Industry leaders call for strategic government intervention to prioritise local scrap consumption and rejuvenate manufacturing capabilities amidst global competition.
Metal Casting Industry leaders and the Australian Foundry Institute are calling on the government to recognise the challenges facing the metal casting sector in Australia.
The Australian metal casting industry differentiates itself on the global markets with its high-quality product, technical know-how, and the strong partnerships the metal casting businesses form with their customers.
Australian metal casters export ferrous and non-ferrous castings to Europe, Asia, North and South America and Africa.
The cast metal industry in Australia heavily relies on recycled materials, primarily sourced from locally produced metal scrap as a feed material, but faces strong competition from international markets like China.
As Keiran Slattery, managing director at Hayes Metals and NSW President of the Australian Foundry Institute explained, the metal casting industry is vital for both sovereign capability and the wider Australian economy.
“The future of Australia’s metal casting industry hinges on Government action. Without it, we risk losing not just our economic edge but our national security capabilities in the event of crisis,” he said.
Slattery further warned that without federal support, the Australian metal casting industry could lose the ability to recycle domestically generated scrap metal locally. Australian industry can take advantage of the stored energy in scrap to recycle at home but now struggles to compete against global rivals for our scrap resources.
“It is time for the Government to take our calls seriously and create more sovereign capability for our Australian foundries before it is too late,” he said.
A snapshot of the industry
Metal casting is a manufacturing process where molten metal is poured into a cavity to form parts and components.
This method allows casters to produce complex and detailed shapes that are difficult to achieve with other techniques.
By using various metals and casting methods, casters can ensure that the final products meet all specified design requirements including integrity, strength and durability.
Non-ferrous metals include aluminium, copper, lead, nickel, zinc, and tin, each of which are valued for their specific metallurgical & mechanical properties.
Whereas ferrous metals are metals that contain iron as their principal element. Iron and steel continue to be vital for the global economy.
Crucially, the metal casting industry supports Australia’s sovereign capability by ensuring a resilient supply chain for the Australian Defence Force (ADF) and all of the major industries in Australia.
The Australian Foundry Institute (AFI) plays a vital role in representing and advancing the interests of this sector, focusing on enhancing national industrial capabilities, particularly in defence manufacturing.
With more than 100 foundries and die-casting plants across the country, employing thousands of skilled workers, the industry generates around $1 billion for the Australian economy annually.
Essentially, metal casting is key to producing high-quality parts efficiently and economically.
“It’s crucial to keep this industry thriving in Australia. While we might import cars or taps, the real concern arises when we face supply disruptions from other countries,” said Slattery.
“The COVID-19 pandemic highlighted this vulnerability, and with current geopolitical uncertainties, the risk of such disruptions remains.
“Maintaining a robust domestic metal casting industry ensures we have the capability to produce essential components when global supply chains falter.”
Additionally, the AFI has raised concerns over the cost of utility prices, which are in turn impacting the production cost in foundries.
Brett Lawrence, AFI national president and general manager of Australia’s largest iron foundry Intercast & Forge, said: “Utility prices across the Nation with the exception of Western Australia, both from a gas and electricity perspective, have certainly increased substantially.”
“Energy supply is a fundamental building block for manufacturing in particular, and Australia has lost the competitive advantage that local lower energy costs once enabled.”
The problem
The non-ferrous metal casting industry relies heavily on metal scrap to create ingots, as opposed to raw materials.
The reason for this is that using scrap reduces the overall cost of feed materials compared to using primary metals, which can be more expensive to extract and process.
Additionally, recycling both ferrous and non-ferrous scrap helps conserve natural resources and reduces environmental impact by minimising mining and refining activities by utilising the “stored energy” contained in scrap metal.
“When primary aluminium is produced in a smelter, it requires a significant amount of electrical power to convert alumina powder into solid aluminium forms,” said Slattery.
“However, once aluminium is in its solid state, recycling it only requires about 10 per cent of the original energy cost.
“This makes scrap aluminium highly valuable, especially to overseas markets like China, which imports scrap from around the world.”
As Slattery continued to explain, global competitors such as Japan, Korea and China have benefited from purchasing non-ferrous scrap, as the energy costs have already been incurred during the initial production phase thus avoiding the need to generate that extra energy themselves.
Many Countries have been utilising non-ferrous scrap metal for decades, but now as their demand for non-ferrous scrap increases, Australian metal casters are left with the ‘scraps’.
“China initially lacked primary smelters due to power shortages, so they began importing scrap metal from Australia Europe and America decades ago,” said Slattery.
