Australia’s Liontown moves to underground Li mining at Kathleen Valley

Liontown

Australia’s Liontown moves to underground Li mining at its Kathleen Valley complex. Australia’s Liontown moves to underground Li mining after it stopped open-pit mining. Therefore, the producer is prioritising higher-grade feed and lower unit costs.

Liontown will keep processing stockpiled open-pit ore into the early July 2026–June 2027 financial year. The company previously relied heavily on open-pit ore for mill feed. Meanwhile, open-pit operations provided 56% of total mined ore in July–September 2025.

Higher-grade underground ore targets better recoveries and costs

Australia’s Liontown moves to underground Li mining to lift lithium recoveries at Kathleen Valley. The company expects recoveries to reach about 70% by March 2026. That compares with 58.3% in 2024–25 when it relied mainly on open-pit ore.

Lower recoveries hit output and guidance last year. Liontown produced 155,000 tonnes of spodumene concentrate in 2024–25. However, that fell below its 170,000–185,000 tonne guidance due to weaker recovery performance.

Australia’s lithium ramp-up raises the bar for operating discipline

Australia’s Liontown moves to underground Li mining as national supply growth continues. Australia’s Office of the Chief Economist raised its lithium production forecast for 2025–26. It expects Australian lithium mine output to grow 9.1% per year across 2024–27 financial years.

Other producers are also expanding spodumene capacity. Talison Lithium increased Greenbushes spodumene capacity by about 500,000 tonnes per year to 2.14mn tonnes per year. As a result, cost control and recovery optimisation will matter more across the lithium supply chain.

The Metalnomist Commentary

This shift is a classic move from volume to margin. However, underground execution can introduce dilution and scheduling risk. The operators who stabilise recoveries will outperform in a crowded spodumene market.

Australia Unveils $4.5 Billion Tax Incentive to Boost Critical Minerals Sector

the Critical Minerals Production Tax Incentive (CMPTI)

CMPTI Targets Lithium, Rare Earths, and Other Strategic Metals to Secure Global Supply Chains

Australia has passed a landmark law — the Critical Minerals Production Tax Incentive (CMPTI) — aimed at increasing domestic processing of critical minerals essential for the global energy transition. This A$7 billion ($4.5 billion) policy will grant eligible producers a 10% tax offset on processing and refining costs over a 10-year project lifespan, starting from July 2027 to June 2040.

The legislation stands as one of the most significant government-backed resource incentives in Australia's history. It is expected to attract international investment, enhance supply chain security, and cement Australia's role as a global powerhouse in the critical minerals market. Federal Resources Minister Madeleine King described the policy as a “game changer” for the nation’s mining and refining sector.

Critical Minerals in Focus: Lithium, Cobalt, and Rare Earths Lead the Pack

The CMPTI applies to all 31 minerals listed on Australia’s official critical minerals list, which includes high-demand metals such as lithium, cobalt, vanadium, tantalum, gallium, rare earth elements, and tungsten. These metals are essential for producing electric vehicles, solar panels, wind turbines, semiconductors, and advanced defense systems.

Notably, these same minerals are also recognized as critical by strategic global partners, including the United States, European Union, India, Japan, South Korea, and the United Kingdom. This alignment underscores the importance of Australia’s role in creating reliable, ethical, and diversified sources of supply.

Hydrogen Production Incentive Complements Clean Energy Push

In tandem with the CMPTI, the legislation also introduces a hydrogen production tax incentive of A$2 per kilogram for renewable hydrogen. This dual-incentive framework positions Australia to lead not just in raw material extraction but in the green energy revolution, promoting cleaner technologies and reducing reliance on carbon-intensive imports.

With the global demand for low-emission technologies surging, Australia’s tax incentive scheme enhances its appeal as a long-term partner in securing clean energy infrastructure.

Tomago Aluminium Smelter Gains NSW Support as Power Costs Threaten Capacity

Tomago aluminium

Tomago aluminium smelter will receive additional support from the New South Wales government as Australia seeks to prevent the 600,000 t/yr facility from closing when its current electricity contract expires in 2028.

Tomago aluminium smelter support forms part of NSW's 2026-27 budget, alongside federal negotiations over a new long-term power purchase agreement. The governments are trying to create an electricity cost structure that keeps one of Australia's largest industrial power users commercially viable.

Tomago aluminium smelter owner Rio Tinto had previously warned that the operation could close because of unsustainable electricity costs. Losing the facility would remove substantial domestic primary aluminium capacity and weaken Australia's downstream manufacturing supply chain.

The proposed support illustrates a broader challenge facing energy-intensive industries: governments want to preserve strategic domestic production while electricity systems undergo a costly transition toward renewable generation and new grid infrastructure.

Power Agreement Becomes Critical to Tomago’s Future

Australia's federal and NSW governments agreed in December 2025 to pursue a long-term support package for Tomago.

The proposal includes a fixed-price power purchase agreement designed to provide greater certainty over one of the smelter's largest operating costs.

In return, Tomago would commit to investing A$1bn in the facility over ten years from 2028.

That investment could help modernise the smelter and improve its competitiveness while Australia's electricity market changes around it.

Primary aluminium smelting requires enormous volumes of continuous electricity. This makes smelters particularly vulnerable to high wholesale power prices, network costs and uncertainty around future supply.

Tomago's 600,000 t/yr capacity also gives the negotiations strategic importance beyond the individual company. Closure would materially reduce Australian primary aluminium production and increase reliance on imported metal for domestic industrial users.

The government is therefore effectively weighing the cost of supporting power-intensive manufacturing against the economic and strategic consequences of losing the capacity altogether.

