Australia has unveiled plans to buy and stockpile critical minerals from domestic producers to strengthen global supply chains, support defence capabilities, and reduce reliance on China, government officials confirmed on Monday.
Australia plans to stockpile rare-earth elements, antimony, and gallium to secure defence and advanced technology supply chains. (Source: Michael West Media)
Treasurer Jim Chalmers, Resources Minister Madeleine King, and Trade Minister Don Farrell announced that the initial focus will be on rare-earth elements, antimony, and gallium under a A$1.2 billion ($802 million) strategic reserve. The initiative aims to secure essential materials for advanced technologies and national defence, ensuring Australia maintains a central role in the global critical-minerals market.
Strategic Importance of Critical Minerals
Critical minerals have emerged as a key factor in international trade and security. Beijing’s historical dominance of the sector has allowed China to exert influence over global supply chains, including past restrictions on rare-earth exports to countries such as Japan during rising geopolitical tensions over Taiwan.
Australia’s reserve is intended to counter this influence and provide stability for both domestic and allied industries. Chalmers described the development as “another important step in Australia leading on critical minerals globally,” adding that the stockpile will help position the nation “at the centre of efforts to build stable and reliable supply chains for our international partners.”
Rare-earth elements are used to produce permanent magnets critical in technologies ranging from fighter jets to medical imaging equipment. Antimony is a key component in flame retardants, electronics, and specialist alloys, while gallium supports advanced semiconductors for radar, telecommunications, and LED technologies.
Market Response and Industry Support
Shares in Lynas Rare Earths Ltd., the world’s only major producer of separated rare-earth materials outside China, rose by 6.5% on the announcement. Larvotto Resources Ltd., which is developing one of the world’s largest antimony mines at Hillgrove in New South Wales, surged 8.8%.
Shares in Lynas Rare Earths and Larvotto Resources rose following the government’s critical-minerals stockpile announcement. (Source: australianmining)
Ron Meeks, Larvotto’s CEO, welcomed the stockpile plan, noting the company will produce 7% of the global antimony supply, with production scheduled to start in August. “The federal government is leading from the front on this, and we’re extremely happy antimony is one of the focuses,” he said.
The plan also supports a broader pipeline of critical-minerals projects valued at approximately A$13 billion, following last year’s landmark agreement between Australia and the United States to boost access to rare earths and other essential minerals. That deal aims to expand mining and processing capacity to counter China’s global dominance.
Price Stability Measures
A key objective of the reserve is to establish a floor price for critical minerals, providing protection for domestic producers against market volatility caused by surges of low-cost supply from China. The government will use purchasing agreements, contracts for difference, and a dedicated stockpile fund of A$185 million to secure the minerals.
King explained that the structure would allow the government to purchase minerals at guaranteed rates, while surpluses from future price increases could benefit taxpayers through on-selling. “We can encourage more investment, create stability in the market, and as prices rise, there’s the opportunity for the Australian taxpayer to capture the upside,” she said.
Supporting Domestic and Allied Supply Chains
The stockpile will not only secure resources for Australia but is intended to strengthen allied supply chains, particularly for high-tech and defence sectors. Canberra has indicated that portions of the reserve may be made available to international partners to mitigate supply disruptions.
Australia currently holds one of the largest reserves of rare-earth elements globally, and companies like Lynas and Arafura Minerals are expected to benefit from the government’s guaranteed off-take agreements. These measures are also intended to incentivise new investments in domestic mining operations and processing facilities.
G7 Engagement and International Cooperation
Treasurer Chalmers will discuss the initiative during meetings with finance ministers from the G7 nations, as well as India, Mexico, and South Korea, highlighting Australia’s strategic positioning in critical-mineral markets. Officials emphasised that the reserve will enhance trade relationships and provide stability amid rising global demand for minerals essential in clean energy, advanced manufacturing, and military equipment.
The initiative coincides with recent tensions surrounding China’s market influence. In previous years, China restricted rare-earth exports in response to trade disputes, demonstrating the geopolitical leverage inherent in controlling critical-mineral supplies. Australia’s reserve aims to reduce such vulnerabilities for both itself and allied nations.
Implementation Timeline
Legislation enabling the stockpile is expected to be introduced later this year, granting the government powers to strike off-take agreements with miners and oversee the stockpile through the Export Finance Agency and the industry department. The reserve, originally targeted for mid-2026, is now scheduled to become operational by year-end.
Industry and Policy Reactions
Industry leaders and analysts welcomed the announcement, noting its significance for national security and market stability. Tania Constable, CEO of the Minerals Council of Australia, said the reserve is a vital tool to enhance competitiveness in the mining sector and ensure a reliable supply of minerals crucial for defence and technology industries.
“Based on recent agreements and market developments, this initiative signals a proactive approach by Australia to secure critical minerals while supporting local producers and international allies,” Constable said.
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Final Thoughts
Australia’s A$1.2 billion critical-minerals stockpile demonstrates the government’s commitment to strengthening domestic production, reducing reliance on foreign suppliers, and stabilising markets for rare earths, antimony, and gallium. The initiative aligns with broader international efforts to secure essential resources for defence, clean energy, and advanced technologies, positioning Australia as a global leader in the strategic minerals sector.
