Critical Minerals Strategic Reserve: Australia’s move to independence

The Australian Government has pledged an initial investment of $1.2b to create a strategic reserve of critical minerals for Australia.

The move follows China placing export restrictions on several critical minerals in response to the US imposed tariffs on Chinese goods.

China currently dominates the global critical mineral supply chain being the top producer of 30 of the 50 minerals considered critical.

Australia has major deposits of various critical minerals and rare earths, however, almost the entirety of the processing of critical minerals is sourced internationally to China.

Caught in the middle of a trade war between the two countries, Australia looks to create its own supply chain independent from China.

Australian Prime Minister Anthony Albanese said that Australia needs to do more with its natural resources.

“In a time of global uncertainty, Australia will be stronger and safer by developing our critical national assets to create economic opportunity and resilience,” said Prime Minister Albanese.

“The strategic reserve will mean the government has the power to purchase, own and sell critical minerals found here in Australia.

“It will mean we can deal with trade and market disruptions from a position of strength

“Because Australia will be able to call on an internationally significant quantity of resources in global demand.”

Australia has a natural abundance of a variety of critical minerals and is already supplying directly to international markets.

The Minerals Council of Australia (MCA) is speculative of whether a strategic reserve, as proposed by the Federal Government, is the best approach for Australia and has requested a clear plan on critical mineral exploration and expansion.

The MCA acknowledged that a reserve may increase Australia’s chances of minimising the impact of US tariffs but are concerned that the initiative is not without domestic risk.

MCA’s chief executive Tania Constable said that the objective and merits of the initiative remain unclear and must be evaluated against other opportunities to leverage Australia’s mining industry.

“We must focus on the fundamentals that will give Australia back the edge over other mining nations,” she said.

“That means lower energy prices, a wind back of draconian industrial relations laws and faster environmental approval times.

“These changes would make it easier for companies to invest in Australia, without the need for taxpayer-funded incentives and government intervention in markets.”

The global mining and processing supply chain is under undeniable pressure as China continues to aggressively expand its capacity for critical mineral processing and dominate the value chain.

“Australia’s real advantage lies in securing end-to-end supply chains, building strategic partnerships with like-minded countries and connecting Australian mines to international manufacturers,” said Ms Constable.

“That means co-investing with trusted allies to build technical capability at every stage: from raw materials and concentrates to oxides, metals and final products.

“Security of supply is essential, but it’s required at the end of the supply chain, not just at the beginning.”