Renewable Infrastructure Could Reshape Australia’s Aluminium Economics

NSW is also allocating A$291mn for road upgrades supporting transport of equipment into renewable energy zones.

This infrastructure investment is relevant to Tomago because the long-term competitiveness of Australian aluminium increasingly depends on access to large volumes of affordable renewable electricity.

Aluminium smelters can potentially become major anchor customers for renewable generation because they consume power continuously at industrial scale.

However, the transition requires sufficient generation, transmission and firming capacity to maintain stable electricity supply around the clock.

The state budget also reflects the continuing importance of fossil fuel revenues during that transition. NSW has raised its royalty forecasts following higher thermal coal prices triggered by the global gas supply shock.

Coal royalty revenue is expected to remain substantial over the coming years even as NSW invests heavily in renewable infrastructure.

This creates a transitional industrial model in which existing resource revenues help finance the power system required for future low-carbon manufacturing.

For aluminium, the outcome at Tomago could become a test case. If governments and industry can establish a competitive long-term electricity framework, Australia could preserve primary metal capacity while gradually reducing its carbon intensity.

The Metalnomist Commentary

Tomago demonstrates that the future of primary aluminium will increasingly be decided by electricity economics rather than ore availability. Australia has abundant resources and renewable potential, but retaining smelting capacity requires turning that energy advantage into reliable industrial power prices.

BHP renewable power for copper projects accelerates South Australia’s low-carbon shift

BHP

BHP renewable power for copper projects is moving from strategy to execution in South Australia. The new deals with Neoen link Olympic Dam, Carrapateena and Prominent Hill to dedicated wind and battery assets, reshaping their long-term emissions profile. As a result, BHP renewable power for copper projects is becoming central to the group’s decarbonisation roadmap and its compliance with Australia’s safeguard mechanism.

Wind, storage and safeguard compliance for Olympic Dam

BHP will source 100MW of renewable electricity from Neoen’s 300MW Goyder North wind farm and 200MW Goyder battery. This follows an earlier contract for 70MW from Goyder South, which has supplied Olympic Dam since July. Together, these agreements should cover about 70pc of BHP’s copper-related electricity demand in South Australia by 2030.

Olympic Dam falls under Australia’s safeguard mechanism, where on-site generation counts towards covered scope 1 emissions. In 2023-24, Olympic Dam produced 244,321t of CO₂e, staying just below its 246,875t baseline. Therefore, BHP renewable power for copper projects is not just an ESG narrative but a direct tool for avoiding the surrender of additional ACCUs or safeguard credits.

Meanwhile, BHP still surrendered 47,000 ACCUs across 16 other facilities, including iron ore, coal and nickel operations. This highlights how decarbonisation progress remains uneven across the portfolio. However, the South Australian power strategy shows how dedicated renewable contracts can reduce both compliance risk and long-term power-price exposure.

Copper decarbonisation, diesel displacement and long-term risk

BHP is targeting a 30pc cut in operational greenhouse gas emissions by 2029-30 versus 2019-20 levels. The group has already reduced operational emissions to 8.7mn t CO₂e, a 36pc decline from that baseline. In this context, BHP renewable power for copper projects provides a tangible bridge between climate commitments and actual asset-level performance.

The company ultimately aims for net-zero operational emissions by 2050, mainly by displacing diesel in its mining fleets. Progress here has lagged because of technical delays in low-emission vehicle deployment. However, locking in large-scale renewable power for copper operations buys valuable time while mobile-equipment solutions mature.

For customers and policymakers, BHP renewable power for copper projects offers a clearer line of sight to lower-carbon copper supply. This matters as OEMs, grid operators and EV supply chains increasingly differentiate between standard and low-emission copper units. It also strengthens South Australia’s positioning as a hub for renewable-powered mining and processing.

The Metalnomist Commentary

BHP’s structured shift into contracted wind and storage underscores how decarbonisation is becoming a core competitiveness issue for copper miners. For metals buyers, the next phase will involve translating these renewable power deals into quantifiable, auditable carbon advantages at the cathode, rod and cable level.

Australia's Export Revenues from Iron Ore and Metallurgical Coal Projected to Decline in FY2025

Australia's export revenues from iron ore and metallurgical coal are forecasted to decline significantly in FY2025 due to a general decrease in international prices, despite increased port inventories in China and rising demand from emerging markets.

The Australian Department of Industry, Science, and Resources recently released its "Q3 2024 Resources and Energy Report," predicting that export prices for iron ore will fall to $96 per ton in 2024, $84 per ton in 2025, and $77 per ton in 2026.

For the fiscal year 2025 (April 2024 - March 2025), Australia's iron ore export revenues are expected to drop by 17.4% from AUD 138 billion in the previous year to AUD 114 billion. Further decline is anticipated in FY2026 (April 2025 - March 2026) with revenues projected to be AUD 102 billion.

Earlier reports had estimated FY2025 iron ore export revenues to be AUD 107 billion. However, improved economic indicators from China, Australia's largest export market, have led to increased port inventories and improved market sentiment, prompting a revision of the forecasts.

Nonetheless, recent price declines pose challenges. Iron ore prices fell by $7-10 per ton in June compared to the previous month. As of June 28, iron ore on China's Dalian Commodity Exchange was 819 yuan per ton ($112.7 per ton), while on the Singapore Exchange it was $105.65 per ton.

The price drop is attributed to weakening steel demand in China during the off-season and increased port inventories. The most significant negative factor in the international iron ore market is the excess supply of iron ore not absorbed by China's existing demand.

