Australia’s uncertain critical minerals future

With more than 900 critical minerals projects in the national pipeline, Australia has the preconditions to capitalise on an unprecedented opportunity.  

Yet only 13 of those projects are within striking distance of a final investment decision (FID) in the next two to four years, according to a PwC report.  

The report, Securing Australia’s Critical Minerals Future, found that of 907 projects nationwide, 117 fall within what PwC calls the “investable universe” and just 13 have reached definitive feasibility study (DFS) stage, the last stage before a final investment decision (FID) can be made. 

The report notes only six projects have reached the milestone since 2022. 

PwC Australia energy, utilities and resources partner Lachy Haynes says the report’s findings expose a widening gap between Australia’s mineral wealth and its ability to deliver. 

“Australia has the preconditions for critical minerals success,” he said.  

“But having the minerals in the ground is not enough. The gap between the scale of our mineral endowment and production levels is getting harder to ignore. 

“Allies are placing a premium on speed to production. Australia is still a partner of choice, but that only holds if we can bring projects to market faster.” 

The report found that 74% of Australia’s critical mineral project pipeline remains in exploration or reserve development stages and that only six projects reached FID between 2022 and mid-2026, after a near four-year gap with no FIDs at all. 

“It is no longer enough to say Australia has a first-class natural endowment of critical minerals,” Mr Haynes said. 

“Our relative abundance is proving challenging to convert, and projects are not progressing through the pipeline quickly enough.” 

As value networks reset, competing jurisdictions scramble to industrialise their critical minerals value chains and allies prioritise security of supply, the ground is shifting beneath Australia’s critical minerals sector. 

“Above all, time is critical,” Mr Haynes said. 

“The world wants what we have but it isn’t going to wait for us to catch up.” 

The new PwC analysis finds that, from a total of 907 critical minerals projects nationwide, Australia’s investable universe is 117 projects — meaning only about one in ten of Australia’s critical minerals projects are ready for investment. 

Dig deeper and only 11%, or 13 projects, are at definitive feasibility study (DFS) stage.  

“These 13 projects could be two to four years away from reaching FID, depending on the extent of post-DFS/pre-FID activities,” Mr Haynes said. 

The extent of the time lag is clear when you consider nearly 90% of projects in Australia’s investable universe are three to six years from reaching FID, and up to ten years in the case of more complex projects — 53% at pre-feasibility study stage, 36% at scoping study stage.  

While allies and competitors are moving with urgency and intent, the development of Australia’s critical minerals pipeline is not keeping pace. 

“The Prime Minister has been unequivocal on this point: the world wants what Australia has, but it will not wait around for us,” Mr Haynes said. 

“Government support for the industry is to be commended.  

“Since 2022, Australia has committed $28b to the critical minerals and rare earths sector, spanning the Critical Minerals Strategic Reserve, the Critical Minerals Production Tax Incentive and the Critical Minerals Facility.  

“Yet input logic does not get projects developed.” 

A significant disconnect remains between policy announcements and actual investment decisions being made by project proponents. Energy costs, permitting timelines, workforce constraints, commodity price volatility and the gap between government incentives and project economics all contribute to this disconnect. 

While significant, the $28b commitment is largely prospective, conditional or structured as tax incentives that only deliver value once projects are producing. Support doesn’t stretch to many of the projects in the investable universe that are yet to reach FID. 

“Australia cannot afford to let the geopolitical window slam shut before it has established itself as a key player in a range of critical mineral value chains,” Mr Haynes said. 

Critical agendas need critical minerals 

Critical minerals sit at the centre of four converging global agendas: electrification, productivity, growth and security. 

The pursuit of these agendas should benefit Australia, but disruption to value networks is forcing a recalibration and speed to production has become an important performance metric.  

“Australia’s development of its critical minerals industry must keep pace with the expectations of its allies,” Mr Haynes said. 

“The old orthodoxy prized global efficiency and low costs; national security and prosperity are now the priority. 

“Concentration risk is top of the agenda. Security premiums are the new green premiums.” 

Partner of choice — for now 

For many nations, Australia is considered a safe haven and consequently the resources partner of choice. The country’s endowment of several critical minerals, long history as a reliable supplier and relatively low sovereign risk set it apart for many allies.  

However, critical minerals deposits are more widely dispersed than bulk commodities, affording allies a broader range of upstream supply options. 

