CRITICAL MINERALSAustralia’s Leadership Imperatives in Critical Minerals

By Ian Satchwell

Published 18 April 2024

Australia, like Canada, is well placed to be a global leader in the critical minerals sector. The country has the natural endowment, technical expertise and experience, global mining footprint, and mining capital base to back a claim to worldwide leadership.

Australia, like Canada, is well placed to be a global leader in the critical minerals sector. Our nation has the natural endowment, technical expertise and experience, global mining footprint, and mining capital base to back a claim to worldwide leadership. 

As advanced industrialized nations seek to diversify and strengthen supply chains for critical minerals, they need a well-coordinated, harmonized system that exploits market dynamics and targeted government intervention. Instead, critical minerals lists and strategies vary widely between nations, while a plethora of disconnected international agreements challenge coordination of development of new supply chains. 

Australia could well be key in resolving this challenge, if it can facilitate better international, domestic, governmental and private-public cooperation. 

A new ASPI Special Report, Reclaiming leadership: Australia and the global critical minerals race, finds that a tangled web of actions by like-minded producer and consumer nations, designed to facilitate new, secure and sustainable supply chains for critical minerals, threatens to fragment global efforts. 

Further, while Australia has become a party to many agreements and processes involving critical minerals supply chains, it has not yet shown how it will work beyond its shores with partner nations to develop a global network of supply chains involving other mineral producer countries as well as itself. Its current Critical Minerals Strategy focusses only on domestic production for supplying customer nations. 

Critical minerals are those which are essential to the global energy transition, high technology and defense and for which supply is at risk of disruption. Supply risk stems from the concentration of mining and processing of many critical minerals in the hands of just a few nations. This exposes supply chains to natural disasters, civil strife, regional conflict and withholding of sales for geopolitical reasons. 

New sources of production and processing, linked to customer nations by secure and sustainable supply chains, are needed to meet demand, particularly in industrialized economies such as the United States, Japan, Korea, Britain and European Union members. 

Analysis of lists of minerals deemed ‘critical’ by major consumer nations and by Canada and Australia, the two major suppliers apart from China, reveals fragmented classifications. Among more than 50 minerals that the countries variously identify as critical, only 13 are classified as such by all of them. 

Harmonization of the disparate lists of minerals deemed critical is needed to provide the basis for more coordinated efforts to develop new supply chains. 

The main consumer countries plus Australia and Canada have concluded a web of agreements aimed at building new supply chains based in their own territory or in mineral-rich developing countries. For example, the US-led Minerals Security Partnership is resulting in new supply chains from Australia to the US as well as from others, including African countries. Australia’s role is to lend governance expertise and encourage investment to underpin sustainable production in third countries. Other agreements are similar. 

Most of the agreements have a common aim: to diversify and secure supply chains and ensure their sustainability from environmental, social and economic perspectives. 

But the sheer number of agreements and their tendency to compete with each other inhibits achievement of the objective. This seems to have been driven by geopolitical desires to sign agreements rather than getting on with implementation.