Contrary to the Australian government's projections, HSBC Holdings, a British multinational commercial bank, anticipates that international iron ore prices will reach $100 per ton in 2024. The bank believes that strong demand from emerging markets will prevent a significant price drop despite China's real estate crisis.

Capital Economics, a British economic research firm, predicts that iron ore prices will fluctuate between $99 and $100 per ton this year. The firm forecasts prices at $100 per ton in Q2 and Q4, and $99 per ton in Q3, with a drop to $85 per ton by the end of next year. The firm attributes the expected decline to prolonged recessions in major economies and weak global steel demand.

For FY2025, metallurgical coal export revenues are projected to fall by 31.1% from AUD 61 billion in the previous year to AUD 42 billion.

While Australia's production of metallurgical coal is expected to increase during this period, the decline in export prices will likely reduce export revenues. Metallurgical coal export prices are anticipated to drop from $264 per ton in 2024 to $228 per ton in 2025, and further to $208 per ton in 2026.

The Australian government and mining industry forecast that reduced demand from China, the largest importer, along with adverse weather conditions such as La Niña, could negatively impact production. However, they do not foresee the price decline triggering a crisis for Australian mining companies.

Australia Eyes National Critical Mineral Reserve Amid Tariffs

Anthony Albanese

Prime Minister Anthony Albanese Proposes Reserve for Strategic Materials

Australia's caretaker Prime Minister, Anthony Albanese, has announced plans to create a national critical minerals reserve. This proposal comes just hours after US President Donald Trump imposed sweeping tariffs on goods and services. The reserve would aim to safeguard Australia's access to essential materials, with the final approval contingent on Albanese's re-election on May 3, 2025.

Strategic Importance of Critical Minerals to Australia's Economy

While Albanese did not specify which critical minerals would be included in the reserve, Australia's current critical minerals list already includes materials such as rare earth elements, graphite, and cobalt. These materials are crucial for industries ranging from renewable energy to technology and defense. The establishment of a national reserve would ensure that Australia maintains control over these essential resources, especially in the face of global trade tensions.

Response to US Tariffs and Domestic Political Debate

The proposal comes in the wake of US tariffs and the broader geopolitical shift in trade relations. Earlier in March, the US rejected a non-financial critical minerals investment deal proposed by Australian diplomats, which included steel tariff exemptions. This rejection highlighted the growing importance of critical minerals in international trade and economic security.

Domestically, the opposition Liberal Party has also been vocal about critical minerals. On March 27, Peter Dutton, the Liberal Party’s prime ministerial candidate, announced plans to scrap the Albanese government’s A$14 billion hydrogen and critical mineral production tax credits. This move is part of his response to the government’s 2025 budget proposal. The debate over critical minerals underscores their central role in Australia's economic future.

Australia’s Thunderbird zircon mine financial support targets debt deadlines amid weak demand

Thunderbird Zr mine

Australia’s Thunderbird zircon mine financial support is arriving to protect working capital and debt compliance. Sheffield Resources and Yansteel will invest A$6.5 million into their Kimberley Mineral Sands venture. The funding supports operations at the Thunderbird mine as zircon demand weakens. Therefore, Australia’s Thunderbird zircon mine financial support is tightly linked to lender obligations.

The venture must make repayments by 31 December to two lenders. The lenders include Northern Australia Infrastructure Facility and creditor Orion Resource Partners. Meanwhile, the partners are negotiating deferrals or credit restructures. However, the company says success is not guaranteed.

Loan packages and royalties raise pressure as zircon demand softens

The venture secured major loan facilities in 2022. NAIF opened an A$160 million facility, while Orion opened a $110 million facility. Both loans are secured against Thunderbird assets and guaranteed by the owners. As a result, any covenant stress can spill back to shareholders.

Orion’s financing includes a 1.6% royalty on sales tied to up to 8.2 million tonnes per year of ore. Meanwhile, revenue pressure rises when zircon prices weaken. Therefore, Australia’s Thunderbird zircon mine financial support aims to keep liquidity stable through a demand slump.

Ramp plans remain, but the market is forcing price and output discipline

Thunderbird’s operating metrics show scale and ramp ambition. KMS mined 10.4 million tonnes of ore and produced 740,666 tonnes of heavy mineral concentrate in FY2024–FY2025. The venture began processing in late 2023 and shipped first zircon in January 2024. It plans to ramp to 220,000–240,000 tonnes per year of zircon concentrate and 900,000–950,000 tonnes per year of ilmenite concentrate by July–September 2027.

Yansteel is also tightening offtake support for the project. It agreed to buy all unsold zircon concentrate at a fixed price. It also holds a 100% ilmenite concentrate offtake agreement. As a result, commercial backing offsets some spot market weakness.

Zircon producers are cutting export prices to China because demand is soft. Meanwhile, Iluka Resources will pause its Cataby mine for one year from 1 December. Iluka’s zircon concentrate sales fell 45% year on year in July–September. Therefore, the downturn is regional and structural, not project-specific.

The Metalnomist Commentary

Mineral sands projects can ramp volumes, but they cannot ramp demand. Meanwhile, debt timing forces hard choices when zircon prices fall. Therefore, Thunderbird’s next milestone is financial flexibility, not nameplate capacity.

Nyrstar Australian Smelters Face Uncertain Future Without New Funding

Nyrstar

Nyrstar Australian smelters face an uncertain future as the company reviews possible closures or output curtailments at its Port Pirie lead smelter and Hobart zinc smelter. The review comes after interim government rescue funding expired without a second phase being agreed.

