The Federal Government has released the new Critical Minerals Strategy 2023-2030, which sets out a plan to capitalise on Australia’s critical minerals to create more resources jobs and support local and global efforts to achieve net zero emissions.
Federal Minister for Resources and Northern Australia, Madeleine King, has released the new strategy in a bid to make Australia a globally significant producer of raw and processed critical minerals and boost economic opportunities for all Australians, including First Nations people and regional communities.
As one of the first policy decisions under the strategy, the government will target $500 million of new investment into critical minerals projects, via the Northern Australia Infrastructure Facility.
The strategy highlights six focus areas:
- Developing strategically important projects, with targeted support
- Attracting investment and building international partnerships, to optimise trade and investment settings for priority technologies
- First Nations engagement and benefit sharing, to strengthen engagement and partnership with First Nations people and communities, and to improve equity and investment opportunities for First Nations interests
- Promoting Australia as a world leader in environmental and social governance (ESG) standards
- Unlocking investment in enabling infrastructure and services
- Growing a skilled workforce
Independent modelling has found increasing exports of critical minerals and energy-transition minerals could create more than 115,000 new jobs and add $71.2 billion to GDP by 2040.
However, the number of jobs could increase by 262,600, and the increase in GDP could soar to $133.5 billion by 2040 if Australia builds downstream refining and processing capability and secures a greater share of trade and investment.
The strategy will be an enduring framework to guide future government policy decisions to maximise the national benefits of Australia’s internationally significant critical minerals endowments.
The strategy will also establish a process to update the critical minerals list.
Ms King said the strategy makes it clear that Australia can play a crucial role in delivering the processed minerals the world needs for a clean energy future, building on a rich geological endowment and record as a reliable exporter of energy and resources.
“The new Critical Minerals Strategy outlines the enormous opportunity to develop the sector and new downstream industries which will support Australia’s economy and global efforts to lower emissions for decades to come,” Ms King said.
“While the potential is great, so too are the challenges. The strategy makes it clear our natural minerals endowment provides a foot in the door, but we must do more to create Australian jobs and capitalise on this unique opportunity.”
The decision builds on the government’s wider suite of policies to support the sector, including finance through the Critical Minerals Facility and National Reconstruction Fund, investments in research and development, and grants to help develop early to mid-stage critical minerals projects.
Australia is the world’s largest producer of lithium, the third largest producer of cobalt and fourth largest producer of rare earths. Australia also produces significant amounts of metals such as aluminium, nickel and copper, which combined with critical minerals, are crucial for low-emissions technology such as electric vehicles, batteries, solar panels, and wind turbines.
Critical minerals are also crucial components for medical technologies and defence applications.
International competition for investment in critical minerals is already intense, with incentives announced by the US and European Union designed to boost investment to diversify supply chains and to decarbonise their economies.
The Australian Government is also working with industry and international partners to help Australian projects link to emerging markets in the US, the United Kingdom, Japan, Korea, India, the European Union and its member states.
The strategy will involve collaboration with state and territory governments, and will work alongside the government’s key agenda items including:
- Australia’s Critical Technology Statement
- National Reconstruction Fund
- Australian Made Battery Plan
- National Electric Vehicle Strategy
- National Hydrogen Strategy
- Powering Australia Plan
- First Nations Clean Energy Strategy
The new Critical Minerals Strategy 2023-2030 is available on the Critical Minerals website, here.
Industry response
The Minerals Council of Australia’s CEO, Tania Constable, said that while the government’s new strategy does show progress in providing a coherent framework for integrating already well-developed policy areas, it also highlights the significant work that still needs to be done to deliver and implement an integrated Australian industry policy framework for mining processing and manufacturing.
“The strategy’s success will depend on regulatory policy settings that encourage and support investment into Australian mining, processing and manufacturing,” Ms Constable said.
“The industry looks forward to working with the government to design and implement the details of an integrated policy framework and deliver Australia’s potential as the global supplier of choice for the transition to net zero.”
