Australia's Critical Minerals Strategy 2023-2030

By Igor Bogdanich, Bryn Hardcastle, David Donnelly, Kate Axup, Katherine Manderson
Climate Change Critical Minerals Dealmakers & Investors Mining

Key Features, unanswered questions and areas of focus 10 min read

Critical minerals are crucial to the energy transition and are required to be mined in historically unprecedent quantities, as a matter of urgency, to facilitate a clean energy future. The Federal Government has now published its long awaited Critical Minerals Strategy 2023-2030 (the Strategy), setting out its plans to grow Australia's critical minerals industry and maximise the 'unmissable' opportunity presented by Australia's endowment of critical minerals.1

The Strategy was developed through industry and community consultation on the Government's critical minerals discussion paper published in December 2022 (see our earlier Insight for more information on the discussion paper). The Strategy provides a six-point framework which will underpin the Government's approach to decision-making in relation to the critical minerals industry, helping it to achieve its ambition of becoming a 'clean energy superpower'.2

Despite its important role in informing Government policy and spending decisions, we expect that the critical minerals sector will be disappointed by the Strategy's absence of concrete and targeted policy initiatives and material financial support for critical minerals projects.

In this Insight, we outline the key features of the Strategy, identify questions yet to be answered and focus on several of its key aspects.

Key takeaways

  • Other than in certain respects (eg the ring fencing $500m of NAIF funding to be dedicated to critical minerals projects), the Strategy is high level in nature, and does not identify exact actions to be taken, but rather outlines the government's objectives and framework for future decision making.
  • Many of the themes which are touched on in the Strategy are themes common to the broader energy transition, such as the magnitude of the task, the need for speed, the role of private sector investment, the importance of supply chains, skilled labour shortages and social licence issues.
  • In spite of the stated urgency to advance Australia's critical minerals sector and the economic and security opportunities it affords, the Strategy does not provide for additional material government financial investment or tax incentives for mining or downstream developments. Instead, there are numerous references to the Australian Government needing to take 'a concerted, targeted and proportionate approach'. This is possibly a gentle reminder to readers that a true response to initiatives taken by other (larger) countries, such as the US Inflation Reduction Act, is not on the cards.
  • In the Strategy, the Government appears to focus on foreign investment from likeminded nations as an action item. We expect that industry will consider that the Strategy's reliance on foreign investors to fill the funding gaps poses the risk of Australia losing investment to jurisdictions offering material assistance packages to ensure security of their critical mineral supply.

Background: Australia's enviable position

Australia has some of the world's largest recoverable resources of critical minerals including cobalt, lithium, manganese, rare earth elements, tungsten and vanadium,3 making it well-placed to service global demand for minerals used in the technologies required to facilitate the clean energy transition.

The Government recognises the need to act quickly to secure Australia's move up the global value chain and position Australia as a key supporter of the global shift towards a clean energy future, particularly in light of 'fierce' global competition. The Strategy cites recent findings by the International Energy Agency which suggest that the world will need around '50 new lithium mines, 60 new nickel mines and 17 new cobalt mines to meet carbon emissions goals by 2030.'4

Overview of the Strategy

The stated purpose of the Strategy is to guide the Government's future policy decisions and help with prioritising the work required to achieve their stated aims, namely to:

  • deliver diverse, resilient and sustainable supply chains;
  • meet net zero ambitions;
  • maximise the economic opportunity presented by Australia's significant critical minerals endowment; and
  • maintain and grow Australia's sovereign capability.

The Strategy identifies six areas of focus, summarised below. Within these key focus areas, the Strategy is further broken down to describe why action is needed, what the Government is already doing and the 'key actions' the Government proposes to take within each focus area.

Developing strategically important projects

Summary: provide 'targeted, proportionate' support to de-risk strategically important critical minerals projects, attract private finance and ensure Australian processing and manufacturing projects can access Australian feedstock minerals.

Key action(s): the Government will ask the Northern Australia Infrastructure Facility (NAIF) to earmark $500 million to support critical minerals projects which align with the Strategy. These funds are additional to the Government's election promise to establish a National Reconstruction Fund which already includes $1 billion for value-added resources projects and $3 billion for renewables and low-emissions technologies.

Attracting investment and building international partnerships

Summary: encourage investment from and collaboration with likeminded partners to grow Australia's downstream processing capability and build diverse, resilient and sustainable global supply chains.

Key actions(s): attract investment from 'likeminded' countries and global companies, and track and monitor foreign investment in Australian critical minerals projects to ensure it is not counter to Australia's national interest

First Nations engagement and benefit sharing

Summary: engage and collaborate with First Nationals communities to promote benefit sharing and support targets and outcomes under the National Agreement on Closing the Gap.

Key action(s): consider ways to facilitate meaningful engagement between First Nations communities and critical minerals proponents.