Nyrstar Australian smelters received A$135mn in interim support in August last year. The funding was designed to keep the 160,000 t/yr Port Pirie lead smelter in South Australia and the 280,000 t/yr Hobart zinc smelter in Tasmania operating while longer-term solutions were assessed.

Nyrstar Australian smelters are strategically important because they preserve domestic processing capability for base metals and potential critical minerals. But the facilities remain economically challenged by weak commodity pricing, high energy costs and the need for capital investment.

The company, owned by Trafigura, said it is now exploring all options for the two assets. No final decision has been made on closures or production cuts.

Port Pirie and Hobart Test Australia’s Industrial Policy

The Port Pirie and Hobart smelters sit at the centre of Australia’s debate over whether strategic processing capacity should be preserved through public support. Both assets are partway through two-year feasibility studies to diversify output into critical minerals such as bismuth and tellurium.

This diversification is important because traditional lead and zinc smelting margins have been under pressure. Adding critical minerals could improve the strategic value of the facilities and create new revenue streams.

Port Pirie has already started moving in that direction. The first shipment of antimony from a pilot plant was exported in February under the first-phase funding agreement.

Nyrstar said the Port Pirie pilot plant could produce 2,000 t/yr of antimony by the end of this year. That would be meaningful because antimony is increasingly viewed as a strategic metal for defence, flame retardants, batteries and industrial alloys.

Hobart has already faced production cuts during weaker zinc market conditions. That history shows how exposed the site remains to zinc prices, energy costs and operating margins.

Without a second funding phase, Nyrstar may cut capital expenditure and operating costs as part of the review. That could delay diversification plans and weaken Australia’s ability to preserve downstream metal processing capacity.

Critical Minerals Could Decide Smelter Value

The future of the two smelters may depend on whether they can become more than conventional lead and zinc assets. Processing critical minerals could give them a stronger role in Australia’s industrial strategy.

Australia’s Future Made in Australia policy aims to retain industrial capability and use renewable energy to support low-carbon exports, including metals. Smelters such as Port Pirie and Hobart fit that policy direction if they can become competitive and strategically relevant.

The challenge is cost. Existing smelters need reliable power, capital upgrades and market support to compete against lower-cost global processors.

Recent government support for aluminium and copper processors shows that Canberra is willing to intervene when strategic industrial assets face closure. But each case still needs a credible long-term pathway.

For Nyrstar, that pathway may involve antimony, bismuth, tellurium and other by-product metals. These materials can improve the value of complex smelting operations if they are recovered efficiently and sold into secure supply chains.

For Australia, the decision is broader than one company. Losing smelting capacity would weaken domestic processing depth at a time when governments are trying to reduce dependence on concentrated foreign refining systems.

The Metalnomist Commentary

Nyrstar’s Australian smelter review shows that critical minerals policy must extend beyond mining into processing assets that already exist. The key question is whether Australia can turn legacy smelters into strategic by-product platforms before high energy costs force permanent closures.

Australia Mineral Exploration Spending Rises as Iron Ore and Gold Attract Capital

Iron ore

Australia mineral exploration spending increased strongly in the first quarter, supported by higher investment in iron ore and gold despite weaker spending on copper, nickel, cobalt and coal.

Australia mineral exploration spending rose by 16.3% year on year to A$949.3mn in January-March, according to Australian Bureau of Statistics data. Gold and iron ore remained the two largest categories of exploration expenditure.

Australia mineral exploration spending patterns show a widening divide between commodities. Producers are continuing to invest in iron ore reserve replacement, while weak nickel and cobalt prices are discouraging new exploration.

Iron ore exploration expenditure increased by 4.7% year on year to A$186mn. Gold exploration spending climbed much faster, rising by 53.4% to A$450.9mn.

Iron Ore Investment Stays Strong as Producers Replace Reserves

Iron ore remains one of Australia’s most important mining commodities, and continued exploration spending reflects the need to replace depleting reserves at established operations.

Australia’s Office of the Chief Economist expects domestic iron ore exploration to remain strong as major producers sustain long-term mine life and feed quality.

This is strategically important because Australia remains a major supplier to Asian steelmakers. Maintaining reserve depth is essential for preserving export volumes, mine productivity and Australia’s position in the seaborne iron ore market.

Gold recorded the largest increase in exploration spending. The 53.4% year-on-year rise to A$450.9mn suggests stronger investor appetite for projects offering exposure to high gold prices and more favourable project economics.

Silver, lead and zinc exploration also strengthened, with spending rising by 29.9%. These metals benefit from a combination of precious metal exposure and demand from industrial, infrastructure and energy applications.

Nickel, Cobalt and Coal Lose Exploration Momentum

Nickel and cobalt exploration spending fell by 42.7% year on year, reflecting persistent weakness in global nickel markets and deteriorating economics for Australian producers.

The Office of the Chief Economist expects nickel prices to remain under pressure through 2027 because of continuing global surpluses. Weak pricing has already reduced Australian mine output and discouraged investment in new resources.

Copper exploration spending also declined by 13.1%. This contrasts with copper’s stronger long-term demand outlook and shows that high development costs, permitting risk and competition for capital can still limit exploration despite positive structural demand.

Coal exploration expenditure fell by 22.7% to A$43.2mn. Policy and cost pressures are reinforcing the decline.

New South Wales stopped issuing permits for greenfield thermal coal developments in March 2026, while high royalty rates in Queensland may also be discouraging investment in coking coal exploration.

The result is a more selective Australian exploration market. Capital is flowing toward commodities with stronger pricing, established infrastructure and clearer long-term economics, while weaker or policy-constrained sectors are losing investment.

