More a mindset than economics. Mining is what Australia does. No-one really knows how to set up a manufacturing base. Investors aren't willing to invest in it. There's no end of stories about how it's too small of a domestic market, and too far from export markets (all of which are true for lots of other countries with thriving export markets), or that the labour costs are too high (also true for Germany, which has a thriving manufacturing export industry). And everyone's rich from mining, so why bother?
Same for the solar industry. If there was ever a place to build enough solar to power the planet, it's Western Australia. We could build the batteries, too, from local ingredients. But it's all too hard and too complicated and why do that when we can make enough money from just mining the lithium?
Don't get me started. There's a 4-hour rant I have about that hehe
Aussies think that they're in competition with other mining countries to supply the Chinese. From a mining executive perspective, I get this. You need all that revenue now.
But from the country's point of view, it's a disaster. Non-renewable resources are being exported as cheaply as possible in as large a quantity as possible. The royalty system works on revenue earned, so the taxes are tiny compared to what they could be if the aim was to maximise the value of each Kg of ore.
So yes, suggesting that we tax the exports more brings cries of "making Australia uncompetitive" and that it'll destroy the mining industry, and then what will we do?
There's another odd perspective on this in Jared Diamond's book Collapse, in the "Mining Australia" chapter:
> Most of Australia's remaining agriculture is in effect a mining operation that does not add to Australia's wealth but merely converts environmental capital of soil and native vegetation irreversibly into cash, with the help of indirect government subsidies [...]
That is, similarly to how mining activity depends upon consuming non-renewable stocks of ore or fossil-fuel* that can be extracted with sufficiently low energy cost, the argument is that agricultural activity depends upon consuming stocks of high-quality soil at a much faster rate than the stock of high-quality soil can be being refilled. If the rate of consumption is much higher than the rate of production then high-quality soil is effectively non-renewable.
* i guess fossil fuels are also "renewable" in a literal interpretation of the word that it is possible to refill stocks, given a long enough time horizon (billions of years?) & a willingness to take a bit of a gamble that the conditions for large-scale fossil fuel creation will recurr, provided the rate of consumption of fossil fuel slows.
This was/is certainly true of the vast sheep stations. Sheep farming was a disastrous decision for Australia, made because British garment manufacturing needed more cheap wool[0]. IIRC this is part of that chapter of the book.
But recently, there's been much more of a move to less destructive practices. Lots of mediterranean-type farms (olives, wine, etc) more suitable to the soil and climate.
[0]anecdata: in the late 80's I worked on an English sheep farm, at 100 sheep to the acre, and cut their toenails. I also worked on an Aussie sheep farm, at 100 acres to the sheep, and had to kill flyblown sheep being eaten alive by maggots. Crazy contrast.
From skimming through the report, there are also applications to use directly use hydrogen as an input to produce ammonia, and also an argument that existing means of shipping ammonia could be used to ship hydrogen, conditional on research that can extract hydrogen out of ammonia with low energy input.
I don't have a handle on what kind of policies would be needed to encourage private investment in hydrogen vs coal, gas, oil (assuming it is even a good idea). There's a graph of estimated prices of hydrogen vs alternatives in various uses in the report (search for "breakeven"). It does not look price competitive in many applications, but I assume the comparison does not include price adjustment that account for the externalised environmental costs of one energy source versus another.
Regardless of hydrogen or solar or batteries or whatever, a carbon tax with a price set to help internalise the externalised costs of greenhouse gas emissions would be a great way to push activity in a better direction, regardless of if that is hydrogen or anything else that strikes a good combination of efficiency & low greenhouse gas impact. Perhaps the carbon tax could be rolled out nationally with tariffs put in place to penalise the import of goods & services produced in other countries that did not yet have an comparable carbon tax installed.
Same for the solar industry. If there was ever a place to build enough solar to power the planet, it's Western Australia. We could build the batteries, too, from local ingredients. But it's all too hard and too complicated and why do that when we can make enough money from just mining the lithium?