Is a Critical Minerals Strategic Reserve the best approach?

The MCA always welcomes investment into the critical minerals sector that helps unlock Australia’s potential in supplying the world with the raw materials required for clean energy and defence.

Australia has what the world needs in abundance, and our companies are already providing critical minerals directly into international markets, including the US, South Korea and Japan.

But whether a Critical Minerals Strategic Reserve is the best approach remains to be seen.

While we acknowledge that a reserve may increase Australia’s chances of limiting the impact of US tariffs, this initiative is certainly not without domestic risk and may impact the commercial viability of operations through continued downward pressure on commodity prices.

The objective and merits of a Critical Minerals Strategic Reserve remain unclear, and this initiative must be evaluated against other opportunities to leverage our mining industry.

These include support for projects that deliver regional development and jobs, and committing to the Junior Minerals Exploration Incentive would support about $725 million of much needed greenfield exploration expenditure over the next 10 years.

We must focus on the fundamentals that will give Australia back the edge over other mining nations. That means lower energy prices, a windback of draconian industrial relations laws, and faster environmental approval times.

These changes would make it easier for companies to invest in Australia, without the need for taxpayer-funded incentives and government intervention in markets.

There’s no doubt the global mining and processing supply chain is under pressure. China continues to aggressively expand its capacity in critical mineral processing – including nickel, lithium, and rare earths – and dominate the value chain.

At the same time, escalating costs in Australia are eroding our competitiveness, pushing potential investment offshore just when we should be capitalising on global demand.

Australia’s real advantage lies in securing end-to-end supply chains, building strategic partnerships with like-minded countries, and connecting Australian mines to international manufacturers.

That means co-investing with trusted allies to build technical capability at every stage: from raw materials and concentrates to oxides, metals, and final products.

Security of supply is essential, but it’s required at the end of the supply chain, not just at the beginning. That’s why Japan and Korea are already working with Australian miners to lock in long-term commercial contracts.

We look forward to working with the next government to understand how such initiatives could fit within a broader, market-driven approach to securing reliable and resilient technology supply chains for our key global partners.