Australia's Strategic Materials List

The Strategic Materials Designation

Within Australia's critical minerals framework, the strategic materials designation identifies a subset of minerals where Australia has both significant production potential and strong alignment with the supply chain security priorities of allied nations. The designation is based on a combination of factors: Australia's geological endowment and existing production capacity for the material, the severity of global supply chain concentration (particularly dependency on China), the material's importance to the energy transition and defense applications, and the demand expressed by partner nations through bilateral agreements and multilateral forums.

Strategic materials receive the highest level of policy support from the Australian Government. Projects targeting strategic materials are given priority consideration for concessional financing through the Critical Minerals Facility, receive fast-tracked assessment under the Major Projects Facilitation Agency, and are the primary focus of bilateral partnership agreements with the United States, Japan, South Korea, India, and the European Union. The designation sends a clear signal to global investors that these materials represent the Australian Government's top development priorities.

The Six Strategic Materials

Material	Australia's Role	Strategic Rationale
Lithium	World's largest producer (47% of global mine output)	Foundational battery material for EVs and grid storage; Australia dominates upstream supply but needs downstream processing
Rare earth elements	Fourth-largest producer globally; growing separation capacity	Essential for permanent magnets in EV motors, wind turbines, and defense systems; critical alternative to Chinese supply
Cobalt	Third-largest producer; ethically sourced alternative to DRC	Key battery cathode material; Australia offers responsible supply chain free from artisanal mining concerns
Graphite	Emerging producer with large resources in South Australia, Queensland	Essential battery anode material; China controls 65% of global production and virtually all anode processing
Nickel	Fifth-largest producer; established processing at Murrin Murrin, Kwinana	Critical for high-nickel battery cathodes; Australia offers Class 1 nickel production at ethical and environmental standards
Manganese	Third-largest producer; GEMCO operation among world's biggest	Steel additive and emerging battery cathode material; concentrated supply chain needs diversification

Lithium: The Flagship Strategic Material

Lithium is the cornerstone of Australia's strategic materials ambitions. Australia produced approximately 86,000 tonnes of lithium content in 2024, accounting for roughly 47% of global mine production, overwhelmingly from hard-rock spodumene deposits in Western Australia. The Greenbushes mine, operated by Talison Lithium (a joint venture of Tianqi Lithium and Albemarle), is the world's largest lithium mine. Other major operations include Pilgangoora (Pilbara Minerals), Mount Cattlin (Allkem/Arcadium Lithium), and Wodgina (Mineral Resources/Albemarle).

The strategic challenge for Australia is moving beyond raw spodumene concentrate exports to domestic production of battery-grade lithium hydroxide and lithium carbonate. Several conversion facilities are in operation or under construction, including Tianqi's Kwinana plant, Albemarle's Kemerton facility, and Covalent Lithium's Mt Holland operation. However, China still processes the majority of Australian spodumene, and building sufficient domestic conversion capacity to shift this balance remains a multi-billion-dollar, multi-year endeavor. The strategic materials designation ensures that lithium processing projects receive priority policy attention and financial support.

Rare Earth Elements: Building an Alternative Supply Chain

Rare earth elements are designated as strategic because they represent Australia's single greatest opportunity to disrupt China's near-monopoly on a critical material group. China controls approximately 60% of global rare earth mining, but more importantly, it controls over 85% of rare earth separation and over 90% of rare earth magnet manufacturing. This concentration gives China effective chokepoint control over the permanent magnets used in electric vehicles, wind turbines, and military systems.

Australia is building an alternative supply chain from mine to separated oxide. Lynas Rare Earths, headquartered in Australia with mining operations at Mount Weld in Western Australia and processing in Kuantan, Malaysia, is the largest rare earth producer outside China. Lynas is constructing a rare earth processing facility in Kalgoorlie, Western Australia, which will eventually replace the Malaysian operation. Iluka Resources is developing Australia's first fully integrated rare earth refinery at Eneabba. Arafura Resources' Nolans project and Northern Minerals' Browns Range project add further capacity to Australia's rare earth pipeline.

Cobalt: Ethical Supply for Battery Markets

Australia's cobalt production comes primarily as a by-product of nickel mining, with operations in Western Australia producing cobalt sulfate and cobalt metal at facilities that meet the highest environmental and labor standards. This positions Australian cobalt as a premium, ethically sourced alternative to cobalt from the Democratic Republic of the Congo, where artisanal mining practices have raised significant human rights concerns, particularly regarding child labor.

The strategic designation for cobalt reflects both the material's importance to lithium-ion battery cathodes and the growing demand from battery manufacturers and automakers for supply chain transparency and ethical sourcing certification. As the EU Battery Regulation and similar rules in the United States impose mandatory due diligence requirements on cobalt supply chains, Australian cobalt's premium positioning becomes a competitive advantage that the strategic designation reinforces.

Policy Support for Strategic Materials

Projects targeting the six strategic materials can access a comprehensive suite of government support measures. The Critical Minerals Facility provides concessional loans on terms more favorable than commercial financing, with the government absorbing a portion of the project risk. The Northern Australia Infrastructure Facility (NAIF) supports enabling infrastructure including roads, rail, ports, water, and energy for projects in northern Australia, where significant manganese, rare earth, and graphite resources are located.

The Australian Renewable Energy Agency (ARENA) provides grants for research and development in critical mineral processing technologies, while the Commonwealth Scientific and Industrial Research Organisation (CSIRO) operates dedicated programs for critical minerals beneficiation and recycling research. State governments complement these federal measures with their own programs, such as Western Australia's Future Battery and Critical Minerals Industries Strategy, which provides grant funding, subsidized industrial land, and energy infrastructure for battery materials processing facilities.

The strategic materials designation also opens doors to international financing and partnerships. Projects targeting strategic materials are the primary focus of discussions with the U.S. International Development Finance Corporation (DFC), Japan's JOGMEC, South Korea's Korea Mine Rehabilitation and Mineral Resources Corporation (KOMIR), and the European Investment Bank. These international institutions increasingly recognize Australia as a priority destination for critical minerals investment, and the strategic materials designation provides a clear policy signal that guides their decision-making.