Legal development

Australian Government announces 2022 Critical Minerals Strategy

Insight Hero Image

    What you need to know

    • On 16 March 2022, the Government released the 2022 Critical Minerals Strategy, developing on its first strategy published in 2019.
    • The updated strategy aims to make Australia a global critical minerals powerhouse by 2030 by achieving stable supply, sovereign capability and regional jobs and growth.
    • The inclusion of two new minerals – high-purity alumina and silicon – to Australia's critical minerals list.
    • The updated strategy does not affect the $2 billion Critical Minerals Facility, which will remain in place to provide loans to the sector.
    • The critical elements of the strategy are: 
      • Renewed focus on downstream refining, manufacturing and battery integration and services capabilities.
      • $200 million commitment to the Critical Minerals Accelerator Initiative.
      • $50 million to establish a virtual Critical Minerals Research and Development Centre.
      • Establishing strategic international critical minerals partnerships.
      • Working with states and territories to establish regional hubs.
    • The strategy addresses the fast technological development in resourcing critical minerals in the defence, aerospace, automotive, renewable energy, telecommunications and agritech industries.

    What you need to do

    • Become familiar with the new strategy and note the expanded investment in non-traditional Australian resource commodities.
    • Understand the opportunities to grow with the global demand for critical minerals (eg opportunities in relation to downstream processing).
    • Consider eligibility for government funding initiatives announced to support the sector.

    The opportunity to invest

    The growing global demand for critical minerals is an exciting opportunity for the mining sector to work with the energy, transport, aerospace, defence, material, automotive and telecommunications sectors to expand their business and secure investment.

    The Australian government's 2022 Critical Minerals Strategy encourages stakeholders to ensure the continued growth of the resources sector through investing in the critical minerals sector.

    The strategy recognises that "Australia needs to build its capabilities in downstream refining, manufacturing, and battery integration and services".

    The next steps

    The Australian government recognises the challenges associated with supply chains for critical minerals, particularly relating to:

    • Competitive international markets with lower labour and environmental standards.
    • Long-term sustainability of the critical minerals industry.
    • Production, processing and refining barriers.

    In response to the challenges, the Australian government proposes to make Australia a global critical minerals powerhouse by 2030 by de-risking projects, creating an enabling environment and strengthening international partnerships.

    De-risking projects

    The 2022 Critical Minerals Strategy has put forward numerous initiatives to de-risk projects to decrease volatility and boost private investment.

    Government investmentThe Government commits to bringing projects to the market earlier, supporting projects to secure offtake agreements and giving investors confidence to achieve.
    Critical Minerals FacilityEstablished in 2021, the Critical Minerals Facility is tasked with helping projects aligned with the strategy to hit the ground running despite a hole in private finance.
    Critical Minerals Accelerator Initiative

    The Critical Minerals Accelerator Initiative supports early and mid-stage projects to overcome technical and market barriers by:

    • supporting feasibility studies,
    • engineering design work,
    • pilot testing, and
    • building demonstration plants to help proponents prove the quality of their product and secure contracts with customers.
    Modern Manufacturing Initiative 

    The Modern Manufacturing Initiative supports mid-stage critical minerals projects by helping them pilot, demonstrate or scale up the techniques and processes they need to achieve commercial close. Some projects supported by the Modern Manufacturing Initiative include:

    • $119.6 million to develop a nickel and cobalt battery material refinery.
    • $119.6 million to develop a nickel and cobalt battery material refinery.
    • $45 million to construct a high-purity alumina production facility.
    • $14.8 million to commercialise an improved process for producing rare-earth carbonate.
    • $6 million to help build a pilot processing facility to produce battery-grade lithium hydroxide
    Attracting investmentThe Australian government's lead trade and investment agency, Austrade, supports the critical mineral sector by delivering services to Australian critical mineral companies, including client engagement programs, targeted trade missions and connecting companies with trade partners and markets.

    Creating an enabling environment

    The strategy commits to positively influencing the critical minerals sector by:

    • Establishing the virtual National Critical Minerals Research and Development Centre to bring together experts to benefit the whole sector.
    • Implementing regional critical minerals hubs and precincts to streamline regulatory approvals, minimise project costs and create efficiencies.
    • Developing national environmental, social and governance standards for critical minerals through an ethical certificate scheme.
    • Working with international trade partners to form international standards for the critical minerals industry.

    Strengthening international partnerships

    The Australian government recognises the need to secure strategic international relationships to promote Australia's critical minerals sector. The strategy the following five initiatives to strengthen international partnerships:

    • Collaborate with the United States, the United Kingdom, India, the Republic of Korea and EU member states in international critical minerals working groups.
    • Strengthen Australia's relationship with regional partners through the Global Resources Strategy.
    • Attract foreign investment in greenfield and junior projects to develop, promote and strengthen the critical minerals sector.
    • Build bilateral partnerships to improve investor confidence and encourage private partnerships to grow quickly.
    • Create international supply chains to solidify more diversified and secure critical minerals supply chains.

    Click here to access a full copy of the 2022 Critical Minerals Strategy.

    Authors: Ratha Nabanidham, Partner; Wyatt Cook-Revell, Graduate