Source : the age
Australia will spend $1.2 billion establishing a national stockpile of coveted minerals needed in products as diverse as electric batteries, computers and military equipment as it seeks to help break China’s stranglehold over global supplies.
Prime Minister Anthony Albanese on Wednesday announced a critical minerals strategic reserve to purchase and hold minerals like lithium, rare earths, nickel, cobalt and graphite via special agreements with local producers.
Anthony Albanese campaigning in Western Australia on Wednesday.Credit: Alex Ellinghausen
Australia has some of the biggest known reserves of many critical minerals, which will be needed in vastly greater quantities in the coming decades to power the modern world, build millions of electric vehicles and develop more renewable energy infrastructure to combat global warming.
However, China’s dominance over global supplies and the processing capacity needed to turn critical minerals and rare earth elements into usable products has become a cause of intensifying concern in the United States and other countries after Donald Trump’s trade war prompted Beijing to restrict shipments of the materials.
China, which controls more than 80 per cent of global rare earth supplies and processes more than 95 per cent of the world’s rare earth ore, has made similar moves before, including against Japan in 2010 during a territorial dispute.
The US has been looking for ways to lessen its reliance on China’s critical minerals supplies. Trump has recently eyed deals with Greenland and Ukraine to secure supplies because China has a stranglehold on global critical minerals production and processing. Australian officals attempted to use the nation’s rich critical minerals supply as a sweetener to gain an exemption from Trump’s tariffs earlier this year.
Under the Albanese government’s proposal for a strategic reserve, Australia will hold reserves of minerals to either process them locally or to sell them to other nations like Japan, the US or Germany that are developing their own expanding capacity in the future.
Albanese said his government would “leverage our natural resources in our national interest”.
“It will mean we can deal with trade and market disruptions from a position of strength. Because Australia will be able to call on an internationally significant quantity of resources in global demand,” he said.
While Australia is a major supplier of raw critical minerals, almost all of it is shipped thousands of kilometres for processing and turned into higher-value products like battery cells in China and other Asian countries. There are presently only two Australian processing facilities for lithium – the key ingredient in lithium-ion batteries – and one for rare earths.
Labor has estimated it will hand out $7 billion in tax credits under other programs to boost local processing, on top of the $4 billion it is offering in cheap loans to companies to develop mines and processing plants.
The Coalition has vowed to scrap the production tax credits for critical minerals processing, which it labelled “billions for billionaires”.
Resources Minister Madeleine King said critical minerals are essential for “our security and the security of our key partners”.
“The strategic reserve, combined with production tax credits and the expansion of the critical minerals facility, shows the Albanese government is taking the development of an Australian critical minerals industry seriously.”
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