Ms Constable said the stark reality of the monumental global net zero emissions transition is becoming clearer, with global demand for raw minerals and metals over the coming decades expected to increase at an alarming rate.
“Based on current mine sizes, by 2035 at least 384 new mines for graphite, lithium, nickel and cobalt alone are needed to provide the processed materials required to meet demand for electric vehicles,” Ms Constable said.
“By 2027, copper demand for manufacturing electric vehicles is expected to increase by 1.7 million tonnes.
“These rapid changes to raw materials supply-demand outlooks is why the list of critical minerals and strategic materials must also be updated regularly and inform policy decisions.
“Supported by the right economic policy settings and international partnerships, Australia’s rich resource endowment enables it to produce and process the full spectrum of critical minerals the world needs for electrification of our cars and transport systems, our phones and laptop computers, our health and defence systems.”
The Chamber of Minerals and Energy of Western Australia’s (CME) CEO, Rebecca Tomkinson, said that CME strongly agrees with the strategy’s articulation of the challenges the industry faces in bringing new supply of minerals online to meet increasing demand, noting it could take more than ten years to reach production from early-stage exploration.
“Alongside strategies and tools to promote Australia’s very high ESG standards, we must work towards reducing this timeline by removing duplication and simplifying processes.”
Ms Tomkinson said that to capitalise on the shared critical minerals ambitions of the state and the Commonwealth, policy efforts should be focused on areas of Western Australia’s competitive strength as a tier-one mining jurisdiction.
“Western Australia is already a world leading jurisdiction for the upstream production of critical and battery minerals globally, a factor that will continue to increase in importance to our nation’s trade partners,” Ms Tomkinson said.
“To capitalise on the potential share of economic value to be captured domestically, a continued commitment to both sustainable, competitive upstream raw materials production and downstream processing infrastructure is crucial.”
The Chamber of Commerce and Industry Western Australia (CCIWA) Chief Economist, Aaron Morey, on behalf of CCIWA, welcomed the Federal Government’s Critical Minerals Strategy, but emphasised the importance of implementing supporting policies to ensure its success.
According to Mr Morey, there are two policy areas that hold particular significance in determining Australia’s investment appeal: industrial relations and approvals.
Regarding industrial relations, Mr Morey said the government’s multi-employer bargaining reforms are yet to reveal their full impact on the economy, and that continuous monitoring is crucial, with significant adjustments anticipated.
“Additionally, the proposed ‘same job same pay’ policy poses a genuine risk to the resources sector. It is imperative that we limit the worst of this policy if we intend to foster the critical minerals sector.”
On approvals, Mr Morey said the Critical Minerals Strategy commits to “enable fast, efficient, and durable environmental approvals”, and that it is critical that the government honours this commitment.
“Failure to do so would impede Australia from fully realising its critical minerals potential.”
“CCIWA urges the government to follow up the release of its strategy by implementing supportive policies that create a favourable investment environment. By doing so, Australia can strengthen its position in the race to harness the substantial economic benefits offered by the critical minerals sector,” Mr Morey said.
The Association of Mining and Exploration Companies (AMEC) has also welcomed the release of the Critical Minerals Strategy.
AMEC’s CEO, Warren Pearce, said the strategy provides an enduring framework to build and shape Australia’s critical minerals industry into the future.
“Mineral exploration and mining make an enormous contribution to Australia’s economy, and we are in a unique position where Australia can take a global lead on extracting the critical minerals needed for decarbonisation.”
“There are currently 81 major critical minerals projects being developed in Australia, valued at approximately $40 billion. If we are to achieve our net zero ambitions, critical mineral projects need to move ahead in order to provide the minerals needed to develop decarbonisation and renewable technologies.”
“For this to happen, we need more efficient and effective regulatory approvals processes to enable mineral exploration and mining projects to be developed in a time efficient and cost-effective manner.”
Mr Pearce said that while the strategy aims to harness critical minerals opportunities, AMEC would also like to see the government look more closely at copper and nickel, and other areas such as lithium and vanadium redox batteries, which are Australia’s opportunity to establish the full battery supply chain, from pit to battery and into the grid.