Australia cannot afford to see allies become supply-agnostic and prioritise the timely production and supply of minerals over sovereign risk considerations. 

“In our experience, it’s not unusual for companies or countries to be seeking supply within three to five years (or less) of executing an offtake agreement,” Mr Haynes said. 

“Projects need to be relatively well advanced to meet this timeline.” 

When it comes to the midstream and downstream, several nations are seeking to mitigate concentration risk in their value chains and secure onshore processing to retain sovereign capability and advance those four critical agendas. This poses a challenge to Australia’s own aspiration to add value to its minerals.  

“Across the PwC Global Network, we’ve seen an increase in the number of jurisdictions seeking to industrialise endowments of critical and strategic minerals,” Mr Haynes said.  

“It is becoming a crowded trade.” 

From the pool of 907 projects, PwC found that 675 projects are classified as exploration or reserves development. At the other end of the mining lifecycle, 87 projects are in production and a further 20 projects are under construction. There are eight processing facility projects representing 1% of the total project pool. The 117 projects in the investable universe represent just 13% of the total. 

Between 2022 and June 2026, Australia had six upstream projects formally reach FID – four lithium projects, one rare earths project and one base and technology metals project. 

The first of the six projects reached FID in June 2022, followed by a near four-year gap before the remaining five declared FID between March and June 2026. 

One of the six received more than $1b in Federal Government funding and another project was a restart after an operational pause; another was an approval for a major underground expansion rather than a new project. 

A narrow commodity mix 

The investable universe is also narrow in its commodity mix with more than half the universe comprising copper, nickel and rare earth elements. In total, the investable universe has projects covering 18 of the 36 minerals on the critical minerals list as their primary commodity. Several other minerals on the critical minerals list appear only as secondary or tertiary minerals that are not captured by the investable universe analysis. 

According to PwC, copper and nickel have dominated the investable universe since it was first developed in 2024, though the relative percentages have declined marginally over the past two years. 

A further 31% of the investable universe cover vanadium, tin, graphite, lithium, zinc and cobalt, while the remaining 15% covers an additional nine minerals on the critical minerals list, including phosphate, alumina, titanium and tungsten. 

The need for (production) speed 

Allied nations are actively seeking to secure critical minerals and onshore mid- and downstream processing.  

Projects in the investable universe are heavily weighted towards earlier phases of the post-exploration mining lifecycle with 36% at scoping study stage, 53% at pre-feasibility study (PFS) stage and only 11% (13 projects) at DFS stage. 

“Australia must increase the rate at which projects move through the mining lifecycle,” Mr Haynes said. 

 “At this rate, Australia will not meet the immediate needs of allied nations that are putting a premium on speed to production.  

“Nor will Australia achieve its aspiration to develop mid- and downstream facilities.” 

From pipeline to production 

A plan for Australia’s critical minerals sector 

Based on the Securing Australia’s Critical Minerals Future analysis, Australia is not progressing the development of its critical minerals projects fast enough, at precisely the time allies are prioritising security of supply. 

The report says Australia must find ways to fast-track those critical minerals projects with a better value proposition or miss global opportunities. PwC proposes a four-point plan to do exactly that.  

“This plan is technically feasible,” Mr Haynes said.  

“What’s unknown is whether Australia has the political will to commit to the necessary actions, deploy funding at the required scale, act within allies’ timeframes and accept a longer-term horizon for returns that exceeds the political cycle. 

“It’s Australia’s move.” 

1) Fast track the right projects 

PwC says Australia must aspire to more than enabling private investment at the margins and government approaches to industry development efforts and funding, sovereign Memorandums of Understanding (MoUs) with trading partners and ongoing regulatory streamlining must be recalibrated and scaled to the problem. 

A two-track system to distinguish contested from uncontested projects 

There have been several regulatory streamlining efforts by both the federal and state governments over time – with mixed success. Despite these reform efforts, there is no evidence that they have shortened the timeframe from mineral discovery to project FID. 

“Fast-moving projects tend to share characteristics unrelated to regulatory reform,” Mr Haynes said.  

“They are in the right mining ‘postcodes’, with resolved native title, limited biodiversity value and no land use conflicts.  

“Most have strong links to the local community or have experienced proponents and access to funding. 

“Contested projects tend to involve genuine conflicts.”  

For these projects, streamlining is not going to be a sudden cure-all.  

“No amount of process streamlining will address underlying conflicts at a project level,” Mr Haynes said. 