The Metalnomist Commentary

Australia’s exploration data show that capital is becoming increasingly selective even within strategic minerals. Strong iron ore and gold spending contrasts sharply with nickel and cobalt, where weak economics are overriding long-term critical minerals ambitions.

Australia's Lithium Concentrate Exports Surge in First Half of 2024

Australia's lithium concentrate (spodumene) exports saw a significant increase in the first half of 2024, reaching approximately 1.94 million metric tons. This growth was largely driven by robust demand in the second quarter, particularly from South Korea and Indonesia, as they began to ramp up their imports of Australian lithium supplies.

From April to June, exports surged by 49% year-over-year to 1.26 million tons, contributing to a 9.9% rise in total first-half shipments, according to data from the Australian Bureau of Statistics. China remained the dominant importer, accounting for nearly 95% of Australia's lithium concentrate exports, with volumes rising by 4.6% to 1.84 million tons. This surge is closely tied to China's continued growth in new energy vehicle (NEV) sales and production, which remains strong despite global concerns about slowing electric vehicle (EV) growth in other regions such as Europe and the United States.

South Korea's imports of spodumene experienced a dramatic increase, rising to 71,441 tons in the first half of the year from just 1,240 tons a year earlier. This spike follows the completion of the country's first lithium hydroxide plant late last year, which has since started production. The plant, a joint venture between Australian lithium producer Pilbara Minerals and South Korean conglomerate Posco, delivered its first lithium hydroxide order in April.

Indonesia also saw a sharp increase in spodumene imports, reaching 25,098 tons from a mere 60 tons the previous year. This growth coincides with the launch of pilot production at a lithium plant in Indonesia by Chinese lithium salts producer Chengxin Lithium, which extracts lithium from hard rock ores.

Despite these gains, the lithium market faces challenges. While most Australian lithium producers reported higher spodumene output in the second quarter—including companies like Pilbara Minerals, Mineral Resources, and Core Lithium—Core Lithium has paused its processing operations since June due to the weak lithium market conditions.

Australia's lithium concentrate exports (t)

* Source : Australian Bureau of Statistics

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.

Queensland vanadium electrolyte plant investment backs Australia’s flow battery ambitions

Queensland Vanadium Plant

Queensland vanadium electrolyte plant investment signals a stronger push into long duration energy storage in Australia. The state government has committed A$10mn to Vecco’s Julia Creek mine and Townsville vanadium electrolyte plant. As a result, the Queensland vanadium electrolyte plant investment aims to anchor a domestic supply chain from ore to vanadium redox flow batteries.

Queensland vanadium electrolyte plant investment will support Australia’s first commercial scale electrolyte facility in Townsville. Vecco plans to build a 300 MWh per year plant starting in 2026, with operations targeted for 2028. This will scale up from its existing 35 MWh per year Townsville unit, which already produces vanadium electrolyte. Therefore, Vecco can leverage operational experience as it ramps to larger industrial volumes.

Julia Creek mine links vanadium ore to battery electrolyte

The Julia Creek mine forms the resource backbone of the Queensland vanadium electrolyte plant investment. Vecco plans to open the 8,700 t per year vanadium pentoxide operation in 2027. The mine will supply feedstock directly to the larger Townsville electrolyte plant, closing the loop between mining and chemicals.

This integrated structure reduces reliance on imported vanadium intermediates and marketing risk. Meanwhile, it supports Australia’s broader critical minerals strategy focused on value added processing, not just ore exports. Over the life of the project, Vecco aims to position Julia Creek as a stable source for flow battery grade vanadium.

Queensland vanadium electrolyte plant investment also fits into a wider end to end supply chain vision. Vecco, Sumitomo Electric and Idemitsu Australia signed a 2024 agreement to develop and sell vanadium redox flow batteries. Therefore, vanadium units from Julia Creek could ultimately flow into installed energy storage systems across Australia.

Building a regional hub for vanadium redox flow batteries

Queensland is using the Queensland vanadium electrolyte plant investment to establish Townsville as a vanadium processing hub. Since 2021, the state has been developing a shared use vanadium processing facility to support smaller miners. This shared infrastructure should lower entry barriers and encourage more junior projects to progress.

At the same time, the Townsville electrolyte plant will target utility and industrial scale storage markets. Vanadium redox flow batteries offer long cycle life and deep discharge, which suit grid firming and renewable integration. However, they require secure supplies of high purity vanadium electrolyte to remain competitive with lithium ion systems.

Queensland’s support for Vecco, alongside Japanese partners, strengthens cross border industrial ties. It also diversifies vanadium production away from traditional suppliers in China, Russia and South Africa. As a result, the Queensland vanadium electrolyte plant investment could reshape regional vanadium trade and pricing dynamics over time.

The Metalnomist Commentary

This move shows how relatively modest public capital can unlock strategic value in long duration storage supply chains. By backing integrated mining and electrolyte production, Queensland improves the bankability of vanadium redox flow projects and attracts Japanese technology partners. Market participants should watch how fast offtake and project pipelines grow, as this will determine whether Townsville becomes a genuine Asia Pacific hub for vanadium battery materials.

Pilbara Minerals and Calix Restart WA Lithium Phosphate Project with Government Backing

Pilbara Minerals

Mid-Stream Plant to Strengthen Australia’s Downstream Lithium Supply Chain by Late 2025

Pilbara Minerals and Calix have resumed development of their mid-stream renewable lithium phosphate demonstration plant in Western Australia, following a major funding boost from the state government. The project, paused in October 2024 due to funding constraints, restarted after a A$15 million (US$9.4 million) grant was awarded in December.

