The Australian government has just released a A$243 million (US$155 million) plan to bolster Australia’s status as a major player in the rare earths market. Climate and Energy Minister Chris Bowen made the announcement on a Thursday, but it was foreshadowed in March by Prime Minister Anthony Albanese. Specifically, it establishes a 1.2 billion Australian dollar (approximately 760 million USD) strategic reserve to purchase, own, stockpile, and sell critical minerals produced in Australia. This reserve has long been recognized as a critical national treasure. It intends to deepen economic statecraft, uphold and advance Australia’s interests and the country’s allies.
Australia is one of the major producers of rare earths in the world. These salts are critical to most emerging technologies and every national green energy plan. The third pillar of the government’s strategy is direct market intervention, such as purchasing rare earths produced in the U.S. Through ownership of these minerals, the government aims to guarantee a stable supply for domestic use and international allies.
The plan further highlights the need for stockpiling rare earths. This new stockpile will serve as a new buffer against market volatility. Furthermore, it will improve our national security by reducing our reliance on other countries. Through its ownership of Lynas, the government wields significant influence over rare earth production in Australia. This strategy is very deliberate in further cementing its foothold in this key sector.
Countries around the world are engaged in a race to reduce their dependence on foreign supply chains for critical minerals. This announcement comes at an opportune time for those efforts. The Australian government has stated its commitment to developing a rare earths supply chain domestically, understanding their importance to various industries from electronics, renewables to defense. Therefore, by building a strong reserve, Australia aims to be more economically resilient while being able to respond better to global demands.
Just last month, one such worker in Australia grabbed a fistful of rare-earth concentrate that had been left to dry in the sun. This is the perfect moment to do so and highlight the local production efforts that are key to the initiative. Once the vaccine concentrate is produced, it is packed and prepared for distribution, highlighting the federal government’s commitment to expanding local production capacity.
This strategic reserve will significantly increase the overall domestic supply and in turn, strengthens Australia’s strategic position. It decreases our allies’ reliance on these critical minerals that are essential to their advanced technology and defense sectors. Australia has made great strides to further stabilize the growing rare earths market. In doing so, it hopes to better cement its status as the global supply chain’s most important hub.