Australia announced a groundbreaking strategy that charts its path towards establishing a robust critical minerals processing industry.
The government’s ambitious plan aims to position Australia as a major producer of both raw and processed critical minerals, pivotal to the global energy transition, by 2030, solidifying its position as a renewable superpower.
Government data reveals that Australia, already the world’s largest lithium producer and a significant supplier of rare earths and other metals, currently has 81 critical minerals projects in progress. These projects have an estimated worth of up to $42 billion.
Global competition for battery minerals has intensified in recent years, with companies such as Tesla, General Motors, and Stellantis securing Australian mineral supplies.
However, Australian developers face challenges in securing financing due to substantial costs and corporate lenders’ concerns regarding commodity price risks and untested technologies and industries.
Resources Minister Madeleine King emphasized the need to capitalize on Australia’s natural minerals endowment, stating, “The Strategy makes it clear our natural minerals endowment provides a foot in the door, but we must do more to create Australian jobs and capitalize on this unique opportunity.”
To support the development of critical minerals projects, the government plans to allocate an additional $500 million through the Northern Australia Infrastructure Fund, augmenting the existing $2.3 billion allocation.
These funds supplement the $1 billion announced for value-added resource projects and $3 billion for renewables and low-emissions technologies as part of the national reconstruction fund.
Nevertheless, some developers expressed disappointment over the new allotment, citing comparisons to incentives offered by the United States, Canada, and the European Union. Minister King urged end-users to seek a sustainable and ethical supply source to bridge the funding gap.
The government intends to establish an international program aimed at attracting investments from the United States, the United Kingdom, Japan, Korea, India, and the European Union. Furthermore, efforts will be made to address the domestic skills shortage in the mining, automotive, and manufacturing sectors while encouraging investments in the exploration of critical minerals, considering that 80% of Australia’s land remains unexplored.
While the Association of Mining and Exploration Companies (AMEC) welcomed the strategy, it stressed the need for faster project approvals. Warren Pearce, Chief Executive of AMEC, stated, “We need more efficient and effective regulatory approvals processes to enable mineral exploration and mining projects to be developed in a time-efficient and cost-effective manner.”
Minister King acknowledged the importance of maintaining high standards in permitting and environmental approval processes, indicating collaboration with state counterparts to streamline these processes. The emphasis on maintaining an environmentally and socially responsible supply chain underscores its strategic advantage as Australia builds sovereign capability in key technologies.
AMEC also urged the inclusion of other vital minerals like nickel and copper in Australia’s critical minerals list, citing their potential for decarbonization.
As international companies increasingly secure ownership and supply of Australian minerals, particularly lithium and rare earth elements, concerns arise regarding potential future challenges faced by domestic processors and manufacturers in accessing locally mined minerals. Consequently, the government plans to monitor foreign investment in critical minerals projects to safeguard national interests.