“Both contested and uncontested projects deserve regulatory scrutiny so we fast-track projects where we can and apply appropriate caution and conditions where we can’t.” 

PwC says the industry would benefit from a system that distinguishes between contested and uncontested projects, enabling the latter to move through the approval process much faster. This two-track approach would accelerate straightforward projects while freeing up resources for the more complex ones. 

Upfront strategic decisions about land use

PwC says upfront decisions about land use are needed, even if they come at the political cost of closing off future optionality.  

“Australia must acknowledge that some deposits will never be developed,” Mr Haynes said.  

“This would relieve pressure on regulatory agencies and provide greater certainty about the likelihood of projects proceeding prior to the commitment of significant time, resources and capital.” 

Of the more than 900 projects in the pipeline, some will have few or no contested attributes and PwC says these are the candidates for a fast-track system that can deliver greater velocity to FID safely and with social approval. 

2) Think precincts, not projects 

Critical minerals projects can often appear sub-scale or marginal through a bulk commodities lens and it remains a challenge to find investors willing to allocate capital to such projects. 

PwC says a bespoke model is required to attract capital to new project types of a different scale and complexity. A shared economic platform incorporating multiple projects and common user infrastructure within a precinct could improve economics and de-risk capital and operations. Importantly, it would also create optionality that needs to be identified and quantified to avoid being underestimated by conventional measures of value. It would also help to close the structural funding gap experienced by junior mining companies that — without a balance sheet — are reliant on external capital. 

“This is a model that has worked successfully in other sectors, including oil and gas, and has been pursued in efforts to commercialise green hydrogen and carbon capture, utilisation and storage,” Mr Haynes said.  

“Now, it’s time to pursue precinct-based aggregation in critical minerals and unlock opportunities that no project could achieve alone.” 

Develop mining precincts with shared infrastructure 

Given the relatively small scale of critical minerals projects, developing a precinct with shared infrastructure creates real value. There are coordination costs, and some processing must remain bespoke, but shared infrastructure could create economies of scale across three addressable categories. 

This includes genuinely common infrastructure, such as electricity generation and storage, water supply, logistics, fuel and general waste management; potentially shareable infrastructure, including water treatment and recycling, acid supply, tailings storage and environmental monitoring; and co-located infrastructure, including bespoke processing plants that benefit from common services. 

To pursue precinct-style development, PwC says three things must be addressed. 

Commercial preferences of individual companies: these can include the desire to retain control over processing, capture the full margin across an integrated value chain, protect IP, and retain autonomy over development timeframes. 

Incentives for precinct participants: government investment in genuinely common elements, or the creation of ‘investable product’ for sovereign and superannuation funds, can reduce the capital intensity of developments in exchange for higher operating costs via infrastructure charges. 

A clear cost-benefit proposition: the economic benefits of a precinct must outweigh the coordination costs. These benefits include lower energy costs, amortisation of infrastructure costs across several users, workforce pooling, service clustering and avoidance of duplication. 

Energy sharing could kick-start precinct design 

According to PwC, energy sharing is the lowest-risk, least-contested element of a precinct model and an ideal starting point, especially where mid- and downstream processing are part of the precinct master plan and investment logic.  

A government-underwritten clean energy Power Purchase Agreement (PPA) for a critical minerals precinct is a more rational use of public funds than propping up ageing industrial facilities, unless the funds are part of the cost of facility transformation and adaptation, according to PwC.  

“A new industry would emerge capable of generating value-added export earnings, creating new jobs and directing investment to the regions, with the benefits spread across several companies rather than subsidising any single one,” Mr Haynes said. 

Such a model would require multiple parties operating in a defined area, electricity demand aggregated into a single PPA or suite of PPAs, construction of renewable energy and firming assets to serve the precinct and a Federal Government-underwritten PPA, preventing market failure caused by junior miners that are unable to sign bankable PPAs and unlocking further mining investment. 

PwC says under this model, demand certainty unlocks low-risk investment in energy supply projects by developers. Miners secure long-term energy at a competitive price and government gets security of minerals supply and decarbonised mining and processing operations. 

“To influence the rate at which critical minerals projects reach FID, competitively priced, firm and contracted power is required within a three-to-four-year window,” Mr Haynes said. 

“The precinct energy model would need government adoption and quick decision-making to initiate renewable energy generation and energy storage projects in suitable locations.” 

