In my twenties, working as a young fund manager at BT Funds Management in Sydney, I used to catch the ferry to work most mornings. So did Kerr Neilsen. Kerr was BT’s star fund manager at the time, and he later went on to found Platinum Asset Management and become Australia’s first fund manager billionaire. He was also full of pearls of wisdom for any junior who would listen, which I did.

I remember fretting one morning about some idealistic problem in the world. The kind of thing a young man will worry about when he has just discovered that the adults haven’t yet fixed everything. Kerr listened, and then said something like: Richard, don’t be idealistic, you can’t solve this problem, just work out what is going to happen and make money.

It was somewhat mercenary. It was also a useful piece of mental furniture for a young analyst, and it has stayed with me. There is a particular kind of problem where the structural forces are so entrenched that the question worth answering is not “how do we fix this?” but “given that this won’t be fixed, what happens next?”

Australia’s mineral processing crisis is one of those problems.

Exporting rocks, importing metals

The country is in the middle of a slow-motion industrial unwinding that very few people seem willing to acknowledge for what it is. Australia has world-class deposits of bauxite, iron ore, copper, zinc, lead, lithium, and rare earths. Some of the best deposits on earth, in fact. But the step in the value chain where rocks become usable metals – the processing step – is being lost, smelter by smelter, refinery by refinery.

Aluminium has long been called “congealed electricity,” and the metaphor extends naturally across the industry. The Tomago smelter in New South Wales consumes around 12% of the state’s total electricity and received a taxpayer-funded deal to keep it operating beyond 2028. In November 2025 the Tasmanian government brokered a 12-month power deal extension with Hydro Tasmania to keep Bell Bay Aluminium running while a long-term agreement is negotiated. Glencore’s copper smelter at Mount Isa survives on a $600 million federal-state lifeline that runs out at the end of 2028. Nyrstar’s $135 million bailout for its Port Pirie lead and Hobart zinc smelters has now expired with no replacement deal, and 1,400 jobs hang in the balance. Whyalla’s steelworks, which produced ~75% of Australia’s structural steel, received a $2.4 billion rescue package. Meanwhile, Lynas, an Australian rare earths company, mines its ore in Western Australia and ships it to Malaysia for processing, where the facility has accumulated more than a million tonnes of radioactive water-leach purification residue since 2012.

The pattern is unmistakable. We are exporting our rocks and importing our metals. We are externalising the dirty work of processing to countries with weaker environmental standards, and then congratulating ourselves on our domestic emissions profile. The atmosphere does not recognise national accounting boundaries. The communities downstream of Bayan Obo do not benefit from Australia’s clean air.

The diagnosis is not really in dispute among people who study this closely. It is the cumulative outcome of policy settings that have systematically tilted the competitive field against domestic processing: rising energy costs, an all-in commitment to renewables ahead of most of the developed world, and a refusal to use Australian gas domestically as a bridging fuel even as we export around 70% of our gas production as LNG, with nearly all of it going to Asia.

The most uncomfortable observation is what I would call the interdependency trap. Aluminium smelters need continuous, uninterrupted baseload power. They cannot be cycled with the sun. The smelters anchor the demand that justifies the baseload generators. When a smelter closes, the baseload demand goes with it. When the baseload generator follows, the smelter cannot be reconstituted later, because rebuilding both simultaneously (a gas-fired power station and a greenfield smelter, with the financing and permitting and construction coordinated in parallel) is a problem so complex and capital-intensive that, in practice, no government will do it. The capability, once lost, is lost for good.

The bailout treadmill

That is what is going to happen. The structural decline is settled.

There will be more bailouts. There must be. The political pain of allowing a regional employer to close is too sharp for any government to absorb. So the pattern of the last two years will continue: $600 million here, $135 million there, an emergency package for whichever facility is bleeding hardest. The bailouts will buy time. They will not change the cost structure.

And politically, no realistic course correction is on offer from either side of the aisle. The current government is likely to be in place for another five years or more, and its energy policy has been staked on a renewables-first transition that it cannot easily reverse without admitting a fundamental error of sequencing. The opposition is in no state to offer a credible alternative. The political timeline is long. The structural decline is faster than the political clock.

You can argue about the policy and you can advocate for a different settlement. You can write op-eds about the strategic stupidity of exporting bauxite and importing aluminium. None of that changes what is going to happen.

Two circuit breakers

So what does change it? Two things, I think. The first is war.

