Australia Critical Mineral Reserve Plan Targets Supply Security and Project Support

Australia Critical Mineral

Australia’s Labor government has announced a $720 million plan to establish a national critical mineral reserve by 2026. The Australia critical mineral reserve would include offtake agreements to help projects nearing feasibility but struggling to secure financing. If re-elected in the May 3 election, Labor plans to implement the reserve to strengthen Australia’s position in global supply chains.

Rare Earths and Battery Materials to Benefit from Government Support

The proposed Australia critical mineral reserve will selectively cover minerals from the national critical minerals list, with a particular focus on rare earths. Labor emphasized their importance but did not specify which minerals will be included. According to the Office of the Chief Economist, 25 projects remain stuck at the advanced feasibility stage. Of these, 19 are related to rare earths, graphite, mineral sands, nickel-cobalt, or vanadium—sectors that could benefit directly from government offtake agreements.

The plan also includes the sale of reserves to Australian industries and strategic international partners seeking to diversify away from China. This is in line with broader geopolitical efforts to reshape global critical mineral flows and improve resilience.

Federal and State Incentives Signal Policy Shift in Mineral Strategy

Australia has already introduced a 10% tax credit for mineral processing and refining starting from 2027–28. The federal government has also provided grants and loans to critical mineral projects over the past three years. State-level initiatives like Western Australia's A$150 million lithium support package further highlight policy alignment. WA’s package includes interest-free loans and fee waivers to help lithium producers stay competitive.

The Labor government’s reserve proposal would give Canberra authority to purchase, stockpile, and sell critical minerals, a move reminiscent of U.S. and EU strategies. Prime Minister Anthony Albanese linked the announcement to recent trade tensions, especially in response to former U.S. President Donald Trump's tariff policy update.

The Metalnomist Commentary

Australia’s proposed critical mineral reserve reflects an assertive move to anchor itself in the global energy transition. If implemented, it could reshape investment flows and reduce dependency on volatile private-sector funding cycles, especially for rare earth and battery material projects.