There is a craze for critical minerals.
Anthony Albanese, the prime minister, is in the White House to discuss Australia's abundant reserves with President Donald Trump.
To Trump's chagrin, China, which controls a large portion of the world's supply of rare earth elements, has put new limitations on exports.
It is evident that a period of worldwide competition is currently under progress. The production of cutting-edge technology like artificial intelligence (AI), electric cars, and renewable energy sources depends on critical minerals. And governments around the world are rushing to guarantee a supply in the future.
Large quantities of cobalt, tungsten, rare earth elements, and lithium are found in Australia. This poses an impending problem as well as a fantastic opportunity.
What are essential minerals exactly? What benefits could they provide to Australia?
What are they?
The raw elements needed to make things like wind turbines, smartphones, and weaponry are known as critical minerals.
From F-35 fighter jets to lithium-ion batteries, they serve as the foundation for the technologies of the coming industrial era.
Since each country has its own idea of what is vital, there is no universal list of critical minerals.
With supply networks susceptible to geopolitical risk, the Australian government characterizes them as components necessary for contemporary technologies, the economy, and national security.
Lithium, magnesium, and zirconium are among the 31 rare earths and minerals that are classified as "critical" in Australia. Heavy metals called rare earths are utilized in magnetic and electrical components.
Although these elements are not actually uncommon in the crust of the Earth, their low concentrations make extraction challenging and costly.
Large-scale important mineral deposits have been mapped throughout the continent by Geoscience Australia. By gaining access to them, Australia might establish itself as a major provider to the renewable energy sectors worldwide.
A flourishing sector
Australia's current Critical Minerals Strategy lays out a plan to refine, process, and manufacture these minerals instead of just mining and extracting them.
Initiatives like the $4 billion Critical Minerals Facility, which supports projects in line with the strategy, promote this. A new 10% production tax credit for onshore refining is also included in this.
These regulations work well together to promote investment and domestic mineral processing. However, how quickly they can be turned into actual initiatives will determine how effective they are.
These are beginning to appear. Mining firms like Alpha HPA and Arafura Rare Earths are building chemical processing facilities for high-purity alumina and magnet materials.
High-value materials can now be produced domestically because to innovative refining methods being developed by the Critical Minerals Research and Development Hub, which is directed by CSIRO. Once thought to be lagging behind its geological advantage, Australia's technical capability is now coming up.
However, the majority of Australia's essential minerals are still shipped unprocessed. There is still little domestic processing and refining, and growth is hampered by high energy prices and a lack of workers.
Australia continues to rely on processing elsewhere, which reduces the economic potential of its resources.
The environmental impact of key mineral extraction is significant. One tonne of lithium requires 77 tons of fresh water and produces 15–20 tonnes of CO₂.
The government must make investments in environmentally friendly, sustainable technologies.
An increasingly competitive world race
Growing trade tensions between the US and China have made action more urgent. China has tightened its export regulations on rare-earth elements and magnet technology in recent weeks, requiring international companies to obtain special permission before exporting goods that even slightly incorporate Chinese content.
In retaliation, President Trump declared that starting next month, all Chinese imports would be subject to a 100% tariff, an action intended to disentangle US supply lines from Chinese hegemony.
Australia faces both opportunities and risks as a result of this geopolitical upheaval. In an effort to diversify its supply chains and move away from China, Washington is investing more quickly with miners in Australia.
Canberra, on the other hand, is investigating the creation of a key Minerals Strategic Reserve, an investment program that would allow the federal government to selectively stockpile and grant preferred access to allied buyers while acquiring agreed volumes of key minerals from commercial ventures.
Global energy behemoths are focusing on vital minerals. The development of commercial-scale extraction technology is expected to accelerate significantly with the entry of such well-funded firms.
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