where we should be investing in lower carbon technologies and 96 00:05:25,230 --> 00:05:27,870 Liam Connolly: investing there because that's to the betterment of the world. 97 00:05:27,870 --> 00:05:31,020 Liam Connolly: But then there's also the pragmatic view is that there is a 98 00:05:31,020 --> 00:05:34,230 Liam Connolly: return on this capital. And the question in what's difficult 99 00:05:34,230 --> 00:05:36,270 Liam Connolly: is how do you balance those two and where is the 100 00:05:36,270 --> 00:05:39,599 Liam Connolly: right tipping point? And one thing that we found, so 101 00:05:39,599 --> 00:05:43,169 Liam Connolly: we surveyed more than 600 energy natural resource executives across 102 00:05:43,200 --> 00:05:45,779 Liam Connolly: the globe, and what we learned there was that only 103 00:05:45,779 --> 00:05:49,260 Liam Connolly: about one quarter of their total capital was actually being 104 00:05:49,260 --> 00:05:54,090 Liam Connolly: allocated to new low carbon growth areas. And a lot, 105 00:05:54,150 --> 00:05:56,640 Liam Connolly: as you note, is actually being paid back to shareholders. 106 00:05:56,670 --> 00:05:59,609 Liam Connolly: And so the question is, well, how do we actually 107 00:05:59,670 --> 00:06:03,900 Liam Connolly: get companies to allocate more capital to these new carbon 108 00:06:03,900 --> 00:06:08,759 Liam Connolly: growth areas versus necessarily the alternative uses of that capital? 109 00:06:09,510 --> 00:06:11,279 Sean Aylmer: So Liam Connolly from Bain, do you have an answer 110 00:06:11,279 --> 00:06:12,839 Sean Aylmer: to that particular tricky one? 111 00:06:13,860 --> 00:06:15,988 Liam Connolly: I mean, there is some answer to how do you think about that. 112 00:06:15,990 --> 00:06:19,710 Liam Connolly: And what we found is, well, okay, we know that 113 00:06:19,710 --> 00:06:23,400 Liam Connolly: there's significant new earnings available. We believe that the anti 114 00:06:23,400 --> 00:06:27,089 Liam Connolly: transition could generate at least $ 55 billion of new earnings 115 00:06:27,089 --> 00:06:30,959 Liam Connolly: every year if the worlds have approached the $4. 6 trillion 116 00:06:30,959 --> 00:06:33,480 Liam Connolly: in investment. Now, the challenge is, well, how do you 117 00:06:33,480 --> 00:06:37,229 Liam Connolly: get the capital return on that? And there's a couple 118 00:06:37,230 --> 00:06:39,660 Liam Connolly: of things. One is a lot of companies, they're actual 119 00:06:39,660 --> 00:06:45,150 Liam Connolly: existing how they spend capital isn't necessarily being adapted to 120 00:06:45,150 --> 00:06:49,259 Liam Connolly: effectively handle low carbon projects and the different benefits and 121 00:06:49,259 --> 00:06:51,900 Liam Connolly: risk return profiles they present. That's one thing, is how do 122 00:06:51,900 --> 00:06:56,159 Liam Connolly: you actually think about your internal capital approvals processes to 123 00:06:56,160 --> 00:07:00,029 Liam Connolly: think through managing the different risk return profiles of those 124 00:07:00,029 --> 00:07:04,109 Liam Connolly: low carbon projects? The second is open new markets via 125 00:07:04,110 --> 00:07:06,000 Liam Connolly: policy. And I think this is where we're starting to 126 00:07:06,000 --> 00:07:09,689 Liam Connolly: see some movement from governments putting in place policy incentives. 127 00:07:09,690 --> 00:07:14,070 Liam Connolly: But how do companies actually advocate with governments around these 128 00:07:14,070 --> 00:07:17,400 Liam Connolly: new markets to open them? I think thirdly is another 129 00:07:17,400 --> 00:07:20,550 Liam Connolly: one is how do you build the commercial mindset to 130 00:07:20,550 --> 00:07:25,230 Liam Connolly: work with your customers on these new lower carbon products and 131 00:07:25,230 --> 00:07:29,760 Liam Connolly: investments? And so what that requires is understanding, " Well, if 132 00:07:29,760 --> 00:07:31,860 Liam Connolly: we invest in this well, how do we actually understand 133 00:07:31,860 --> 00:07:34,770 Liam Connolly: who's the customer that's going to offtake that? What's the benefit to that 134 00:07:34,770 --> 00:07:37,740 Liam Connolly: customer? Would they be willing to pay a premium or 135 00:07:37,740 --> 00:07:40,320 Liam Connolly: not? And therefore how do we weigh that up?" And 136 00:07:40,320 --> 00:07:43,649 Liam Connolly: then actually looking at, well, " Are there other creative financing 137 00:07:43,650 --> 00:07:45,540 Liam Connolly: solutions that we could put in place to try and 138 00:07:45,540 --> 00:07:47,999 Liam Connolly: reduce the cost of capital?" So there are a few 139 00:07:48,180 --> 00:07:50,820 Liam Connolly: levers to pool. The challenge is none of them are 140 00:07:50,820 --> 00:07:55,110 Liam Connolly: easy on their own, but they all require effort and 141 00:07:55,110 --> 00:07:57,030 Liam Connolly: work to bring to fruition. 142 00:07:57,540 --> 00:07:59,160 Sean Aylmer: Stay with me, Liam. We'll be back in a minute. 143 00:08:05,400 --> 00:08:07,770 Sean Aylmer: My guest this morning is Liam Connolly who leads the 144 00:08:07,770 --> 00:08:12,090 Sean Aylmer: energy transition practice at Bain. What about the end users 145 00:08:12,090 --> 00:08:14,520 Sean Aylmer: here? So that might be a business, but it might 146 00:08:14,520 --> 00:08:18,450 Sean Aylmer: actually be someone's mom and dad at home not wanting 147 00:08:18,450 --> 00:08:22,259 Sean Aylmer: to pay even a small increase in utility bills, they 148 00:08:22,440 --> 00:08:25,049 Sean Aylmer: sort of think that it's a government role rather than 149 00:08:25,049 --> 00:08:28,320 Sean Aylmer: an individual role, and that kind of makes it a 150 00:08:28,320 --> 00:08:30,420 Sean Aylmer: bit tricky, doesn't it? I mean, my personal view is 151 00:08:30,420 --> 00:08:31,560 Sean Aylmer: I think we're all going to have to pay for 152 00:08:31,560 --> 00:08:33,630 Sean Aylmer: it. Now, I'd prefer to pay for it out of 153 00:08:33,630 --> 00:08:36,420 Sean Aylmer: my pocket than get taxed more, but others would argue 154 00:08:36,420 --> 00:08:40,439 Sean Aylmer: the other way. Fair enough. But it means there's a big 155 00:08:40,440 --> 00:08:44,520 Sean Aylmer: role for government in facilitating the shift, even apart from 156 00:08:44,520 --> 00:08:45,960 Sean Aylmer: just providing incentives. 157 00:08:46,770 --> 00:08:51,059 Liam Connolly: It does. It does. And we see this often with 158 00:08:51,059 --> 00:08:57,570 Liam Connolly: regards to sustainability or sustainable products, whether it be energy 159 00:08:57,570 --> 00:09:00,990 Liam Connolly: transition related or not. But there's often what we say 160 00:09:01,050 --> 00:09:04,679 Liam Connolly: a say- do gap. Customers are saying they're willing to 161 00:09:04,679 --> 00:09:07,230 Liam Connolly: pay more, but when the rubber hits the road, that 162 00:09:07,230 --> 00:09:11,489 Liam Connolly: doesn't actually necessarily come to fruition. And so the question 163 00:09:11,490 --> 00:09:15,598 Liam Connolly: is, well, how do you ensure that we can have customers 164 00:09:15,599 --> 00:09:17,039 Liam Connolly: willing to pay for it or how do you pay 165 00:09:17,039 --> 00:09:19,800 Liam Connolly: for it? And as you know, government and taxation is 166 00:09:19,800 --> 00:09:22,320 Liam Connolly: one thing. One thing we found in the survey is 167 00:09:22,320 --> 00:09:25,380 Liam Connolly: that, quite frankly, consumers are just unwilling to even pay 168 00:09:25,380 --> 00:09:28,139 Liam Connolly: a small increase in utility bills. And there was by 169 00:09:28,139 --> 00:09:32,610 Liam Connolly: far a preference to raise taxes on wealthy households, and 170 00:09:32,610 --> 00:09:36,029 Liam Connolly: therefore the view that government should intervene to bring down 171 00:09:36,179 --> 00:09:39,929 Liam Connolly: those consumer bills. And I think that's even forefront now, 172 00:09:39,929 --> 00:09:42,390 Liam Connolly: particularly if you look at the rising energy costs that 173 00:09:43,260 --> 00:09:45,598 Liam Connolly: we've seen in Australia, but what you're seeing in the 174 00:09:45,599 --> 00:09:48,780 Liam Connolly: UK. And yes, there's some external events which are driving 175 00:09:48,780 --> 00:09:51,990 Liam Connolly: that currently. But I think that is something which we 176 00:09:51,990 --> 00:09:56,670 Liam Connolly: have to really consider as to, well, what is the right 177 00:09:56,670 --> 00:09:59,699 Liam Connolly: approach here? And that has been one of the reasons 178 00:09:59,700 --> 00:10:04,200 Liam Connolly: why companies have been holding back on investing because the 179 00:10:04,200 --> 00:10:08,009 Liam Connolly: return on that investment isn't there if customers or the 180 00:10:08,009 --> 00:10:10,889 Liam Connolly: end users are not necessarily paying more for it. And 181 00:10:10,889 --> 00:10:12,239 Liam Connolly: so I think that's a question that we need to 182 00:10:12,240 --> 00:10:15,210 Liam Connolly: work through because it does start to bring in other 183 00:10:15,210 --> 00:10:18,720 Liam Connolly: elements such as the just transition. What about people that 184 00:10:18,720 --> 00:10:21,719 Liam Connolly: can't afford that and are just scraping by and trying 185 00:10:21,719 --> 00:10:25,290 Liam Connolly: to manage their own spend? They're not the ones, quite 186 00:10:25,290 --> 00:10:28,439 Liam Connolly: frankly, that are keen to spend more on greener energy 187 00:10:28,440 --> 00:10:31,170 Liam Connolly: because they're struggling day to day with just the cost 188 00:10:31,170 --> 00:10:31,590 Liam Connolly: of living. 189 00:10:31,890 --> 00:10:35,100 Sean Aylmer: Yeah. Yeah. Okay. Look, the report also looks at the booming 190 00:10:35,100 --> 00:10:39,870 Sean Aylmer: demand for critical minerals, things like nickel, cobalt, lithium. Where 191 00:10:39,870 --> 00:10:42,149 Sean Aylmer: were we up to on that? Are there enough of 192 00:10:42,150 --> 00:10:46,949 Sean Aylmer: those minerals around or have we done enough to reduce 193 00:10:46,949 --> 00:10:49,199 Sean Aylmer: the price in them? I know lithium, there's a few 194 00:10:49,200 --> 00:10:51,870 Sean Aylmer: reports in the last week that lithium prices will come 195 00:10:51,870 --> 00:10:54,929 Sean Aylmer: off. They're still about, I think they're up 200% or 196 00:10:54,929 --> 00:10:56,728 Sean Aylmer: something around that in the last year or so. So they're still 197 00:10:56,730 --> 00:10:58,770 Sean Aylmer: pretty high. Where's all that up to? 198 00:10:59,670 --> 00:11:02,189 Liam Connolly: Yeah, it's interesting. And critical minerals I do think is 199 00:11:02,880 --> 00:11:05,699 Liam Connolly: one which is going to require an unlock just given 200 00:11:05,699 --> 00:11:08,490 Liam Connolly: the surge in demand that we expect to see from critical 201 00:11:08,490 --> 00:11:10,800 Liam Connolly: minerals in the future, which by the way is good 202 00:11:10,800 --> 00:11:13,890 Liam Connolly: news for Australia. If I was just to look forward 203 00:11:13,890 --> 00:11:17,190 Liam Connolly: 10 years, and let's talk critical minerals, lithium, copper, and 204 00:11:17,190 --> 00:11:21,569 Liam Connolly: nickel, rare earths, there's going to be significant demand increase 205 00:11:21,599 --> 00:11:25,020 Liam Connolly: increases for those minerals. And the reason why is if I 206 00:11:25,020 --> 00:11:28,920 Liam Connolly: take an EV, that requires five times the critical minerals 207 00:11:29,010 --> 00:11:33,719 Liam Connolly: than an internal combustion engine vehicle today. And renewable power 208 00:11:33,719 --> 00:11:35,880 Liam Connolly: requires three and a half times the critical minerals and 209 00:11:35,880 --> 00:11:40,199 Liam Connolly: conventional power. What that translates to is in the next 210 00:11:40,199 --> 00:11:42,510 Liam Connolly: 10 years, we're going to see sort of a sevenfold 211 00:11:42,570 --> 00:11:45,689 Liam Connolly: increase in the global demand for lithium. Copper is going 212 00:11:45,690 --> 00:11:50,370 