Australia Critical Minerals & Strategic Materials

Overview of Australia's Critical Minerals Strategy

Australia's approach to critical minerals is shaped by its unique position as both a major producer of raw materials and an ally of nations that are net importers of those same materials. Unlike the United States or European Union, which are primarily concerned with securing access to minerals they lack, Australia's critical minerals strategy focuses on leveraging its abundant geological endowment to build downstream processing capacity, attract investment, and strengthen partnerships with key allies including the United States, Japan, South Korea, India, and the European Union.

The Australian Government published its first Critical Minerals Strategy in 2019, updated it in 2022, and released a comprehensive revision in 2023. The 2023 strategy, titled "Critical Minerals Strategy 2023-2030," established a clear policy framework organized around four pillars: building resilient supply chains, supporting innovation and downstream processing, promoting responsible mining and environmental stewardship, and strengthening international partnerships. The strategy is backed by significant federal funding, including the $4 billion Critical Minerals Facility administered by Export Finance Australia and the $2 billion National Reconstruction Fund, which includes critical minerals processing as a priority investment area.

Australia maintains two distinct designations: critical minerals and strategic materials. The critical minerals list identifies 31 minerals and elements considered essential to modern technologies and vulnerable to supply disruption at the global level. The strategic materials list is a narrower subset of 6 materials designated as having particular importance to Australia's national interest, reflecting both domestic processing opportunities and the specific needs of Australia's bilateral mineral security partnerships.

A distinguishing feature of Australia's approach is its emphasis on becoming a major processor and value-adder, not merely an exporter of raw ores. Australia is already the world's largest producer of lithium (in spodumene concentrate form), but the vast majority of that material is shipped to China for conversion into lithium hydroxide and lithium carbonate. The strategy aims to shift this pattern by supporting the development of domestic processing facilities, such as the lithium hydroxide refineries being built in Western Australia and the rare earth separation plants under development in multiple states.

Australia's critical minerals policy is also closely integrated with its foreign policy and security partnerships. The Quad Critical Minerals Partnership with the United States, Japan, and India focuses on mapping supply chains, co-investing in processing capacity, and establishing common standards for responsible sourcing. Bilateral agreements with the United States, including the Australia-U.S. Climate, Critical Minerals, and Clean Energy Transformation Compact, provide Australian critical mineral projects with access to U.S. tax incentives under the Inflation Reduction Act. These partnerships position Australia as a preferred supplier to allied nations seeking to reduce dependence on China.