Now 75% complete, the facility will produce 3,000 tonnes per year (t/yr) of lithium phosphate, using spodumene feedstock from Pilbara’s Pilgangoora lithium mine. Commissioning is targeted between October and December 2025, with the project serving as a key step in advancing Australia’s mid-stream lithium processing capabilities.

Strategic Incentives Set Stage for Long-Term Lithium Refining Growth

This mid-stream facility will qualify for new tax incentives, offering 10% rebates on processing and refining costs for a ten-year period starting in 2027. These incentives, legislated by Australia’s federal government, aim to increase domestic value-added production in critical minerals.

Additionally, the Western Australian government has granted two-year waivers on administrative and port fees, further lowering the project's financial barriers. These measures reflect coordinated efforts by state and federal authorities to stimulate downstream investment amid fluctuating global lithium prices.

Pilbara Expands Global Processing Footprint Amid Market Volatility

The joint venture aligns with Pilbara Minerals broader strategy to expand its downstream presence. The company already operates a lithium hydroxide plant in Gwangyang, South Korea, in partnership with POSCO, one of the world's largest steel producers.

By partnering with Calix, a leader in low-emission calcination technology, Pilbara aims to produce battery-grade lithium chemicals with lower carbon intensity. The demonstration project will not only support Australia's domestic battery supply chain but could serve as a template for future commercial-scale operations.

Severe Weather Disrupts Australian Copper and Fertilizer Logistics

Queensland Rail (QR)

Torrential rains have forced the closure of Australia's Mount Isa rail line, disrupting the transport of critical commodities like copper and phosphate. This rail line, which connects key mining sites to the Port of Townsville in Queensland, is essential for the export of goods, and the lack of a clear timeline for its reopening is creating significant logistical challenges.

Mount Isa Rail Line Severely Damaged by Torrential Rain

Queensland Rail (QR) reported on February 10 that the North Coast and Mount Isa rail lines had sustained significant damage, with 177 defects identified. The rail line is a crucial route for transporting products from mining operations, including Glencore's Mount Isa copper mine and Incitec Pivot's Phosphate Hill fertilizer plant. Without it, these mining companies face major delays in moving their products from production sites to the Port of Townsville for export and distribution across Australia.

Challenges for Incitec Pivot and Other Mining Companies

In addition to weather-related challenges, Incitec Pivot is facing other operational issues. The company recently lowered its production forecast for Phosphate Hill by 7%, expecting to produce between 740,000 and 800,000 tons for the 2025 financial year due to ongoing gas supply problems. This is further complicated by the logistical difficulties caused by the Mount Isa rail line closure. Other companies, including Centrex, also rely on the line to ship phosphate rock, amplifying the broader impact on Australia's mining sector.

Port of Townsville and Abbot Point Impacted by Weather

The Port of Abbot Point, located south of Townsville, also experienced disruptions due to wet weather, closing from January 31 to February 5. Despite large parts of Townsville being flooded, the Port of Townsville remained operational, which helped mitigate some logistical challenges during this period. However, the combined effects of rail and port disruptions continue to strain the local economy and hinder mining and fertilizer exports.

Outlook for Australia’s Mining Industry Amid Infrastructure Setbacks

As the Mount Isa rail line remains closed indefinitely, Australian mining companies, particularly in copper and fertilizer sectors, are facing continued uncertainty. With production forecasts adjusted and logistical bottlenecks in place, it is unclear when normal operations will resume, further impacting Australia's export capacity.

Australia Invests A$138.5 Million in Critical Minerals to Strengthen Domestic Supply Chains

Resource Capital Funds

In a significant move to bolster its domestic critical minerals sector, the Australian government announced a new round of investments and grants totaling A$138.5 million ($88.4 million) over the past week. This follows the recent approval of the Future Made in Australia (FMA) investment framework, aimed at diversifying the nation's critical mineral supply chains and creating jobs to meet national security, climate, and energy goals.

Key Investments to Support Domestic Mineral Production

Federal Resources Minister Madeleine King highlighted that the majority of these investments will be channeled through Resource Capital Funds (RCF), a specialist investor focused on metal extraction. RCF will invest $75 million in decarbonization projects within the critical minerals sector, marking a significant step in Australia's ongoing efforts to support cleaner, more sustainable mining operations.

Additionally, grants totaling $13.4 million were awarded to five mineral processors across the country to aid the early-stage development of rare earth, vanadium, fluorite, and graphite plants. These projects will play a pivotal role in meeting both domestic and global demand for these vital materials.

This new funding comes on top of A$303.2 million in loans that have already been provided to Iluka Resources for its Eneabba Rare Earths Refinery project. This refinery, located in Western Australia, is a key part of Australia's strategy to become a more significant player in the global rare earths market.

Strategic Alignment with Global Security and Climate Goals

Minister King emphasized the critical importance of these investments in diversifying global supply chains for materials that are crucial to clean energy, climate initiatives, and national security. Australia's growing role in the global critical minerals supply chain is reinforced by its recent FMA package, which allocated $14.3 billion to support the minerals sector, including tax incentives for production.

Australia's commitment to securing its mineral supply chain aligns closely with the goals of its international partners. Prime Minister Anthony Albanese's government has been actively fostering partnerships to ensure a stable and diversified critical mineral supply. Notably, a year into office, the Australian government signed the Climate, Critical Minerals, and Clean Energy Transformation Agreement with the US, which seeks to accelerate the diversification of clean energy supply chains and ensure stable mineral supply for both countries.

Additionally, the US has shown increasing interest in Australian critical minerals, with the US government recently supporting Australian miner Lynas in its efforts to establish a rare earth plant in the US. These moves further underscore the global strategic importance of securing a steady supply of critical minerals like rare earths, lithium, and vanadium.