“Over time, China has substantially increased its domestic electric power generation thus enabling it to build more primary aluminium smelters than any other country, yet they continue to purchase Australian scrap.
“Australia with its abundance of bauxite deposits and competitive mining and refining activities, once produced 10 per cent of the world’s primary aluminium, about 2.5 million tonnes yearly. Now, production has dropped due to high energy costs, even as global demand has risen.”
The pandemic lead to a disruption in global supply chains that forced casting buyers to reconsider their purchasing strategies. The subsequent scramble to onshore was offset by the rising input costs for those feed materials that had to be imported together with rising energy costs.
Casting Buyers that sourced Australian made product now prefer local suppliers for the security and certainty of a more reliable supply chain.
However, with input costs soaring, profit margins are squeezed resulting in a challenging financial environment.
A call to action
Slattery and other industry leaders are calling for the Government to recognise the metal casting industry and consider measures to revitalise it.
“We aim to stabilise and potentially grow the metal casting industry with the right support and understanding from the government,” said Amber Maxwell, president of the Australian Foundry Institute, Victoria division.
“We’re not seeking a handout but rather recognition and support of our industry’s expertise, capabilities and critical contribution to our daily lives.
“If our contributions in metal casting aren’t acknowledged and leveraged, there’s a risk that our metal casting businesses could be lost.”
The leaders are ultimately calling for strategic measures to, boost domestic manufacturing capabilities, enhance sovereign capability and support local scrap consumption
They believe that achieving these goals depends on government intervention and the introduction of incentives to attract the next generation of Australian workers into the industry.
“The ‘Made in Australia’ campaign is a great initiative, but its success hinges on genuine commitment at all levels,” said Maxwell.
“For it to make a real impact, it needs to be supported and understood from the grassroots up.”
This sentiment is affirmed by Lawrence.
“We need to return to grassroots and start discussing the value of manufacturing with students in schools,” he said.
“Victoria has been running a program for a few years now, introducing casting concepts through the ‘Foundry in a Box’ initiative at some high schools. This program provides students with a “hands on” manufacturing experience whilst at the same time engaging them in conversations about pathways and opportunities for what a career in the manufacturing industry offers”
“We’re working to expand this program into other states, as there is significant demand. It’s also important to educate career advisors, as many currently do not understand the opportunities within the metal casting or manufacturing industry” explained Maxwell
Slattery also explained that there’s potential for innovation within the industry, as the CSIRO previously invested resources into researching alloys.
“Australia was once a leader in metal research, with significant contributions at both state and federal levels,” he said.
“Institutions like the CSIRO conducted extensive research in Victoria, and had facilities such as the CAST in Queensland, receiving funding from both the government and industry.
“Unfortunately, many of these research capabilities have dwindled.”
Previously, major companies invested in alloy research, but those centres are no longer operational.
Slattery said that there’s a need to focus more on developing new materials and improving existing ones.
“Big companies like Rio Tinto had centres focused on alloy development, such as the Research Centre in Melbourne,” he said.
“However, these facilities no longer exist. There is a pressing need to reinvest in research in Australia, particularly in developing new alloys, such as scandium-enhanced aluminium.”
Scandium is a rare metal that, when added to alloys like aluminium, can improve their performance. A small amount of scandium makes these alloys much stronger and more durable, while also making them lighter.
“There are many opportunities to improve alloys in this way. For the Australian casting industry, it’s crucial to highlight our capabilities and capacities to ensure we remain competitive,” says Maxwell.
Lawrence said that the Australian Government should prioritise local suppliers to preserve critical skills and industries.
“From a government perspective, purchasing policies—both federal and state—should prioritise Australian manufacturers to ensure we retain essential skills,” he said.
“Unlike Europe or the US, where foundries can be mothballed and later reactivated, Australian foundries often face permanent closure.
“I believe state governments need to recognise that our market is unique and may require different considerations compared to other markets they are benchmarking against.”
Ultimately, the Australian metal casting industry stands at a critical juncture, facing both challenges and opportunities.
With global competition intensifying and domestic resources under pressure, there is a pressing need for strategic government intervention to ensure the sector’s survival and growth.
By prioritising local scrap consumption, investing in research and development, and fostering educational initiatives, Australia can strengthen its metal casting industry and secure its role in the global market.
The essence of what the industry is attempting to communicate is the ingenuity of foundries to work with customers to develop complex and cost-effective functional solutions for their needs.
As an industry we are a key recycler of metal scrap utilising our engineering & metallurgical expertise to repurpose scrap into functional castings with the mechanical properties required by virtually every market segment of our economy.