CRITICAL MINERALSHow Australia, with Friends, Can Secure Its Place in Critical Minerals
As the United States recalibrates its industrial policies under President Donald Trump, Australia’s role in securing non-Chinese supply chains for critical minerals has never been more important.
Australia’s critical minerals sector is at a crossroads. As the United States recalibrates its industrial policies under President Donald Trump, Australia’s role in securing non-Chinese supply chains for critical minerals has never been more important.
To secure its critical minerals industry in partnership with friends such as the US, Australia must ensure US trade policies actively support its push to move up the value chain. It also needs a strategy to sustain key production during downturns, must better align critical minerals, defense and industrial policies, and it should push for stronger reciprocal investment from allies, especially in processing and refining.
While Australia is at the center of such initiatives as the US’s Minerals Security Partnership and AUKUS, practical outcomes such as viable new supply chains depend on targeted investment and policy coherence. The 2024 suspension nickel mines in Western Australia and ongoing challenges in rare earth and lithium processing expose serious vulnerabilities. Australia risks becoming a weak link in the supply chain, rather than a strategic powerhouse.
Established in June 2022, the Minerals Security Partnership was designed to promote responsible mineral production and processing among partner countries. Joe Biden considered Australia a key part of this vision, but Trump’s return adds uncertainty. While his administration is pushing for reduced dependence on China, his inward-looking trade policies could unintentionally harm Australia’s contribution.
If tariffs extend to processed or refined critical minerals, as they cover aluminum, Australia may be discouraged from moving up the supply chain. As of 2023, Australia supplied about half of the world’s raw lithium but lacked the processing capacity to realize the material’s full value. Mineral refining remains a weak point; China dominates the sector. Australia needs investment to compete, and the US is the partner of choice. Yet Australia supplies relatively few critical minerals to the US, limiting its leverage.
At least five Western Australian nickel mines suspended operations in 2024 due to global oversupply and falling prices. The closures resulted in major job losses and raised concerns about supply chain resilience.
Nickel is a strategic material, with uses in batteries and defense. Indonesia, the world’s top nickel producer, is aligning itself closely with China and has joined the BRICS. So declining production in Australia is a strategic misstep.
