Taxpayers have acquired shares in two pre-revenue mineral exploration companies, signalling a shift towards higher-risk strategies by the government to strengthen the local critical minerals industry. This move highlights growing concerns over the global supply chain of critical minerals and the need to secure domestic resources. Australia, along with the United States, is actively seeking to reduce reliance on foreign sources, particularly China, for these essential materials.
The push to challenge China’s dominance in the global supply of critical minerals initially involved concessional loans from both Australian and US governments. One notable example is the $1.6 billion loan granted to Iluka Resources. Iluka Resources is focused on developing critical minerals projects. The company is constructing Australia’s first domestic rare earths refinery, aiming to establish a local processing capability and reduce dependence on international supply chains.
These investments reflect a broader government strategy to support the development of a robust and self-sufficient critical minerals sector in Australia. By investing in early-stage mineral exploration companies, the government aims to stimulate innovation and discovery, ultimately securing a more stable and reliable supply of critical minerals for domestic industries and export markets. This approach underscores the increasing importance of critical minerals in the global economy and the strategic imperative to ensure their availability.
The investments signal that governments are willing to take on increased risks to develop domestic critical mineral resources. The goal is to ensure a stable supply chain and reduce reliance on other nations.