Liberty Bell Bay Manganese Smelter Sale Aims to Preserve Australia’s Alloy Capacity

Liberty

Liberty Bell Bay manganese smelter assets in Tasmania are set to be sold to a consortium led by investment firm Adroit Capital, giving Australia’s only manganese alloy producer a potential path out of administration. The 290,000 t/yr smelter is a strategic asset for steelmaking, defence and construction supply chains.

Liberty Bell Bay manganese smelter operations have been under pressure since the site was shut in May 2025 by its former owner, GFG Alliance, because of feedstock shortages and maintenance requirements. The smelter produces ferro-manganese and silico-manganese, both essential alloying materials for steel production.

Liberty Bell Bay manganese smelter continuity is important because Australia has limited domestic ferro-alloy capacity. Losing the site permanently would increase dependence on imported manganese alloys for steelmakers and industrial users.

The Australian federal and Tasmanian state governments have now committed A$5mn to cover staff salaries until early August while administrator Ernst & Young finalises the sale with Adroit. That follows A$4.6mn in earlier support during April-May, bringing total recent government support to A$9.6mn.

Government Support Buys Time for a Strategic Smelter

The government funding gives the administrator more time to complete the transaction while preserving workforce continuity. This is critical because skilled labour, furnace knowledge and site readiness can be difficult to rebuild after a prolonged shutdown.

Tasmania’s government had already tried to support a restart under GFG. It provided a A$20mn bridging loan after the smelter was suspended in May 2025, helping operations resume in August.

However, GFG defaulted on that loan in January 2026, leading to the smelter entering administration. The sale process now shifts responsibility to a new investor group that must address the site’s core operating problems.

The key challenge remains feedstock security. Manganese alloy smelting depends on reliable ore supply, power costs, furnace availability and customer demand from steelmakers.

If Adroit can secure ore and stabilise operations, the smelter could again support domestic steel supply chains. If not, the asset risks remaining a strategic facility without a sustainable operating model.

Manganese Alloy Security Matters for Steelmaking

Manganese alloys are essential in steelmaking because they improve strength, toughness and deoxidation performance. Ferro-manganese and silico-manganese are widely used across construction steel, infrastructure, machinery and defence-related steel applications.

Australia’s reliance on a single domestic manganese alloy producer makes Liberty Bell Bay more important than its nameplate capacity alone suggests. The smelter represents industrial optionality in a market where supply security is becoming more politically relevant.

The sale also comes as global ferro-alloy markets face volatility from weak steel demand, feedstock constraints and trade measures. Domestic production can reduce exposure to import disruptions, but only if operating costs remain competitive.

For Tasmania, the site also carries regional employment and industrial policy importance. Keeping the workforce funded through the sale process reduces the risk of losing technical capability before a new owner takes control.

The Adroit-led consortium will need more than financial interest. It must prove that the smelter can operate with stable raw material supply, disciplined maintenance and a credible sales strategy.

The broader lesson is clear. Strategic metals capacity cannot survive on government support alone. It needs a bankable operating model that links feedstock, power, customers and long-term demand.

The Metalnomist Commentary

The Liberty Bell Bay sale is a test of whether Australia can preserve critical ferro-alloy capacity before it disappears. Manganese alloy supply may not attract the same attention as lithium or rare earths, but steelmaking security depends on assets like this.

Livium LGES battery recycling deal extends Australia’s circular battery value chain

Livium

The Livium LGES battery recycling deal is expanding Australia’s role in the circular battery economy and black mass supply. Under the renewed Livium LGES battery recycling deal, Livium will process both recalled and end-of-life residential batteries. As a result, the Livium LGES battery recycling deal now runs to 2029 and anchors new growth in Australian black mass output.

Black mass volumes rise as Livium expands feedstock

Livium will continue processing LG Energy Solution batteries recalled in Australia and now add end-of-life units from local users. This expanded access to feedstock should increase black mass volumes and stabilise plant utilisation over the medium term.

The recycler sold over 350t of black mass in the 2024-25 financial year to 30 June. Therefore, management expects higher sales in 2025-26 as the Livium LGES battery recycling deal ramps up. Livium channels this black mass to processing partners such as South Korea’s SungEel Hitech. These partners convert black mass into battery chemicals, which return to global cathode and cell producers.

Meanwhile, LGES is building a 20,000 t/yr battery recycling plant in France with Derichebourg. That European joint venture will also produce and process black mass from end-of-life batteries from 2027. Together, these initiatives show how LGES is building regional recycling hubs to secure critical materials.

Livium LGES battery recycling deal supports lithium recovery innovation

The Livium LGES battery recycling deal also complements Livium’s work on recovering lithium from spodumene waste. Livium signed an agreement with Australian producer Mineral Resources in January to optimise this extraction technology. As a result, the partners formed a joint venture in August to commercialise the process at scale.

This positions Livium not only as a black mass producer but also as a technology player in lithium recovery. For LGES, the partnership reduces long-term exposure to mined feedstock volatility and environmental scrutiny. It also aligns with automakers’ and battery producers’ ESG targets on recycling and resource efficiency.

In strategic terms, expanding the Livium LGES battery recycling deal strengthens regional supply security for nickel, cobalt and lithium units locked in black mass. It also supports Australia’s ambition to move up the value chain from raw material supplier to processing and technology hub.

The Metalnomist Commentary

This partnership illustrates how structured offtake agreements can accelerate the build-out of regional battery recycling ecosystems. For metals markets, increasing black mass flows from deals like this will gradually reshape demand for primary material and reward recyclers with robust technology and downstream access.