I would prefer not to dwell on this. The Iran conflict that began in February 2026 has already provided a live demonstration of what it looks like when concentrated overseas processing capacity goes offline at short notice. Gulf aluminium smelters damaged. Sulphur supplies through the Strait of Hormuz disrupted, constraining sulfuric acid production globally and hitting the processing of copper, nickel, uranium, and rare earths. Force majeure declarations cascading through the supply chains that feed everything from cars to semiconductors. As I wrote in The Stagflation Paradox, the Iran war has stress-tested global supply chains and found them wanting. A larger or longer disruption would force a domestic processing reckoning that current policy has been able to. The risk is real, but I prefer not to think about it.

The second catalyst is technology.

This is where it gets interesting, because politicians are very poor at reversing course on stated commitments. However, they are very good at pivoting to a new story when one is offered to them. A genuinely novel mineral processing technology, with materially better cost structures and environmental footprint, would not require any government to admit it was wrong. It would simply allow the government to say: the equation has changed, and now we have a basis to support domestic processing. The technology becomes the cover story for a policy correction that could not otherwise be made.

You see this pattern across policy domains. Politicians do not abandon positions; they pivot to new ones, and a technical breakthrough is one of the few things that gives them respectable cover to do so. A circuit breaker.

If you are looking for where that breakthrough might come from, you could do worse than the kind of work going on at the University of Queensland’s Sustainable Minerals Institute. They are Australia’s largest co-located minerals research institute, and the Queensland Government’s partner on a multi-year, multi-million-dollar Critical Minerals and Circular Economy Research Alliance focused on identification, processing, and recovery of critical minerals from primary deposits and mine waste. Brisbane is, after all, the largest city in a resources state. The research ecosystem around it is deep, and it generates the kind of deep-tech, regulator-adjacent IP that does not show up on a Bay Area pitch deck.

Which is where the angel lens comes in.

The angel lens

A few years ago I did some capital-raising work for a company called Ubaryon, which I wrote about at length in The Reactor in the Shipping Container. Ubaryon is a Brisbane Angels portfolio company that, while doing environmental work on the tailings of an Australian uranium mine, accidentally discovered a new chemical process for uranium enrichment. The IP is now classified under the Non-Proliferation Treaty framework. The technology, if it scales, could halve the capital and operating costs of enrichment, a market heading toward $40 billion or more. Capital was raised at a A$5 million valuation. Urenco, the dominant Western enrichment company, has since invested with an option to buy the whole company.

I tell that story again here because the pattern matters. Ubaryon was not a venture capital deal. No Sand Hill Road firm was ever going to source it, evaluate it, or write a cheque for it. The IP was too sensitive, the regulatory pathway too specialised, the science too far outside the standard SaaS-and-AI lens. It emerged from a local research ecosystem, was incubated through a local angel group, and was identified by people who happened to be embedded in that ecosystem.

The mineral processing equivalent of Ubaryon, if it exists, will look the same. It will come from a CSIRO laboratory, or an SMI research project, or a spin-out from a metallurgical engineering group at one of the resources-state universities. It will be technical and it will be capital-light at the early stage. It will need patient angel capital to get to the point where larger players will engage. And it will sit in plain sight of any angel network that happens to be located in Brisbane, or Perth, or Adelaide.

Brisbane Angels is in Brisbane. MooCoo’s syndicate co-invests alongside it. We are not going to fix the policy. But we are unusually well-placed to see, evaluate, and back the kind of technological circuit breaker that might.

Don’t fight the policy

Forty years on, I do not entirely agree with the line about not being idealistic. Some idealistic problems are worth working on, even when the structural forces are against you. But for problems where the political timeline is longer than the structural decline, the line is hard to argue with.

Australia’s mineral processing crisis is one of those problems. The bailouts will continue. The smelters will close in sequence. The processing will move to wherever the energy is cheapest and the environmental rules are weakest, which is largely where it has already moved. And somewhere in a Brisbane laboratory, or a Perth research centre, or a CSIRO spin-out, somebody is working on a technology that might, just might, give a future government a reason to change the story.

That is the kind of deal I find myself looking for through the angel lens. Don’t fight the policy. Work out what’s going to happen, and back the catalyst.

Richard Moore is co-founder of MooCoo Ventures, an angel syndicate that co-invests alongside Brisbane Angels, one of Australia’s most active angel groups. He has made over eighty personal angel investments since 2013.

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