We consider that industry would expect meaningful engagement to be a key area of focus already, and part of the general social licence to operate across all minerals. It does not appear to be a measure particularly bespoke to critical minerals.

Promoting Australia as a world leader in ESG performance

Summary: Balance industry calls to reduce the duplication, risk and uncertainty of environmental and planning approvals against the strategic advantage of maintaining best practice ESG credentials.

Key action(s):

  • Work with state counterparts to implement a streamlined permitting and environmental approvals process as part of the broader review of the Environment Protection and Biodiversity Conservation Act (Cth), already underway.
  • Use national science agencies and research and development initiatives to further reduce the sector's environmental footprint by adopting renewable fuel, reducing energy requirements and progressing the critical minerals sector towards a circular economy eg, through recycling and reprocessing materials.

We agree that industry must address the tension between accelerated mining approvals (and more mines) and achieving excellence in ESG.

Unlocking investment in enabling infrastructure and services

Summary: reduce costs, lower project risk and attract large-scale investment through strategic planning of enabling infrastructure and services, linking the critical minerals sector to domestic and global markets.

Key action(s): work with industry, the community and state and territory governments to identify infrastructure projects that could develop or expand industrial hubs and unlock investment at scale.

Growing a skilled workforce

Summary: growing a skilled and diverse workforce to enable the development of Australia's critical minerals sector, with a particular focus on building downstream processing expertise.

Key action(s): work with industry, state and territory governments and the Jobs and Skills Councils to address industry shortcomings and develop well-paying, inclusive jobs that attract and retain a diverse and skilled workforce.

Deep dive into the Strategy

Can Australia compete in a post-Inflation Reduction Act universe?

The Strategy notes that the US Inflation Reduction Act rebalances the global flow of investment, and that legislation in the United States, European Union and Japan incentivises local and regional supply chains through tax credits, government investment, regulation and project facilitation.

The Strategy does not contain proposals to improve tax settings or provide for significant new government investment. This is despite the Strategy's emphasis on the development of Australia's downstream processing capability as a key priority. It notes that the Government wants to engage in 'targeted, proportionate' industry support, which we read as the Government signalling that it cannot complete with other nations' contributions and incentives, and will rely on other nations and investors doing the 'heavy lifting' to fill the funding gaps. This is also borne out by the Government's focus on encouraging international investment (which is discussed further below).

We consider that this is a risk-laden approach given other jurisdictions appear to be doing significantly more to position themselves as attractive investment destinations.

The $500m ring-fenced for critical minerals from NAIF can be contrasted to the 2023-2024 Commonwealth defence budget of approximately $52bn.5

We expect that industry participants were hoping for material support measures such as tax incentives, asset write-offs, the extension of low-cost loan programs and implementation of fast-tracked approvals processes. Some industry participants have even suggested that there should be a 'domestic reservation policy' so that some proportion of critical minerals are retained within Australia and 'dedicated' to onshore processing to, in effect, support the establishment of a local downstream processing business.

In our view, the Government's plans to support downstream processing, and for unlocking investment in enabling infrastructure and services, could be more ambitious.

In addition, the key actions in relation to enabling infrastructure and services appear to be very high level statements of intent – broadly to 'work with industry, the community and state and territory Governments to identify infrastructure projects that could develop or expand industrial hubs and unlock investment at scale'. Naturally, this 'working with' may bring results and outcomes but in what time frames and with what certainty?

In our view, the Government's plans to support downstream processing, and for unlocking investment in enabling infrastructure and services, could be more ambitious, even recognising that other nations have significantly larger balance sheets to draw on. When nations are faced with unprecedented circumstances, governments do step in, as can be seen with pandemics and geopolitical threats. A single 3MW wind turbine requires 300 tonnes of steel, 5 tonnes of copper, 3 tonnes of aluminium and 2 tonnes of rare earths.6 Scaled up, the demand for critical minerals, to enable the energy transition, is unprecedented in Australia and globally. The risk to our economy, environment and livelihoods of a failed Australian energy transition and a missed opportunity to further develop a critical minerals sector is potentially no different, and the Government has good reasons to step in to facilitate change at speed and scale.

There is scope for the Government to be visionary and draw on Australia's natural competitive advantages. Doing so would play well in terms of jobs, regional equity and economic diversification that are the stated objectives of the Strategy and among its six key areas of focus.

Australia's competitive advantage lies in:

  • significant endowment of critical minerals resources;
  • access and proximity to markets;
  • geopolitical and supply chain certainty;
  • world-leading mining capability;
  • rule of law and labour regulation advantages; and
  • strong ESG credentials.

If the infrastructure were fully supported and ultimately developed, the payoff will be in moving up the value chain and, in turn, creating 'good jobs' to support the regions and 'fair wages' for those communities. It may be a case of a 'build it and they will come' scenario.

