Australia must seize its critical minerals opportunity by leveraging processing and refining, as the consultancy firm EY said that the nation must strengthen its position in global supply chains, as geopolitical tensions and concentrating processing capacity could reshape the wider resources landscape.
Through its Net Zero Centre report, the Risk and resilience: Rethinking Australia’s critical materials advantage in a disorderly world, said that the global supply chains that underpin modern economies were built around stable geopolitics, predictable trade and efficient market-driven investment.
“That world no longer exists,” the report said.
The report argues that Australia is well positioned to benefit from rising demand for lithium, cobalt, nickel, copper, rare earths and other critical materials, but that geology alone will not be enough to secure long-term advantage.
Instead, EY points to processing as one of the most important leverage points in the critical minerals supply chain, noting that China continues to dominate global refining capacity across most critical materials after years of sustained state-directed investment.
This means that Australia must move beyond the traditional model of exporting raw materials and importing higher-value processed products.
EY said the clean energy transition and rapid expansion of artificial intelligence are driving a “step-change” in demand for critical materials, with clean energy technologies requiring up to seven times more mineral inputs than fossil-fuel alternatives.
Demand for critical minerals is expected to quadruple by 2040, while lithium use is projected to increase fivefold, copper threefold, and other materials at least twofold.
The report said these demand pressures will intensify supply-chain vulnerabilities, particularly where production, processing or refining capacity is concentrated in a small number of countries.
But EY also said the scale of projected demand growth creates a window to reshape the system, with new capacity expected to be commissioned and built over the next five to 15 years; at the same time, the firm said that this is where Australia’s opportunity sharpens.
“Australia enters this moment with real advantages, we hold 26 per cent of global lithium reserves, 22 per cent of nickel, 18 per cent of cobalt and manganese, 11 per cent of copper, and 28 per cent of iron ore,” EY regional managing partner and chief executive officer David Larocca said.
However, EY said Australia’s future advantage will depend on how governments and industry act now, not simply on the scale of resources in the ground.
The report highlights Australia’s 2025 Critical Minerals Strategic Reserve as an example of a more active government role in supporting strategically important projects.
The reserve includes government-backed offtake agreements and selective stockpiling, designed to support supply security and help projects that may otherwise struggle to attract private finance.
EY said resilient supply chains will require stronger coalitions between governments and industry, linking complementary strengths across extraction, processing and manufacturing.
This is particularly important for middle powers such as Australia, with the report arguing that no single country can secure critical materials supply chains alone.
When it comes to business, EY urged companies to treat access to critical materials as a core investment decision rather than a procurement assumption.
It also encouraged industry to create higher-value midstream opportunities, pursue deeper partnerships and help develop the “system architecture” needed to turn individual projects into resilient supply-chain networks.
For governments, the report called for clearer strategic priorities, reduced investment risk, faster approvals, enabling infrastructure and the development of shared processing precincts that can deliver economies of scale.
EY also said Australia must move faster on strategically important projects while maintaining high environmental standards and genuine partnership with First Nations communities.
The report concludes that these measures are not long-term aspirations, but practical steps that should shape policy and capital decisions over the next one to three years.
Critical minerals demand is rising, but EY said the greatest value may sit between extraction and end-use manufacturing.
If Australia can build processing capability, secure trusted partnerships and reduce project risk, the nation could strengthen its role in the next phase of global critical minerals supply chains.
