Australia Continues To Deepen Its Development of Critical Minerals

Information Source: Changjiang Nonferrous Metals Network

　　In recent years, with the transition to clean energy and the booming development of high-tech industries, global demand for critical minerals has been increasing day by day. Since 2023, Australia has been striving to become an important part of the global critical minerals supply chain through a dual domestic and international approach advancing in parallel.

　　Policies Intensify Critical Minerals Development

　　In February this year, the Australian Parliament passed the "Australia Future Manufacturing Act 225," providing a 10% tax credit for processing and refining activities of 31 critical minerals (such as lithium, cobalt, nickel, rare earths, etc.). The tax credit applies from 2028 to 2040, with a maximum benefit of 10 years per project; the total budget is AUD 13.7 billion, of which AUD 7 billion is specifically allocated for critical minerals processing. This move precisely supports downstream processing, strengthening the domestic industrial chain. By limiting the 10% tax credit to direct expenses related to processing and refining (such as labor, equipment, energy), it ensures public funds flow to high value-added processing activities rather than upstream mining or transportation. The policy covers both existing and new facilities and requires projects to make investment decisions or start production before 2030 to accelerate capacity deployment, promoting Australia's transformation from a "mineral exporter" to a "processing powerhouse." Currently, processing of the 31 minerals on the critical minerals list is considered eligible, and any newly added minerals "will not automatically qualify" for incentives. This regulation maintains policy stability while avoiding budget overspending risks.

　　In April this year, Australian Prime Minister Albanese announced the establishment of a national critical minerals reserve. The specific list of reserved minerals has not been disclosed but clearly covers strategic resources such as rare earths, graphite, and cobalt. This move aims to ensure the security of the country's mineral supply chain.

　　In May this year, Australia announced an additional USD 2 billion expansion of the critical minerals fund, bringing the fund size to USD 4.6 billion (the original fund had accumulated AUD 2.6 billion). The funds are used to support domestic mineral mining and processing projects and strengthen critical minerals supply chain cooperation with the United States. The goal is to leverage the "Australia-US Critical Minerals Working Group" to promote mineral supply for clean energy and defense industries.

　　Strengthening International Cooperation

　　To Broaden Critical Minerals Export Channels

　　In May 2024, Australia and the European Union signed a Memorandum of Understanding to enhance cooperation and investment in the critical minerals sector, reducing dependence on foreign critical raw materials. In the future, both parties will strengthen cooperation in critical minerals projects, including establishing joint ventures, conducting scientific research, and technological innovation. Additionally, the cooperation will focus on three main areas: first, conducting scientific research and technological innovation along the critical minerals value chain, including advancing exploration, development, and comprehensive utilization of critical minerals, and continuously improving processing, refining, and recycling technologies. Second, exploring cooperation in third countries of mutual interest to the EU and Australia while minimizing environmental impact. Third, promoting innovation and digital services in mining and other projects to continuously extend the critical minerals value chain. The signing of this memorandum will help ensure a stable supply of raw materials needed for the EU's green and digital transition, while promoting the upgrading of Australia's mineral processing industry and enhancing resource added value.

　　In September 2024, Indonesia and Australia held talks to strengthen cooperation in critical minerals and power battery production. Indonesia hopes to transform the competitive relationship between the two countries in the nickel industry into cooperation, proposing to jointly develop mineral processing standards to avoid conflicts caused by the expansion of Indonesia's nickel industry leading to the closure of Australian nickel mines. As the world's largest nickel producer (accounting for about 50% of global supply), Indonesia has committed to opening nickel resource cooperation with Australia to support battery material production. Australia, as the world's largest lithium producer and third largest cobalt producer, agreed to export lithium, cobalt, and other core battery raw materials to Indonesia to compensate for Indonesia's upstream battery resource shortcomings. Both sides plan to establish a joint working group to study the feasibility of jointly building a "battery material processing chain." The two countries also agreed to explore joint development projects in mineral-rich regions such as Africa and South America and committed to prioritizing low-carbon technologies in cooperation to reduce environmental impact. This meeting marks a shift from resource competition to strategic complementarity between the two countries, integrating nickel, lithium, and cobalt resources to jointly build a battery processing chain and expand third-party markets, aiming to create an independent battery supply chain. In the short term, cooperation can enhance both countries' positions in the global green industry; in the long term, it may reshape the critical minerals landscape in the Asia-Pacific region. Although issues such as unifying environmental standards and technology integration remain, this meeting is an important step forward in cooperation between the two countries in the critical minerals field.

　　In May this year, Australian Prime Minister Albanese visited Indonesia and reached an agreement with Indonesian President Prabowo on critical minerals cooperation. The cooperation includes three aspects: first, combining Australia's lithium resource advantages with Indonesia's nickel processing capabilities to explore division of labor and collaboration in battery material (such as nickel and lithium) production and recycling technologies. Second, continuing the cooperation mechanism established in 2023, with additional funding to support electric vehicle battery recycling and decarbonization technology research and development. Third, signing a regional mineral processing agreement with Indonesia. For Australia, leveraging Indonesia's nickel processing experience to compensate for Australia's downstream industry shortcomings is beneficial for capturing the Asia-Pacific battery market. The meeting and agreement between the two top leaders mark a new height in cooperation in the critical minerals field.

　　Significant Achievements in Developing the Critical Minerals Industry

　　Australia's vast territory provides an inherent advantage for developing the critical minerals industry chain and supply chain. First, abundant mineral resources. Australia has a complete range of critical mineral types, rich reserves, and excellent mineral resource endowment, ranking among the top globally. Second, a favorable business environment. Australia has a sound legal system, complete infrastructure, a mature mining capital market, and great potential for mining development, making it highly attractive to global investment capital. Third, strong government emphasis. In recent years, successive Australian governments have regarded the critical minerals industry as a pillar industry and attached great importance to it, successively introducing a complete set of critical minerals development strategies and related measures, continuously updating, adjusting, and enriching their content according to changing circumstances, and supporting all aspects of mining operations. Externally, Australia has extensively cooperated with many developed and developing countries in the mining sector, with both breadth and depth, diverse forms, and rich content.

　　Due to government policy support, effective implementation of related measures, and sustained efforts, Australia's critical minerals industry capacity has expanded and the market has been broadened, reflected in three aspects: First, the output and global status of core minerals have improved. In 2024, Australia's lithium production accounted for 36% of the global total, with exports reaching AUD 5.2 billion, a 6% increase compared to 2023. Lithium resource reserves and processing capacity have improved simultaneously, with domestic refining output growing at an average annual rate of 43%, and export value expected to increase to AUD 8.2 billion by 2030; copper resource reserves rank second globally at 211 million tons, and in 2024, refined copper exports reached 870,000 tons, ranking fifth worldwide; the rare earth industry is led by Lynas Corporation, with a market value of AUD 7.26 billion, holding an important share in the global supply chain. Second, exploration investment continues to grow. In 2024, lithium exploration investment reached USD 298 million, accounting for 27% of global total investment, supporting resource reserve expansion. Third, corporate competitiveness and market value have increased. The total market value of the critical minerals industry rose from AUD 8.67 billion in 2014 to AUD 86.21 billion in 2024, an increase of 895% over ten years. Leading companies such as Pilbara Minerals (market value AUD 14.15 billion) and Mineral Resources (market value AUD 13.43 billion) have become industry leaders through diversified strategies.

　　In summary, Australia has gradually formed and consolidated its core position in the global critical minerals supply chain through resource development, policy incentives, and market demand driving.