In Part 1 of this series on Unlocking Clean Energy: The Crucial Role of Rare Earth Minerals, we introduced the uses of rare earth minerals in renewable energy technologies and how rare earth minerals contribute to the clean energy transition. We also touched on the main challenges facing the industry.
In Part 2, we delve into our domestic Critical Minerals Strategy and funding, and the international partnerships put in place to respond to those challenges.
Recent Announcements
Australia’s Critical Mineral Strategy: Paving the Way for Clean Energy
Australia is endowed with a rich abundance of natural resources and has a strong track record as a global heavy weight in the mining and resources industries. Australia stands to benefit from the renewable energy transition, as clean energy technologies require vast amounts of processed rare earth minerals.
The Department of Industry, Science and Resources, realising the potential benefits of the changing energy landscape, released its Critical Minerals Strategy in late 2022, which outlines a comprehensive vision to enhance Australia’s rare earth minerals sector.
A recent manifestation of the Critical Minerals Strategy is the Government’s funding of Australia’s first combined rare earth minerals mine and refinery in the Northern Territory. On 14 March 2024 the Federal Government committed to providing an AUD $840 million funding package to help deliver the Nolans Rare Earths Project, 135 km north of Alice Springs.1 The funding includes AUD $495 million from the Federal Government’s Critical Minerals Facility and is one of the latest rounds of funding for projects which aim to diversify Australia’s rare earth minerals supply chain in a sustainable manner. For examples of other similar historical projects, refer to our previous article.
The Federal Government’s contribution will also assist in creating over 300 new jobs and support economic development in the Northern Territory by facilitating further investment in the Nolans Rare Earths Project from other economies, international financiers and commercial banks. It is poised to unlock Australia’s ability to function as a major global supplier of the rare earth minerals required to decarbonise the global economy.
International Coordination: Accelerating Progress
As well as domestic investment, the Government has developed international partnerships to accelerate the rare earth minerals industry. In our previous article, we outlined how Australia and the United States jointly announced the Climate, Critical Minerals, and Clean Energy Transformation Compact (Compact). Since then, the U.S. and Australia held the inaugural meeting of the Australia-U.S. Taskforce on Critical Minerals (Taskforce) in October 2023. The Taskforce is now actively engaged in a multifaceted approach to enhance the rare earth minerals sector by, among other initiatives:2
- boosting investment in mining and processing projects;
- supporting sustainable mining and mineral recovery technologies;
- collaborating in mapping mining production capacities;
- aligning Environmental, Social, and Governance (ESG) standards;
- sharing information to help both countries shape local priorities and support investment;
- enhancing traceability and provenance of minerals practices; and
- addressing market dynamics.
At the same time, the U.S. and Australia have also announced their commitment to building diversified supply chains and high-quality mining projects for rare earth minerals through collaborative finance projects, private-public sector partnerships, and supporting strategic rare earth mineral projects internationally in collaboration with other governments and the European Union.
In Part 1 of this series, we noted that ensuring supply chains meet ESG standards is one of the paramount challenges facing the rare earth minerals industry. Encouragingly, the Government’s recent strategic and policy focus on rare earth minerals strengthens and protects domestic sector business operators and demonstrates a commitment to sustainable rare earth mineral projects. Outcomes from the policies including supporting sustainable technologies, aligning ESG standards and enhancing traceability will assist in creating responsible rare earth mineral supply chains. Further, they promote international collaboration and innovation with other countries, most notably with the U.S., to achieve responsible supply chain solutions.
The Path Forward: What Comes Next
Investment in International & Domestic Strategies
Australia’s global-leading position as a producer and exporter of rare earth minerals and energy production means it is in a prime position to take advantage of the renewable energy transition. While other heavy weights of the rare earth minerals industry including China will undoubtedly place pressure on Australia’s domestic rare earth minerals market through competitive pricing and other behaviours such as trade restrictions, investment by the Government in relationships such as the Taskforce and the Compact will position Australia competitively.
The key to this will be the security and sustainability of supply chains. Recognised as a matter of importance, the Government has recently announced that applications for grants under a $40 million international partnerships program to build end-to-end rare earth mineral supply chains are now open until 2026.3 Applications for the grants may include:
- pilot and demonstration plants, capacity expansions, and research and development activities;
- development or commercialisation of technology and intellectual property;
- rare earth minerals processing technologies; and
- development of downstream processing capability.
Not only do the grants strengthen Australia’s international engagement with other global partners such as the U.S., United Kingdom and others, but they also support the Critical Minerals Strategy. This initiative and others like it aim to build Australia’s sovereign capability in rare earth mineral processing, diversify global supply chains, and help Australia become a clean energy superpower.
For more information, please contact Matt Baumgurtel and David O’Carroll.
1Prime Minister of Australia, Major critical minerals funding unlocks Northern Territory jobs and positions Australia as renewable energy superpower, <https://www.pm.gov.au/media/major-critical-minerals-funding-unlocks-northern-territory-jobs-and-positions-australia>.
2The White House, Fact Sheet: Delivering on the Next Generation of Innovation and Partnership with Australia, <https://www.whitehouse.gov/briefing-room/statements-releases/2023/10/25/fact-sheet-delivering-on-the-next-generation-of-innovation-and-partnership-with-australia/>.
3The Hon Madeleine King MP, Grants to Strengthen International Critical Minerals Partnerships, <https://www.minister.industry.gov.au/ministers/king/media-releases/grants-strengthen-international-critical-minerals-partnerships>.