Australia's Liontown Meets Lithium Output Target Amid Market Challenges

Australian lithium producer Liontown Resources has achieved a significant milestone by producing its first spodumene concentrate from the Kathleen Valley project, meeting its mid-2024 goal despite earlier financial difficulties. The first shipment of spodumene concentrate is scheduled for later in the current quarter (July-September), according to an announcement on July 31.

Liontown recently secured a short-term 10-month offtake agreement with Beijing Sinomine International Trade. Additionally, long-term contracts with major auto manufacturers and battery producers such as Tesla, LG Energy Solution, and Ford are expected to commence as the Kathleen Valley project reaches full production capacity over the next year.

The Kathleen Valley project is ramping up to a capacity of 3 million tons per year, a target anticipated by the end of the first quarter of 2025. Liontown also plans to expand this capacity to 4 million tons per year. The company’s funding deal with LG Energy Solution will facilitate early works to "preserve" the expansion option with a timeline set for 2027.

This new supply of lithium from Liontown comes amid a market downturn with ongoing concerns about oversupply. Australian financial services firm Macquarie has projected a potential slowdown in the pace of Australian production growth due to unencouraging price conditions.

In a related development, US lithium producer Albemarle announced on July 31 a halt to the construction of train 3 at its Kemerton lithium conversion facility in Western Australia, citing "ongoing industry headwinds" as part of a comprehensive review of its cost and operating structure. Each train at the facility has a processing capacity of 25,000 tons per year of lithium hydroxide. Albemarle will also place train 2 into care and maintenance while focusing on increasing production from train 1.

Commenting on Albemarle’s decision, Australia’s federal resources minister Madeleine King urged bipartisan support for the country's critical minerals and rare earths industry. King also called on political opposition parties to support Australia’s critical minerals production tax incentive to bolster local industry and jobs.

Liontown Lithium Output Surges as Underground Operations Accelerate

Liontown Lithium

Australia's Liontown Resources has increased its lithium output by 12% in the first quarter of 2025, reaching 95,709 tonnes of spodumene concentrate. This marks a significant leap from the previous quarter and supports its ambitious transition to full underground mining by early 2026.

Liontown Hits Q1 Production Milestone

Liontown’s Kathleen Valley mine saw spodumene output rise from 85,698t in October–December 2024 to 95,709t in January–March 2025. This growth reflects the mine’s ramp-up phase, as it produced nothing during the same period a year ago. To meet its semiannual target of 170,000–185,000t, Liontown must deliver at least 74,291t in the current quarter.

Shipments also climbed 16% quarter-over-quarter to 93,940t. With a current stockpile of 1.3 million tonnes and 23,000t of saleable concentrate ready, Liontown is well-positioned to sustain production through its upcoming underground transition.

Strategic Stockpile Supports Transition to Underground Mining

Underground development at Kathleen Valley remains ahead of schedule by 160 meters. By the end of March, Liontown had completed 1,849 meters of underground development. The first underground ore was extracted on 9 April 2024, with initial concentrate output recorded on 31 July 2024.

Liontown plans to draw down 500,000t of ore from its stockpile in Q2 2025 and an additional 100,000t in the second half of the year. This strategy ensures uninterrupted production as the company targets full underground operations by January–February 2026.

Market Dynamics Influence Lithium Pricing

Australia's total lithium exports jumped from 2 million tonnes in 2021 to 3.9 million tonnes in 2024, with 94.4% of that supply headed to China. Liontown CEO Tony Ottaviano noted that while demand remains robust, pricing will only recover as inventory levels normalize. However, the ongoing US-China trade tensions are limiting demand growth and suppressing prices.

The Metalnomist Commentary

Liontown’s rapid ramp-up in lithium output highlights Australia's growing dominance in the global battery supply chain. However, geopolitical tensions and inventory overhang continue to weigh on market pricing, posing a challenge to near-term profitability despite operational momentum.

Lynas Opens Australia’s First Fully Commissioned Rare Earths Facility in Kalgoorlie

Lynas Rare Earths

Australian rare earths producer Lynas Rare Earths has officially inaugurated the nation’s first fully commissioned rare earths processing plant in Kalgoorlie. This milestone marks a significant step forward in bolstering Australia’s rare earths production capabilities.

The A$800 million ($530 million) facility aims to process mixed rare earth carbonate sufficient to produce 9,000 t/yr of neodymium-praseodymium (NdPr), a vital material for rare earth magnets used in electric vehicles (EVs) and other advanced technologies. Currently, the processed rare earth carbonate is shipped to Lynas' Malaysian facility and is also expected to supply its planned facility in the United States.

Boosting NdPr Output and Expanding Operations

In Q3 2024, Lynas reported a production of 1,677t of NdPr oxide at its Malaysian plant, up from 1,504t in Q2 and 1,526t in Q3 2023. The Kalgoorlie facility is anticipated to further increase Lynas’ NdPr supply to meet growing global demand.

The Malaysian facility, meanwhile, is undergoing a major expansion. It is projected to commence production of dysprosium and terbium—critical materials for high-performance permanent magnets—by 2025. Additionally, the site’s reconfigured circuits will have the capability to separate up to 1,500 t/yr of mixed heavy rare earth compounds.

Global Implications of Lynas’ Expansion

As a leading producer of rare earths outside China, Lynas plays a key role in diversifying global supply chains for critical minerals. The Kalgoorlie facility enhances Australia's position as a reliable source of rare earth materials while supporting the development of advanced technologies such as EVs and renewable energy solutions.