The country plans to become a world leader in downstream processing steps.
Australia’s Minister for Resources and Northern Australia Madeleine King has unveiled the country’s long-awaited Critical Minerals Strategy. The Indo-Pacific nation plans to become a significant producer of raw materials and processed critical minerals while boosting its economy.
The strategy focuses on attracting international investment and building partnerships with allied countries to develop strategically important projects. The underlying goal of the plan is to make Australia a world leader in critical minerals extraction and processing while also becoming a forerunner in environmental and social governance-related fields. The strategy incorporates collaboration with First Nation communities to share the economic benefits with all Australians. The combined efforts of the plan will help to grow a skilled workforce to enable Australia’s economy to prosper, according to King.
Studies project that solely expanding the exports of critical minerals could create more than 115,000 new jobs and add $71.2 billion to GDP by 2040. If Australia builds downstream refining and processing capability and secures a greater share of trade and investment through the new strategy, however, these numbers could further increase to 262,600 additional created jobs, and the increase in GDP to $133.5 billion by 2040, Kind adds.
The first measure of the strategy will be the allocation of A$500 million (US$340 million) into critical minerals projects. Compared to billions of dollars raised under the Inflation Reduction Act in the U.S., this amount seems rather small, King however asserts that it is “nothing to sneeze at,” and is only the first step Australia takes under its new framework. The strategy also introduces a process to update the list of critical minerals to establish the possibility to respond to market developments.
China Dominates Downstream Processing
Australia is currently the world’s largest producer of lithium, producing almost half of the world’s supply, according to the U.S. Geological Survey. Additionally, the country is the third-largest producer of cobalt and fourth largest producer of rare earths. But examining downstream production steps, most of the raw material is shipped to foreign countries, especially China, which dominates most refining and processing stages. Chinese companies have already invested in Australia’s critical mineral industry, but future decisions would be made by the Foreign Investment Review Board. King emphasized in an interview with Bloomberg that Australia is “competing with China here.” The Pacific nation is dissatisfied with China’s monopoly for some time now, with King highlighting the importance of international cooperation to hedge against the People’s Republic’s dominance earlier this year.