Immediate steps include identifying suitable precinct targets, quantifying demand, assessing renewable resources and infrastructure gaps, designing the financial mechanism and establishing the policy and legislative framework. 

Energy could form the first step to further shared utility investment, such as desalination, and commitments to the allocation of treated wastewater to a precinct in favour of discharge. 

3) Transform the investment proposition for sovereign and superannuation capital 

PwC says that from a critical minerals perspective, Australia faces several investment conundrums.  

Taxpayer-underwritten support has largely targeted post-production stages of the mining lifecycle, rather than pre-production project development.  

Evaluating sub-scale development options through conventional investment appraisal logic is unhelpful for private sector capital allocation. 

More than $3.5t in superannuation capital is seeking stable, long-duration, inflation-linked returns. 

Critical minerals projects need patient capital but are struggling to attract it. 

“A structural credit gap exists — the companies developing critical minerals are mostly sub-investment-grade juniors,” Mr Haynes said. 

“A creditworthy intermediary could transform volatile commodity exposure into something that looks like infrastructure to sovereign and superannuation (or pension) funds and other pools of institutional and industry capital. It could also aggregate what would otherwise be fragmented supply and send an important demand signal to the industry. 

“A strategic reserve (or other form of offtake organisation), appropriately structured, could be that intermediary — and the key structural innovation to transform the critical minerals investment proposition.” 

PwC says the following features would inject the confidence to secure the passage of more projects to FID, more quickly: 

• Revenue support to moderate volatility 

• Entry of a AAA-rated credit to improve bankability 

• Contracted revenue over a term of ten to 20 years 

• An appropriately designed price mechanism to balance risk allocation, address the fiscal cost to government and incentivise sovereign and superannuation investment 

• Anchored to a mining precinct development rather than standalone projects, to enhance diversification, scale and liquidity with investment via a Precinct Special Purpose Vehicle (SPV) 

“The reserve itself could be underwritten by back-to-back contracts with allied nations and/or large, creditworthy end-users, or have allied nations participate directly in the reserve,” Mr Haynes said.  

“The objective must be to move beyond MoUs and secure binding purchase commitments.” 

The strategic reserve would not eliminate risk, but it could transform commodity and credit risk into a structured, government-backed infrastructure-like risk. This could provide a blended return profile that is both infrastructure-like, through regulated and contracted charges for precinct infrastructure, and commodity-linked, through equity participation in mine operators, with revenues underwritten by the strategic reserve to provide downside protection. 

4) Transforming ageing industrial facilities 

PwC’s analysis of the investable universe, and the levers of velocity and value, is focused on the upstream. However, it is vital that downstream primary and secondary processing opportunities are captured to boost upstream option values, to maintain Australia’s position as a critical minerals partner of choice and secure added value for Australians. 

For most minerals, the route to consumers is via shipping to offshore processing. But there are emerging opportunities for primary and secondary processing to add value in Australia. 

Australia has the prospect of upgrading its bulk and base metals refining and smelting operations where they could support critical minerals processing. Given the brownfield nature of these sites, expansion could be achieved without the delays typical of greenfield development. The opportunity to create new employment, rather than merely preserve existing jobs, is also significant. 

It’s time to explore a downstream critical minerals processing precinct model built on the adaptation of existing bulk and base commodity processing facilities. PwC has identified about 15 such facilities, of which several are currently receiving government financial support to retain short-term optionality. 

The transformation of such sites would limit the possibility that mineral potential is constrained, improve the underlying investment logic and operability needs for critical minerals projects and underpin a longer-term strategy focused on securing the viability of critical minerals processing, according to PwC. 

PwC also says such transformation would be an important step in increasing the speed to production, creating the supply-chain diversification sought by allies and attracting established offshore processors with the right incentives to access metallurgical expertise and build processing capacity in Australia more quickly. 

“Australia has the endowment, the allies and the opportunity,” Mr Haynes said.  

“But it requires a systemic approach to the development of critical mineral value chains.” 

This will require the convening power of government, the financial resources and ingenuity of the private sector, and the demand signal and support from sovereign actors.  

“Accelerating the pace of industry development will take sustained, coordinated effort,” Mr Haynes said. 

“Australia needs to work out which projects can genuinely move fast and back them.  

“This isn’t a problem anyone can solve alone. 

“PwC will keep working with industry to identify projects that can move faster, those that could benefit from aggregation via a precinct approach, and the changes needed to make this happen.” 

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