No quick fix for Australia’s energy crisis

Australia prioritises military minerals in strategic reserve New details of the $1.2b Critical Minerals Strategic Reserve (CMSR) are emerging with the Federal Government confirming antimony, gallium and rare earth elements as early priorities. The announcement comes as Treasurer Jim Chalmers is scheduled to join a G7 meeting focused on critical minerals in Washington DC this Friday. In recent years, China’s dominance in the critical minerals sector has been a focal point of ongoing geopolitical tensions — particularly affecting G7 countries including the US and Japan.  With the development of the CMSR, the Federal Government is looking to leverage its abundant critical mineral reserves to diversify supply chains and shift China’s dominance. “The world needs critical minerals — Australia has plenty of them and our critical minerals reserve will help us weather global economic uncertainty and help to boost trade and investment,” Treasurer Chalmers said. "Ensuring we have a reliable reserve of these critical resources will strengthen supply chains and help to stabilise critical minerals markets.” The CMSR will secure rights to minerals produced in Australia and on-selling those rights to meet demand, giving an added boost to the critical minerals sector and strengthening reliable supply chains for trading partners Larvotto Resources (ASX: LRV), the developer of Australia’s largest antimony deposit, has voiced its support of the Federal Government’s plan. Larvotto managing director Ron Heeks says the Federal Government’s prioritisation of antimony validates the strategic importance of the company’s Hillgrove project in NSW. “Australia benefits from having a rich supply of critical minerals with the resources and expertise to produce these minerals responsibly,” he said.  “The strategic reserve supports the strong investment into the Hillgrove project and reinforces the importance of progressing final approvals efficiently as we move towards production in mid-2026.” Despite the urgency for diversification, Federal Resources Minister Madeleine King says Australia faces a long road to revenue with government seeking support for the industry which faces weak pricing and high startup capital.  “ the investment the Government is making in supporting the industry itself will be job-creating, both in the extraction side of the sector, but also in advanced processing and advanced manufacturing into the future,” she said. "There’ll be many upsides,  it won’t be revenue upside in the immediate term.  “ the outcome is yet to be determined, what we would hope for and have always advocated for is greater cooperation and collaboration with our international partners.” With a similar reliance on antimony, gallium and rare earths, the US has emerged as a major investor in the development of Australia’s critical minerals sector following the signing of a $13b critical minerals agreement between the countries in October last year. Minister King says that Australia as a nation is always dependent on international investments to build its industries and, despite the US’ recent interest in pursuing deposits in Greenland, Australia remains the superior choice for US investment. “Australia is recognised around the world as a globally important initiative into mineral exploration,” she said. “In the immediate, short to medium term, Australia is a much more desirable location  for extracting and processing minerals.”  

Long gone are the days of sub dollar prices at the bowser.The global oil market is experiencing unprecedented turmoil as the war in the Middle East creates the largest supply disruption in the history of the global oil market, according to the International Energy Agency (IEA).The crisis has led to a near halt in tanker movements through the Strait of Hormuz, a critical oil transit chokepoint between Oman and Iran. As crude and oil product flows plunge from about 20mb/d before the war to a trickle at present, Gulf countries have cut total oil production by at least 10mb/d, according to IEA data.With limited options to bypass the chokepoint, the strain is being felt by producers and consumers worldwide.Benchmark crude oil prices have surged about 40% since the start of the conflict, according to Trading Economics.Damage to Gulf state energy infrastructure is also having a major effect on prices.On March 19, Israel targeted Iranian facilities linked to South Pars, the world’s largest natural gas field.In response, Iran struck a major LNG site in Qatar, causing crude prices to surge 8% overnight with prices nearly hitting US$120 a barrel.In the absence of a rapid resumption of shipping flows and unrestricted refining capacity, the IEA anticipates increasing supply losses.CommBank commodities and sustainable economics head Vivek Dhar says while rising crude prices have captured global attention, refined fuel is the bigger concern for economies.“The product everyone is worried about is diesel, and for good reason,” Mr Dhar said.Diesel is used extensively in trucking, farming and mining in Australia.“The concern is that we roughly have 30 days of stockpiles,” Mr Dhar said.As petrol and diesel prices skyrocket, governments globally are scrambling to stave off panic buying and price gouging as they address fuel shortages.According to the Australian Consumer and Competition Commission (ACCC), petrol and diesel prices varied significantly across Australia but, on average, have increased by about 50 cents since the beginning of March.Yesterday, Prime Minister Anthony Albanese convened a meeting of the national cabinet and established a national fuel supply taskforce to lead the country’s response to the ongoing crisis.“I want to assure Australians at this time that Australia is well prepared… I want us to be overprepared,” Prime Minister Albanese said.Leaders agreed that while Australia is well prepared, the longer the conflict in the Middle East goes on, the more significant the impact will be for global supply chains, fuel prices and the wider economy.The Federal Government has appointed former Australian Energy Regulator chief executive Anthea Harris as the taskforce coordinator to drive collaboration across governments and sectors.As part of Ms Harris’ role, she will provide regular updates on fuel supply outlook and distribution.The Federal Government confirmed there are some shortages in specific areas due to panic buying.“There is not less fuel in Australia today than there was three weeks ago,” prime Minister Albanese said.“There is not less supply. This is an issue… of increased demand.”Since the conflict commenced two weeks ago the Federal Government has released up to 20% of its diesel and fuel reserves to help address regional shortages and temporarily amended national fuel standards to keep more Australian-made fuels onshore.IEA member countries have also agreed to release an unprecedented 400m barrels of oil from their emergency reserves to the market to mitigate the negative impact on economies from the supply disruptions.Though the emergency stock release provides a welcomed buffer for the global energy market, it remains a stop-gap measure if the conflict in the Middle East is not resolved.

