Australia to Stockpile Critical Minerals

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Written by Martin Lynch, European News Editor for IIR News Intelligence (Sugar Land, Texas)

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Summary

Australia is fast-tracking plans to create a critical minerals reserve to boost its position as a global supplier to allied countries and to reduce its reliance on China.

The Australian government is moving forward with its A$1.2 billion (US$800 million) plan to buy and stockpile strategic critical minerals essential for clean-energy and high-technology manufacturing as well as advanced military equipment.

The Goal

The aim of the Critical Minerals Strategic Reserve (CMSR) will be to allow Australia to secure its own supplies, reduce its reliance on China and become a leading supplier of critical minerals to the European Union (EU), U.S. and others. The country is one of the leading producers of rare earths outside China, but it is, like most other global nations, vulnerable in key areas. Last year, Industrial Info reported that the government had announced its Critical Minerals Production Tax Incentive, designed to cover 10% of the relevant processing and refining costs for Australia's 31 critical minerals, over the period 1 July 2027 to 30 June 2040. The critical minerals incentive is valued at A$7 billion (US$4.5 billion) over the decade. For additional information, see March 5, 2025, article - Australia Introducing Tax Credits for Green Hydrogen, Critical Minerals. L

In recent months, Australia has signed agreements with the EU, the U.S. and Canada among others with regard to supplying critical minerals in return for financing Australian projects. In the past week, Australia was invited by the U.S. Treasury Secretary Scott Bessent to a meeting of finance ministers from the Group of Seven (G7) advanced economies to discuss critical minerals. The G7 includes the U.S. U.K. Japan, France, Germany, Italy and Canada, as well as the European Union (EU). 

First Minerals

The first minerals to be the focus of the Strategic Reserve will be antimony, gallium and rare earth elements--all of which are controlled by China. Antimony is crucial in military and industrial applications, ranging from a hardening agent in military ammunition, semiconductor manufacture and flame retardant applications in aerospace. Gallium is essential for the semiconductor and defence industries and is a key component in telecoms, radars, solar panels, LEDs and high-frequency electronics. Today, China controls approximately 85% of global antimony production and an estimated 95% of global refined gallium production. When it comes to rare earths, Australia has the second-largest cache of rare earth reserves but has very little in the way of domestic processing. According to Discovery Alert, China controls 87% of global processing capacity and a 92% share in permanent magnet manufacturing. 

Australia's Treasurer Jim Chalmers said: "The world needs critical minerals--Australia has plenty of them and our critical minerals reserve will help us weather global economic uncertainty and help to boost trade and investment. In a rapidly changing world, the Strategic Reserve is all about safeguarding Australia's future prosperity. Ensuring we have a reliable reserve of these critical resources will strengthen supply chains and help to stabilise critical minerals markets. This means a more reliable supply of the resources we all need for the future." 

Industry Reaction

The latest announcements on the Strategic Reserve were widely welcomed by industry associations and leading mining companies. Larvotto Resources Limited (Broadway Nedlands, Western Australia), which is developing the country's largest antimony deposit in Hillgrove in New South Wales, welcomed the news. Managing Director Ron Heeks commented: "Larvotto welcomes the Federal Government's initiative to support domestic production of critical minerals, including securing a reliable supply of antimony for Australia and its allied partners. The decision to prioritise antimony provides clear validation of the strategic importance of the Hillgrove Project. The Strategic Reserve supports the strong investment into the Hillgrove Project and reinforces the importance of progressing final approvals efficiently as we move towards production in mid-2026." Hillgrove will be capable of producing around 5% to 7% of global mine supply at full capacity. Industrial Info is tracking six Hillgrove projects. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the reports. 

The Association of Mining and Exploration Companies (AMEC) welcomed the news but called for more detail on how the reserve will work in the real-world. AMEC Chief Executive Officer Warren Pearce said: "While the announcement today is an important step, we await further advice from the government on the remaining design options -- including the financial mechanisms it will need to implement to operationalise the CMSR. It is also vital the government is able to ensure state and federal permitting processes are appropriate, efficient, streamlined and fit-for-purpose to enable rare earth, gallium and antimony projects to proceed and enable the government's objectives with the CMSR to be met."

Key Takeaways

• Australia is fast-tracking plans to create its A$1.2 billion (US$800 million) critical minerals reserve. 
• The country has signed key critical minerals deals with the EU, U.S. and Canada in recent months.
• The first minerals to be the focus of the Strategic Reserve will be antimony, gallium and rare earth elements--all of which are controlled by China.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).