Liam Connolly: to increase, nickel and rare earth is going to increase 200%. So 213 00:11:51,000 --> 00:11:52,978 Liam Connolly: the challenge then is, well, how do we actually get 214 00:11:52,980 --> 00:11:57,210 Liam Connolly: those minerals out of the ground to do that? And 215 00:11:57,330 --> 00:11:59,670 Liam Connolly: one of the things that we're seeing is actually the 216 00:11:59,670 --> 00:12:04,140 Liam Connolly: time it takes to go from discovery to production of 217 00:12:04,140 --> 00:12:08,939 Liam Connolly: these minerals, if you look at the period from 2010 to 2019, 218 00:12:08,970 --> 00:12:11,940 Liam Connolly: it's about 17 years from when you discover and go 219 00:12:11,940 --> 00:12:16,169 Liam Connolly: through feasibility to when you're in production. That's four years 220 00:12:16,170 --> 00:12:19,199 Liam Connolly: longer than what it used to be. So I think there's 221 00:12:19,380 --> 00:12:22,590 Liam Connolly: a challenge there as well as to say, well, okay, 222 00:12:22,590 --> 00:12:25,920 Liam Connolly: there is a significant increase in demand for critical minerals, 223 00:12:26,340 --> 00:12:29,190 Liam Connolly: but the lead time to bring on critical minerals is 224 00:12:29,190 --> 00:12:31,440 Liam Connolly: actually longer than what it has been historically due to 225 00:12:31,440 --> 00:12:34,139 Liam Connolly: a host of reasons. So therefore, how do we actually 226 00:12:34,379 --> 00:12:39,330 Liam Connolly: unlock that? And while that presents some challenges for the 227 00:12:39,330 --> 00:12:43,620 Liam Connolly: globe and the energy transition, Australia is in quite a good position to 228 00:12:43,620 --> 00:12:45,599 Liam Connolly: take advantage of that, and we actually see that as 229 00:12:45,599 --> 00:12:48,000 Liam Connolly: one of the greatest opportunities for Australia from an export 230 00:12:48,000 --> 00:12:50,129 Liam Connolly: perspective is in the critical mineral space. 231 00:12:51,000 --> 00:12:53,189 Sean Aylmer: Liam, we're about two minutes over time because I've been 232 00:12:53,219 --> 00:12:56,160 Sean Aylmer: carried away by this conversation because I find it incredibly 233 00:12:56,160 --> 00:12:59,429 Sean Aylmer: interesting. One final question though, will we get there? 234 00:13:00,120 --> 00:13:02,400 Liam Connolly: I think we will get there. I think the pathway 235 00:13:02,400 --> 00:13:05,939 Liam Connolly: to get there might be hard to predict at times 236 00:13:06,090 --> 00:13:08,670 Liam Connolly: and external events are going to do that. I think 237 00:13:08,670 --> 00:13:11,458 Liam Connolly: the challenge will be the timing that we get there 238 00:13:12,059 --> 00:13:16,320 Liam Connolly: and significant more capital needs to be deployed into the 239 00:13:16,320 --> 00:13:19,980 Liam Connolly: transition to get there by 2050. And it's probably too 240 00:13:19,980 --> 00:13:22,740 Liam Connolly: early to tell whether we're going to get there. But 241 00:13:22,830 --> 00:13:27,719 Liam Connolly: I think we're seeing at least positive momentum overall despite 242 00:13:27,719 --> 00:13:30,569 Liam Connolly: some tailwinds. So we're moving in the right direction is 243 00:13:30,570 --> 00:13:33,150 Liam Connolly: probably how I would characterize it now. But still a lot 244 00:13:33,630 --> 00:13:35,578 Liam Connolly: of work to do to hit the timelines. 245 00:13:36,090 --> 00:13:37,830 Sean Aylmer: Liam, thank you for talking to Fear and Greed. 246 00:13:38,340 --> 00:13:38,940 Liam Connolly: Thanks, Sean. 247 00:13:39,330 --> 00:13:42,030 Sean Aylmer: That was Liam Connolly who leads the energy transition practice 248 00:13:42,030 --> 00:13:44,760 Sean Aylmer: at Bain. This is the Fear and Greed daily interview. 249 00:13:44,820 --> 00:13:46,769 Sean Aylmer: Join us every morning for the full episode of Fear 250 00:13:46,770 --> 00:13:50,730 Sean Aylmer: and Greed, Australia's most popular business podcast. I'm Sean Aylmer. Enjoy 251 00:13:50,730 --> 00:13:51,120 Sean Aylmer: your day.