Alcoa (ASX: AAI) will further modernise approvals frameworks for its WA mining activities as the Federal Government reforms its Environment Protection and Biodiversity Conservation (EPBC) Act.Alcoa will undertake a strategic assessment of current and potential future mining areas through to 2045, to provide a holistic view of potential impacts to significant flora and fauna over a broad geographic area and provide stakeholders with greater clarity around the long-term future of mining operations.Operations at the Huntly and Willowdale bauxite mines, both located in WA, will continue while the assessment takes place under a national interest exemption (NIE) granted by the Federal Government.The assessment does not impact the ongoing accredited environmental assessment of the future Myara North and Holyoake mine regions of the Huntly mine under both WA and Federal Government environmental legislation.Alcoa will continue to limit annual clearing to 800ha, increase annual rates of new rehabilitation to 1000ha by 2027 and deliver environmental offsets in accordance with the EPBC Act.Late last year, the Federal Government passed the Environment Protection Reform Bill 2025 to streamline decision making and overhaul existing environmental policy.While Alcoa maintains it has operated in accordance with the EPBC Act as it currently stands, it has agreed to pay $55m (US$36) through enforceable undertakings that acknowledge historical clearing. The funding supports the health of the Northern Jarrah Forest, including programs and research that improve habitat for threatened species and control invasive flora and fauna.Alcoa president and chief executive William F Oplinger says Alcoa appreciates the Federal Government’s recognition of the important contributions of its operations to the Australian economy.“We are committed to responsible operations and welcome this important step in transitioning our approvals to a contemporary assessment process that provides increased certainty for our operations and our people into the future,” he said.“We’re proud of our more than 60 years as a leading Australian aluminium producer and the role we are now playing in support of critical minerals production.”Ministerial decisions are expected by the end of 2026 and Alcoa anticipates that mining in these new major regions will commence no earlier than 2029.The Minerals Council of Australia (MCA) has called for rapid finalisation of workable national environmental standards and bilateral assessment and approval accreditation agreements.According to the MCA, finalisation of national environmental standards, accreditation of all states for both assessments and approvals would be a major step forward for Australian mining companies.MCA chief executive Tania Constable says Alcoa’s decision is a strong example of government working together with industry to arrive at an outcome that is pragmatic and economically sensible while still being focused on improving environmental performance.“This outcome will allow Alcoa to undergo a more rigorous method of assessment while guaranteeing operations and thousands of jobs in the local WA community,” she said.“The recent changes to Australia’s environmental laws will have a significant impact on our sector, and many are still working to understand the impact on their operations.“Faster approvals for mines mean we can deliver the critical minerals and other commodities the world needs quicker, responsibly and more efficiently.”

Yesterday, Australia’s Liberal Party abandoned its policy to achieve net zero — claiming emissions goals are driving up energy prices.