Australia is positioning itself as a global powerhouse in the critical minerals sector, with the Albanese government announcing a commitment of $500m from the Northern Australia Infrastructure Facility (NAIF) to kickstart the development of a robust critical minerals processing industry.
This move aims to create substantial economic growth and generate over 260,000 new jobs by 2040.
As countries worldwide rush to enhance energy security and reduce dependence on China for crucial minerals such as lithium, Australia is taking steps to review its critical minerals list by 2026.
The strategy, set to be released by Resources and Northern Australia Minister Madeleine King, aims to bolster downstream processing and manufacturing of critical minerals in Australia, which are integral components of batteries, electric vehicles, wind turbines, and solar panels.
Australia faces tough competition from other countries, but the government has set ambitious targets for the nation to become a globally significant producer of both raw and processed critical minerals, while establishing sovereign capability in critical minerals processing by 2030.
However, concerns have been raised about the potential costliness of establishing processing facilities or battery factories in Australia. Nevertheless, the $500m investment from NAIF, expected to be the first major investment in the sector by the federal government, shows its commitment to supporting the critical minerals industry.
In addition, the government plans to monitor foreign investment in Australian critical minerals projects to safeguard national interests.
The demand for battery minerals, such as lithium, is projected to increase dramatically between 2020 and 2040, creating significant opportunities for Australia. The country boasts some of the largest untapped sources of critical minerals, including cobalt, lithium, manganese, rare earth elements, tungsten, and vanadium.
However, the government has cautioned that Australian processors and manufacturers may face challenges in accessing mineral supplies in the future due to the majority being exported overseas.
The new critical minerals strategy emphasises the potential for sector development and the establishment of downstream industries that will support Australia’s economy and contribute to global emissions reduction efforts.
While Australia possesses a natural advantage with its abundant mineral resources, further action is needed to create jobs and fully capitalise on this unique opportunity.
To fund critical minerals projects in the northern states, $500m will be ring fenced from the next $2 billion tranche of funding going into NAIF. The federal government has already committed $1.1 billion, with a bill currently before parliament to increase the total available to $3.1 billion. The strategy also focuses on encouraging international investment in downstream processing and manufacturing sectors.
As part of the critical minerals strategy, the federal government plans to review Australia’s list of 26 critical minerals, aligning with other countries’ efforts to strengthen energy security and reduce reliance on China for key products like lithium.
Industry stakeholders have advocated for the inclusion of nickel, zinc, and tin in the new critical minerals list. There is also the possibility of creating a secondary list specifically related to elements needed to achieve net-zero emissions.
Australia’s race to become a global critical minerals superpower presents significant opportunities for economic growth, job creation, and technological advancement. The government’s commitment, combined with its abundant mineral resources, positions Australia well in the global market. By capitalising on this advantage, the country can secure its future in the critical minerals industry and contribute to global sustainability efforts.