Insight - Australia: A reliable supplier of critical minerals

The demand for critical minerals from industries such as aerospace, agtech, automotive (particularly electric vehicles), defence, renewable energy and telecommunications is skyrocketing.

However, the critical minerals supply chain is highly concentrated and in many cases comes with significant environmental, social and governance (ESG) risk. Companies from these future-focused industries must act now to secure reliable supply chains to drive long term growth.

Australia has many critical minerals projects ready for investment and off-take, detailed in the Australian Critical Minerals Prospectus 2020. This insight highlights why Australia is well positioned to be your supplier of choice for critical minerals.

The need to diversify supply chains

Demand for critical minerals is increasing as both companies and governments enact ambitious plans that require large inputs of these commodities.

In the US, the Biden Administration has signalled that it intends to develop renewable energy facilities, smart grids and a powerful electric vehicle industry. It has already signed an Executive Order to procure a zero-emission government vehicle fleet – around 645,000 vehicles. This will drive demand for more battery minerals such as cobalt, lithium and manganese.

It’s the same story in the private sector. To meet its 2030 target of building 20 million cars a year, Tesla alone would need over 50% of the world’s 2019 supply of cobalt, and 95% of the world’s 2019 supply of graphite. 

This increased demand is putting intense pressure on current critical mineral supply chains, which are highly concentrated and often associated with ESG risks.  

The COVID-19 pandemic has further exposed vulnerabilities associated with concentrated supply chains and many countries are now seeking to address this exposure.

Large reserves from a stable, reliable supplier

Australia is a proven resources supplier with huge geological potential in a range of critical minerals.

Australia’s world ranking for select critical minerals

 

Reserves

Production

Antimony 4 4
Cobalt 2 3
Lithium 2 1
Manganese ore 5 3
Niobium 3 n/a
Rare earths 6 2
Tantalum 1 7
Tungsten 2 n/a
Vanadium 3 n/a
Zirconium 1 1

Source: Geoscience Australia, 2019, Australia’s Identified Mineral Resources

Australia’s rare-earth element production includes neodymium, praseodymium and dysprosium, which are important for permanent magnet production. Australia has the world’s sixth largest rare-earth elements resource base and is one of the few sources of dysprosium outside of China.

Leading environmental management practices

With a large mining industry and robust regulation, Australia has developed world-leading environmental management practices that underpin sustainability and corporate responsibility.

This depth of experience and expertise has shaped Australia’s competitive advantages as a global supplier of choice for key, ethically sourced critical minerals.

Lynas is an example of a successful integrated Australian company developing alternative supply chains, including building a light rare-earth separation plant in the US.

Ready for business

Australia also offers a large, experienced resources workforce and leadership in mining equipment, technology and services.

Our well-developed transport and logistics infrastructure expedites the movement and shipping of minerals to destinations worldwide.

In addition, Australia’s transparent legal and regulatory frameworks and attractive investment settings make it relatively straightforward to set up operations.

The Australian Government has established the Critical Minerals Facilitation Office to attract and enable investment in Australia’s critical minerals industry.

Investment-ready projects

With demand forecast to rise over the medium term, there is a significant commercial opportunity to leverage Australia’s geological potential to secure your supply of critical minerals.

The Australian Critical Minerals Prospectus 2020 showcases more than 100 investment-ready projects across 24 critical minerals, including rare earths. There are detailed summaries on over 40 advanced projects.

Watch a video on Australia’s critical minerals industry.

For more information on Australia’s critical minerals industry, please contact an Austrade Investment Specialist in your market.