Is 2026 Australia's national fortune year? Local economics PhD analyzes how AI drives demand for lithium and rare earths, garnering millions of views.

Recently, market and community discussions have circulated a theory: under the backdrop of artificial intelligence (AI) driving a surge in demand for computing power, electricity, and key minerals, Australia may usher in a new “national fortune cycle.” Roland (Roland Wayne), a medical and economics PhD who has lived and researched in Australia for many years, recently published an in-depth analysis pointing out that AI is rewriting the profit distribution structure of global value chains. The importance of physical resources is rising, and Australia, with its abundant critical minerals, indeed has the opportunity to gain an advantage in this industry restructuring.

However, Roland also emphasizes that owning minerals does not guarantee victory. The key to whether Australia can welcome a “new national fortune” depends on factors such as processing capacity, institutional design, talent reserves, and geopolitical strategies. Without upgrades in these areas, even resource-rich countries may remain in low value-added positions within the global value chain.

AI Reshapes Global Value Chains, Resource Importance Reasserted

In his article, Roland notes that the global economy over the past thirty years has essentially been an era of knowledge premium. In the so-called “smile curve,” high value-added industries like R&D, design, branding, and financial services are at both ends of the curve, capturing the most profit, while manufacturing, assembly, and raw material supply at the center earn the thinnest margins.

For example, in smartphones, brands and software companies often capture the largest value, while companies responsible for assembly and component production only earn a tiny share. Industries involved in programming, financial modeling, or brand management tend to earn higher returns than mining or raw material production.

But the emergence of AI is shaking up this structure. Generative AI significantly lowers the costs of many “routine knowledge work,” such as coding, translation, and report writing, tasks that can increasingly be handled by AI. As the scarcity of knowledge diminishes, profit distribution within the global value chain may undergo a reshuffle. Roland believes that when knowledge costs approach zero, the truly scarce resources will become the physical infrastructure supporting AI operations— including computing power, data centers, electricity, and the underlying mineral resources.

AI Is a Power-Hungry Monster, Backed by Massive Mineral Demands

The development of AI is not just a software issue; it heavily depends on energy and hardware infrastructure. AI data centers require vast amounts of electricity and cooling systems, as well as copper for electrical grids and transmission equipment, lithium for energy storage batteries, and rare earth elements for high-efficiency motors and electronic components. In other words, the core of AI is not in the cloud but in mines and power grids. Therefore, Roland believes that as AI demand explodes, global demand for critical minerals like copper, lithium, and rare earths may also increase simultaneously. This is where Australia’s advantages lie.

Currently, Australia is one of the world’s largest producers of lithium and a significant supplier of rare earths and cobalt. It also possesses large reserves of copper and natural gas. Roland points out that if AI drives a new wave of mineral demand, Australia could indeed become a key node in the global supply chain.

Learning from History: How to Avoid the “Resource Curse”

While discussions about Australia’s “new national fortune” are gaining traction, resource abundance does not guarantee economic success. Roland notes that many resource-rich countries in history have fallen into the so-called “resource curse,” such as Venezuela and some African nations. The short-term prosperity brought by resources can lead to over-reliance on a single industry, weakening the development of manufacturing and other sectors.

He cites Norway and Saudi Arabia as examples. Both countries have abundant oil resources, but their development paths are vastly different. Norway has transformed its oil revenues into long-term national wealth through sovereign funds and institutional design, while Saudi Arabia has long depended on oil-based economy, resulting in a relatively single industry structure. Roland believes that Australia’s current challenge is similar to Norway’s past: the key lies in whether it can convert mineral resources into higher-value industries.

Roland points out that Australia’s role in the global mineral supply chain still mainly remains at the “mining” stage. Take lithium, for example: although Australia is the world’s largest lithium producer, most of its lithium ore is exported overseas for processing, especially to China. This means Australia’s position in the value chain is still upstream as a raw material supplier. To truly seize the opportunities brought by AI, Australia must upgrade from selling ore to selling processed materials and even gain pricing power in the supply chain.

However, this path is not easy. Building refining plants requires substantial capital, long construction periods, and highly specialized engineering talent. Australia’s talent pool in metallurgy and chemical engineering is limited. Additionally, environmental regulations and labor costs make refining costs higher than in Asian countries—these are real challenges for industry upgrading.

Even if Australia succeeds in moving from mining to processing, the true top of the AI-driven value chain may still not be in Australia. Currently, the core of the global AI industry remains in the hands of a few tech giants, such as chip design, AI models, and cloud infrastructure. Australia lags far behind the US and China in AI R&D investment and industry scale, and lacks world-class AI companies. Therefore, even if mineral demand increases, Australia might just shift from selling iron ore to selling lithium and rare earths to US tech companies.

Is 2026 Australia’s Year of National Fortune? An Economics PhD in the Region Analyzes AI-Driven Lithium and Rare Earth Demand, Achieving Millions of Views. Originally published on Chain News ABMedia.