How can investment grow amidst supply chain woes?

Oversupply and supply chain concentrations remain concerns for the critical minerals sector.

Despite this, growth in investment for critical minerals slowed in 2024 amid lower prices, and exploration activity was flat year-on-year, according to the International Energy Agency’s World Energy Investment 2025 report.

The IEA’s assessment of 25 large mining companies suggests that investment in critical minerals mining grew by 5% in 2024, down from 14% growth in 2023. Adjusted for cost inflation, real investment growth in 2024 was just 2%. Diversified mining majors increased capital spending by around 15%, while specialist players scaled back investment by 15%.

Exploration spending in 2024 was closely aligned with 2023. The IEA found that lithium, copper and uranium continued to attract the most investment in exploration, while nickel exploration was significantly affected by the low-price environment and changing battery chemistry choices. Spending for nickel fell by more than 30%.

Lithium demand rose by nearly 30%, but low prices could still be deterring investment. These dynamics continue to show up in Australia’s lithium industry. In July, IGO (ASX: IGO) announced it had fully impaired its 49% stake in the Kwinana lithium hydroxide refinery in WA, citing ongoing operational issues.

The IEA found that demand for nickel, cobalt, graphite and rare earth elements rose by 6-8% in 2024 while copper also saw demand growth of about 3%, outpacing the previous two years.

However, this increase in demand has not been met with a proportional increase in supply.  Supply growth — fueled mainly by producers in China, Indonesia and parts of Africa — has outpaced demand, keeping prices subdued.

This trend, while alleviating immediate cost pressures, raises concerns about the financial viability of producers, especially smaller, specialist mining companies.

One of the most pressing issues in the critical minerals market is the growing concentration of supply. The top three producers of nickel and cobalt have seen their combined market share increase significantly between 2020 and 2024. For nickel, the top three now account for 80% of global supply, while cobalt’s market share is even more concentrated at 90%, according to the IEA. This heavy reliance on a few key players — especially in politically sensitive regions — heightens the risk of supply disruptions.

The IEA emphasises that current investment trends highlight that diversification will not materialise through market forces alone and well-designed policy support and partnerships are essential.

The Federal Government’s Productivity Commision has recently echoed this sentiment in its Investing in cheaper, cleaner energy and the net zero transformation interim report.

The Productivity Commision finds that to achieve net zero at least cost, Australia needs consistent and comprehensive incentives to reduce emissions. This includes action by governments to fill policy gaps, remove overlaps and ensure incentives are neutral towards which technologies can achieve reductions, and in which states and territories. The Productivity Commission also highlights the need for market-based incentives.

The Productivity Commision points out that in many cases it is more expensive to use a clean product or production method than an emissions-intensive one — an extra cost known as the green premium.

A decade ago, investments in fossil fuels were 30% higher than those in electricity generation, grids and storage. This year, electricity investments are set to be some 50% higher than the total amount being spent bringing oil, natural gas and coal to market, the IEA finds.

Globally, spending on low-emissions power generation has almost doubled over the past five years, led by solar PV. Investment in solar, both utility-scale and rooftop, is expected to reach $450b in 2025, making it the single largest item in the global energy investment inventory. Battery storage investments are also climbing rapidly, surging above $65b this year.

In a worrying sign for electricity security, investment in grids, now at $400b/year, is failing to keep pace with spending on generation and electrification. Maintaining electricity security would require investment in grids to rise towards parity with generation spending by the early 2030s, according to the IEA. However, this is being held back by lengthy permitting procedures and tight supply chains for transformers and cables.

China blocks Australian antimony shipment

China has delayed and returned a shipment of Australian critical minerals bound for the US.

The shipment of 55t of antimony concentrate, destined for US Antimony Corporation, was held at the port of Ningbo in the Zhejiang Province for three months before being released by Chinese authorities on the condition it was to return to Australia.

Alkane Resources (ASX: ALK), who supplied the shipment of antimony from its Costerfield site in Victoria, said it would never again send an antimony shipment bound for the US via China even though there had been no problem with previous shipments, according to the Australian Industry & Defence Network (AIDN).

The incident comes as US Antimony, the only antimony smelter operator in the US, is looking to increase production and secure a $367.6m [US$240m] supply contract with the US Department of Defence.