Attracting international investment and likeminded partners

In our Insight from earlier this year, we flagged that the then-forthcoming Strategy may bring adjustments to the Foreign Investment Review Board's (FIRB) regulation of foreign investment in critical minerals. The Strategy does not contemplate changes to the FIRB regime, and instead focusses on initiatives to encourage investment from 'likeminded' partners. The United States, United Kingdom, Japan, Korea, India and the European Union and its member states are implied to be 'likeminded' partners. Canada is not expressly mentioned within this list, but Australia's 'scientific partnership' with the Geological Survey of Canada is noted at Appendix A (International Partnerships).

India, the United States and Japan were also identified in the Defence Strategic Review released in April 2023 as 'selected' international alliances which should be engaged to develop Australia's skilled workforce. This overlap may indicate which international partnerships the Government considers to be a strategic priority.

The Strategy makes reference to the 2023-24 Budget which includes a $2.2 million investment over four years for the Treasury to develop more sophisticated ways to track foreign investment patterns in Australia's critical minerals sector.

Investors and industry participants should expect increased scrutiny of both proposed transactions yet to be approved by FIRB and foreign investments already made in the critical minerals sector.

How will the Government select which projects to prioritise?

The Strategy flags that Government support will be prioritised for minerals that are used in priority technologies. Priority technologies for critical minerals are identified by their:

  • overall contributions to emissions reductions, or Australia's security, energy and industrial priorities;
  • technology readiness;
  • contribution to Australia's long-term comparative advantage and national interest; and
  • capacity to underpin Australia's strategic partnerships.

Initial priority technologies for critical minerals are stated to include, but are not limited to:

  • batteries and battery components;
  • rare earth permanent magnets;
  • catalysts for hydrogen production;
  • semiconductors for micro-chips and solar PV;
  • defence technologies; and
  • high-performance alloys and metals (eg, magnesium, silicon, tungsten and titanium).

The Government proposes to analyse the value chain for each priority technology to identify where Australia is best positioned to capture market share. This analysis will also identify the critical mineral products and types of projects needed for these technologies.

There may be any number of projects which meet these criteria, and will require significant commercial and technical analysis. The Government may ultimately be tasked with selecting between comparably viable resource projects, guided by a Strategy that could be argued to provide limited direction as to how this choice is to be made.

Clarity on the roles of the Government departments and agencies in assessing priorities for funding support would also be welcome. The Critical Minerals Office may retain a central role, coordinating funding support which may be provided by EFA, CEFC, NAIF and the National Reconstruction Fund as well as allocation of Government grants under various programs.

What should be on the list of critical minerals?

The definition of minerals which are 'critical' to national security or the economy varies from country to country. Industry had hoped that an updated list of critical minerals would be published together with the Strategy. Instead, the Strategy states only that the Government will 'establish a process' to update the critical minerals list.

The current list includes 26 minerals, including lithium, rare earths, cobalt, graphite, manganese, silica, vanadium and bauxite (where used for alumina). Industry continues to push for minerals such as aluminium, copper, nickel, zinc and tin to be included on the list. These minerals could also be used to support decarbonisation , given their use in wind and solar farms, and their inclusion in the critical minerals list would make government assistance packages available to their producers.

The United States and Europe Union include a greater range of commodities on their lists, with the European Union even including coking coal,7 for its use in making steel which is needed in wind turbines and other processing equipment. Inconsistencies between Australia and other countries' lists result in Australian critical mineral producers missing out on opportunities offered by key trading partners and international counterparts.

Is Australia moving quickly enough?

The Strategy reinforces that the global race to secure supplies of critical minerals is rapidly accelerating, with no time frames as to by when actions need to be taken. For example, the Strategy does not contain time frames for updates to the critical minerals list, when systems will be put in place to grow a skilled workforce or accelerate project approvals, or for starting the process of encouraging offshore investment.

While the Strategy states that the Government will report on progress towards the objectives set by the Strategy in the Department of Industry, Science and Resources annual report, the Strategy itself will not be comprehensively reviewed until 2026. Given the urgency and changing nature of the technological, commercial and geopolitical landscape, we expect that industry will remain hopeful for more frequent updates to the Strategy.

What to expect next

Australia has the raw materials to meet global demand for critical minerals, the supply of which is crucial to the future of the energy transition. We expect that industry will likely call for more concrete policy and financial support to achieve the Government's critical mineral objectives. The Strategy does however provide a framework to inform the Government's priorities and future budget decisions. Time will tell whether plans to streamline key approvals, increase skilled migration, encourage foreign investment (and other such measures considered in the Strategy) will capitalise on the 'unmissable' opportunity before Australia.


  1. 'Critical Minerals Strategy 2023-2030' (June 2023), available here.

  2. 'Australia's Critical Minerals Strategy: Discussion Paper' (December 2022), available here.

  3. 'Australia's Identified Mineral Resources 2022' (2022), available here.

  4. See 'Global Supply Chains of EV Batteries' (July 2022), available here.


  6. Rio Tinto AGM, Perth Australia, 2023.