This page belongs to: Critical Minerals Strategy 2023–2030

1. Developing strategically important projects

Targeted, proportionate support from the Australian Government to de-risk strategically important critical minerals projects, attract private finance, and ensure Australian processing and manufacturing projects can access Australian minerals.

Why action is needed

Australia’s critical minerals sector can be more than just a trusted and reliable supplier of raw materials. We also want to capture a growing share of downstream processing and, where viable, manufacturing. This will enable us to realise the full value of our natural resources and maximise the benefits for the nation.  

Our geological advantages and world-class resources sector give us a natural entry-point into these markets. But moving further into downstream processing is a significant undertaking that requires concerted action.

Critical minerals projects face complex challenges, including:

  • technical risks due to complex mineralogy and the need for specialised processing
  • project risks associated with operating in remote areas, significant capital and energy requirements, and the fact many proponents are junior miners
  • market risks from concentrated supply chains, opaque markets and limited pricing data.

Together, these factors can pose challenges securing offtake, equity and debt finance for critical minerals projects. Some strategically significant critical minerals projects may require targeted support to overcome obstacles and become commercially viable and financially self-sustaining, from exploration, design and feasibility and offtake qualification, through to final investment decision and production.

Well-designed support can de-risk investment, crowd in private sector funding, attract foreign investment and mature the sector. In a competitive global market, it is important that Australia’s efforts are targeted and proportionate for the greatest strategic and economic impact.

The Government will support the sector across the 6 focus areas, including with communication, coordination, regulation and financial support. Support will be prioritised for minerals that are used in priority technologies.

'Government support is key to fast-track approvals that incorporate the world’s best decarbonisation objectives, and to crowd in private capital by deploying patient, national-interest equity, infrastructure, debt, export credit and grant finance.'

– Academic policy expert
Case study

Mineral processing in Australia

Australia has a long and successful history of processing critical materials. This industry has made significant contributions to Australia’s prosperity and, by capitalising on the global clean energy transition and supply chain diversification ambitions, will continue to do so into the future.

Wesfarmers Chemicals, Energy and Fertilisers (WesCEF) is part of Wesfarmers Limited. As well as extracting and using raw minerals, the company adds value by converting them into higher value commodities that support Australian and global industries by manufacturing and distributing essential chemicals, energy and fertilisers. WesCEF also applies this value-add approach to its newest joint venture project that will see it use the critical lithium resource at Mt Holland in Western Australia as a feedstock to its integrated refinery at Kwinana. The project is expected to produce approximately 50,000 tonnes per year of battery-grade lithium hydroxide

The Australian Government is targeting support at critical minerals producers seeking to establish mineral and chemical processing operations onshore. Through the Critical Minerals Development Program the Government has awarded $100 million to projects including Australian Energy Storage Solution’s battery precursor manufacturing operations, Queensland Pacific Metals’ energy chemicals refinery, and AlphaHPA’s precursor production facilities.

What we are already doing

The Government already supports strategically important projects at vulnerable points in their development.

Targeted support to accelerate development of critical minerals projects

In order to build clean energy technologies, we first need to know where to find the raw minerals. Geoscience Australia’s $225 million Exploring for the Future program provides world-leading, precompetitive geoscience data and information to encourage investment in new resource projects today and in the future. This information is essential to inform future investment in exploration and development for critical minerals. To date, the program has stimulated new investment in Australia, with the uptake of 419 new exploration tenements by 49 companies.

The $100 million Critical Minerals Development Program has provided 19 grants to help early and mid-stage critical minerals projects to overcome technical and market barriers to production. These projects will produce minerals such as lithium, cobalt, graphite, high-purity alumina (HPA), tungsten, tantalum, battery precursor chemicals and vanadium. They will embed Australia in supply chains for crucial technologies like:

  • lithium-ion and vanadium flow batteries
  • defence industry technologies
  • advanced medical equipment
  • LED lighting
  • optics technologies.

The Government supports advanced critical minerals projects by providing loans, guarantees and equity investments through:

To date, these financing agencies have approved 9 loans totalling A$2.3 billion to critical minerals projects. These projects are currently working towards production.

The Government’s flagship National Reconstruction Fund will also be able to support critical minerals projects, particularly through $1 billion earmarked for ‘Value-add in resources’, and $3 billion earmarked for ‘Renewables and low emission technologies’ priority areas.

Alongside commercial support, Export Finance Australia administers the $2 billion Critical Minerals Facility (CMF). The CMF supports projects of national strategic significance that align with the objectives of the Critical Minerals Strategy where private sector finance is unavailable or inadequate.

Since the CMF’s establishment in September 2021, A$1.5 billion in financing has been committed to three strategically significant projects.

  • Iluka Resources, which received a A$1.25 billion loan to develop its Eneabba Rare Earths Refinery. The refinery will produce separated rare earth oxide products including praseodymium, dysprosium, neodymium and terbium. These are used in permanent magnets for sectors such as electric vehicles, clean energy and defence
  • Renascor Resources, which received a A$185 million loan for its Siviour Graphite Project. The project will establish a vertically integrated graphite mine and manufacturing operation to produce high-purity graphite for lithium-ion batteries
  • EcoGraf, which received a US$40 million loan for its Battery Anode Material Facility to produce high-purity graphite products.