Last December, China banned exports of antimony to the US in retaliation to US trade restrictions on China’s semiconductor industry.

Shadow Resources Minister Susan McDonald says this incident highlights the weakness of the Federal Government’s critical minerals agenda and raises concerns of Australia’s ability to guarantee supply to the US.

“The Coalition advocated strongly to strengthen our Critical Minerals Strategy to: support national and regional security and that of our allies and partners; provide clarity and certainty for strategic long-term investments; and safeguard the security of supply chains, including strategic supply chains,” she said.

“It is time for [the Federal Government] to explain why they cannot guarantee supply of our defence minerals to our partners, why they cannot secure a critical minerals deal with the US, and why the Prime Minister still cannot secure a meeting with [US] President Trump.”

Last week, The Federal Government, with South Australian and Tasmanian Governments, announced it would invest $57.5m as part of a $135m package aimed at supporting the transformation of Nyrstar’s Port Pirie and Hobart smelters into modern facilities capable of producing critical minerals, including antimony.

An immediate focus of the package is to deploy an Antimony Pilot Plant in Port Pirie, which if successful would make Port Pirie the only producer of antimony metal in Australia and one of the few producers globally.

Federal Minister for Industry and Innovation Tim Ayres comments on the package.

“If pilot studies are successful this would position Port Pirie as Australia’s only producer of antimony metal and one of the few globally, supporting sovereign capability in defence and advanced manufacturing,” he said.

“Sustainable and competitive smelting capabilities in Australia that can deliver critical minerals projects are part of the [Federal] Government’s Future Made in Australia agenda.”

Looking ahead, Prime Minister Anthony Albanese and US President Donald Trump are both expected to attend the UN General Assembly in New York, US. An official meeting had yet to be confirmed at the time of publication.

RISE focuses on renewables

Twenty Australian startups have been selected for the third round of the India Australia Rapid Innovation and Startup Expansion (RISE) Accelerator program.

Delivered by CSIRO, Australia’s national science agency, the RISE Accelerator helps Australian startups and small to medium enterprises (SMEs) with scalable climate and environmental solutions to test, validate and commercialise their technologies in international markets, with a focus on India.

The new round focuses on deployable renewable energy innovations targeting three key challenge areas:

• Advancing critical mineral and materials processing, recovery and reuse
• Improving designs, infrastructure or manufacturing for greater durability and performance
• Using software, hardware and digital systems to optimise renewable energy deployment

Selected participants will partake in a tailored mix of online learning, in-person workshops, one-on-one mentoring and market immersion visits.

RISE Accelerator program director James Robinson says startups and SMEs are often behind some of the most transformative ideas but don’t always have the capacity or networks to expand globally.

“Programs like RISE empower these companies to gain valuable local insights and forge in-country partnerships they may otherwise not have access to,” he said.

“This significantly boosts their potential for success and impact — both at home and abroad — by tapping into new innovation ecosystems, supply chains and opportunities to support increased scalability.”

One of the companies selected in this round, Rux Energy, is developing high-efficiency hydrogen storage using patented nanoporous materials.

Rux Energy chief of staff Tom Webb says the company sees India as both a key market and manufacturing partner.

“We applied to the RISE Accelerator to accelerate our mission of delivering safe, high-efficiency, and affordable hydrogen storage solutions to markets like India, where clean energy access can uplift communities and unlock new economic growth,” he said.

“India is a key strategic partner for Rux Energy and this program provides the ideal platform to build trusted and enduring local partnerships to drive global impact.”

Another of the selected companies is Syncrowin, whose AI-powered industrial autopilot platform enables continuous monitoring and optimisation of operations across heavy industries such as energy, mining and manufacturing.

Syncrowin co-founder and chief executive Aishwarya Kansakar says the RISE Accelerator will support the company’s efforts to scale its platform across India and Australia’s renewable and integrated energy sectors.

“Our goal is to build scalable AI that integrates effortlessly with existing infrastructure to support decarbonisation and digital transformation,” he said.

Over the next four months, participating companies will engage in a range of cross-border activities, including travel to India, with each company receiving a grant of $35,000.

After this period, companies ready to run pilot projects will receive an additional $100,000 in funding to launch their projects.