Research and commercialisation

Australia’s world class research and development (R&D) institutions are well placed to address technical challenges for critical minerals project development.

The Cooperative Research Centre (CRC) Program funds industry-led collaboration between industry, academia and end users. This includes the Future Battery Industries CRC which enables value adding to Australian resources, supports domestic refining and manufacturing of materials, components, cells and packs. It also aims to help address the challenges associated with the energy transition.

The Government is investing up to $50.5 million to establish the Australian Critical Minerals Research and Development Hub. It is addressing strategic technical challenges and will support international R&D collaboration by bringing together the world-leading R&D expertise within Geoscience Australia, Commonwealth Scientific and Industrial Research Organisation (CSIRO) and Australia's Nuclear Science and Technology Organisation (ANSTO).

The $50 million Resources Technology for Critical Minerals Trailblazer will build research capabilities, increase commercialisation and invest in industry engagement. The initiative is hosted by Curtin University in partnership with The University of Queensland, James Cook University and over 30 company partners across Australia.

A key challenge for Australia is ensuring that our intellectual property (IP) and technologies are deployed to grow the Australian sector. The Government is reviewing licensing and commercialisation settings for federal science agencies and R&D initiatives to ensure they encourage benefits flowing to the domestic sector. Australia’s globally renowned expertise in mining equipment, technology and services (METS) encourages strong international partnerships that should continue to be fostered. Existing research hubs create long-term partnerships that collaboratively develop research and technologies domestically and internationally. Australia’s intellectual property system plays an important role in attracting new technologies from overseas, by facilitating the transfer of IP through licensing, trade and investment. It will be crucial to build partnerships with and attract investment from, international companies that have developed and deployed relevant IP overseas. This will enable Australia to benefit from technologies that have been proven and accelerate how quickly we can scale up the sector.  

What we will do

The Northern Australia Infrastructure Facility (NAIF) will play an important role in supporting the growth of the critical minerals sector. To support the growth of the critical minerals sector, particularly downstream processing, the Government will ask NAIF to earmark $500 million to support projects that align with this Strategy.

Australia is the world’s biggest producer of raw battery minerals, but we currently have a modest share of the global markets for processed minerals and high purity battery precursors. Our Australian Made Battery Plan will use our significant endowment of critical minerals to build Australia’s domestic battery manufacturing capability.

The global race to secure supplies of critical minerals is rapidly accelerating. Foreign companies are securing ownership and offtake arrangements for a large share of Australian minerals, particularly lithium and rare earth elements. In this context, Australian processors and manufacturers may struggle to access supplies of Australian minerals in future. This would affect our strategic and energy security.

Increasing Australia's sovereign capability in mineral processing will involve moving beyond exporting ores and undertaking more concentration, separation, refining and smelting onshore. We can use these high-purity, value-added chemicals and metals to realise economic benefits for Australia. For example, at present Australia’s lithium and cobalt resources are largely exported as concentrates. By chemically refining these minerals to produce lithium hydroxide and precursor active materials, Australia has an opportunity to add significant value to our exports.  

The Government is analysing the type and volumes of minerals our emerging downstream processing and manufacturing sectors will need and when they will need them and where the best economic gains are in the chain of production of batteries. This includes considering policy options that enable domestic supply of Australian critical minerals for Australian projects. The form and remit of any future approach must be tailored to the specific needs of the Australian economy within the global context.

Australia can scale up downstream processing and manufacturing by encouraging collaboration with, and attracting investment from, global firms that have developed and proven their IP overseas. This is becoming a growing focus for companies that are increasingly pursuing strategic commercial partnerships, which also enable access to IP and knowledge sharing from demonstrated experience of international partners. There is potential for these partnerships to be leveraged to ensure Australia continues to attract international IP and grow domestic capability. Further, Australia’s intellectual property system plays an important role in attracting new technologies from overseas, by facilitating the transfer of IP through licensing, trade and investment  

Key actions

  • The Northern Australia Infrastructure Facility (NAIF) will play an important role in supporting the growth of the critical minerals sector. To support the growth of the critical minerals sector, particularly downstream processing, the Government will ask NAIF to earmark $500 million to support projects that align with this Strategy.
  • Establish the National Reconstruction Fund, which includes $1 billion for value-add in resources and $3 billion for renewables and low emissions technologies.
  • Continue to evaluate the appropriateness of policy settings in the context of critical minerals’ linkages to critical technologies, national priorities and Australia’s competitive strengths, including how investment settings complement Government initiatives.
  • Support a strong pipeline of new critical mineral discoveries and projects through government geoscience programs and strategic leadership.
  • Review licensing and commercialisation settings for federally funded research relevant to the critical minerals sector to ensure it provides domestic benefit aligned with the Strategy’s vision.
  • Leverage Government research and development programs, capabilities and leadership to support the sector’s development.
  • Analyse the type, volume and timing of mineral requirements for Australia’s processing and manufacturing sector.
  • Wherever appropriate, industry policies should complement broader policy goals such as:
    • genuine engagement, agreement making and benefit sharing of business and employment outcomes with First Nations communities
    • gender equality
    • regional development
    • environmental sustainability and emissions reductions
    • alignment with state and territory plans for developing critical minerals.

Updates to this page

This page was updated on 29 June 2023 with edits to the ‘Mineral processing in Australia’ case study.