Context

Critical minerals are defined as those that are essential for modern technologies, the economy, or national security and have supply chains exposed to risk or disruption. It is this significant exposure to supply chain risk that differentiates critical minerals from strategic minerals.

Different countries use different approaches to define critical minerals or ‘criticality’ (p. 1,019). These generally include an assessment of economic importance weighted against a measure of vulnerability. Often, vulnerability relates not just to the source of a mineral’s primary ore or its global distribution but also factors related to the supply chain, such as processing locations. Other assessments may recognise vulnerability as it relates to specific uses, such as defence. Each country has its own needs and vulnerabilities, and therefore, their critical minerals lists may vary.

Australia’s trading partners, such as the USA, UK, Canada, India, New Zealand, South Korea and the EU each have their own critical minerals lists. Additionally, in 2024, NATO published its own list of 12 defence-critical raw materials. It is important to note that these lists can change over time as supply, technological, industrial and geopolitical conditions vary (pp. 1,019–1,020). Importantly, supply chain vulnerabilities can be heightened in uncertain geopolitical or trade environments.

Australia’s approach to critical minerals

Australia’s Critical Minerals Strategy 2023–2030 sets out how critical minerals are defined and examines how their development and supply can be supported and secured. The related Critical Minerals List identifies 31 critical minerals [see Box 1], which satisfy a four-part test:

• are essential to our modern technologies, economies, and national security, specifically the priority technologies set out in the Critical Minerals Strategy (p. 16), linked to the List of Critical Technologies in the National Interest
• for which Australia has geological potential for resources
• are in demand from our strategic international partners
• are vulnerable to supply chain disruption.

The Critical Minerals list will be reviewed at least every 3 years, as recommended by the Critical Minerals Strategy (p. 44). The Minister for Resources is also able to review and update the list to reflect ‘global strategic, technological, economic or policy changes’. The Critical Minerals List has been updated over time, with nickel being added to the list in February 2024, after additional updates in 2023. Mineral commodities listed as critical minerals are eligible for various government supports and funding, including projects seeking to mine, process, or value-add.

Some of the applications that use critical minerals are provided in Table 1. Note, this list of uses is not exhaustive, and is focused on minerals for which Australia has significant production or reserves.

Table 1 Some of Australia’s critical minerals and their uses

Notes: Defence uses mainly include use in alloys.

Source: Compiled by the Library from Department of Industry, Science and Resources (DISR), Resources and Energy Quarterly March 2025, (Canberra: DISR, 31 March 2025), 106 (nickel), 122 (lithium), and 128 (others).

Australia’s role: quarry, factory, or end-user?

Australia hosts globally significant deposits of critical minerals distributed across the country (Figure 1). It is also a major global exporter of some critical minerals, having in 2023 produced 49% of the lithium, 9% of the manganese, 24% of the zircon, and significant proportions of cobalt, rare earths, and other critical minerals.

The Critical Minerals Strategy states that ‘growing the [critical minerals] sector and moving into downstream processing, where we can do so competitively, will capture more value, economic benefits and jobs in Australia while boosting our sovereign capability’ (p. 12). However, despite Australia’s established raw material export successes, moving into processing and manufacturing (and the broader economic impacts), is less certain.

A key aspect will likely require fostering investment in critical minerals, which can secure supply for both the domestic market and key trade partners. Placing a commodity on the Critical Mineral List is a key driver in fostering industry interest, which in turn drives growth in Australia’s identified resource base. The trade-off is that industrial policy can introduce economic distortions and inefficiencies and may ‘crowd-out’ other sectors in the economy.

Figure 1              Australia’s critical mineral deposits and mines 2024

Source: Australian Critical Minerals Map 2024 – A4 version from J. Pheeney and C. Kucka, Australian Critical Minerals Map 2024 (6^th Edition), Scale 1:5,000,000, (Canberra: Geoscience Australia, January 2025). A higher resolution, more detailed large-format PDF of this map is available.

Critical minerals funding, support, and research

Government research and development support allows agencies to carry out precompetitive activities such as data collection and modelling, and reassessing existing data. Current initiatives include:

• The $4 billion Critical Minerals Facility provides commercial financing to critical minerals projects in Australia.
• The 2024–25 Budget committed $3.4 billion to the Resourcing Australia’s Prosperity program (RAP) over 35 years (p. 66). More detail is provided in Critical minerals and Geoscience Australia – resourcing Australia's prosperity.
• The Australian Critical Minerals Research and Development Hub is a collaboration between Geoscience Australia, CSIRO and the Australian Nuclear Safety and Technology Organisation, universities, industry, and the broader research community.
• Support through the Northern Australia Investment Facility, Clean Energy Finance Corporation, Critical Minerals Production Tax Incentive, National Reconstruction Fund, and the Critical Minerals Office.
• Processing and refining of critical minerals is one of the priority economic sectors aligned with the government’s Future Made in Australia – National Interest Framework (NIF), with support through the Future Made in Australia framework.

International partnerships

Australia has entered into agreements with the USA, Canada, UK, Japan, India, Germany, and the EU to streamline critical mineral resources development. This includes mining and ore production, mid-stream processing and export arrangements. The Department of Industry, Science and Resources also lists other examples of bilateral and multilateral international arrangements relating to the critical minerals sector.

Conclusion

A comprehensive review of the Critical Minerals Strategy is expected in 2026 (p. 12). Australia is in the early stages of growing its critical minerals sector. While exploration and mining continue to grow, mid-stream processing and down-stream manufacturing are not yet developed. Agreements with international partners may help ensure stable supply chains internationally. This may be bolstered by the Australian Labor Party’s 2025 federal election commitment to create a critical minerals strategic reserve. However, it remains to be seen how government support will translate into economic activity, domestic growth and supply chain certainty for critical minerals.

Further Reading

• Australian Critical Minerals Prospectus, Australian Trade and Investment Commission
• Annual publication summarising advanced critical minerals projects.
• Resources and Energy Quarterly (REQ) series, Department of industry, Science and Resources (DISR)
• This series provides information and outlooks for a range of energy and mineral commodities and examines Australian production and trade in a global context.
• A. Hughes, A. Britt, J. Pheeney, A. Morfiadakis, C. Kucka, H. Colclough, C. Munns, A. Senior, A. Cross, A. Hitchman, Y. Chen, J. Walsh and A. Jayasekara, Australia’s Identified Mineral Resources 2024, (Canberra: Geoscience Australia, 27 February 2025).
• Most recent annual assessment of Australia’s mineral reserves and resources for all major and some minor commodities, including critical minerals.
• International Energy Agency (IEA), The Role of Critical Minerals in Clean Energy Transitions, (Paris: IEA, 2021).
• Analysis of links between critical minerals and the energy transition.
• IEA, Global Critical Minerals Outlook 2025, (Paris: IEA, May 2025).
• A snapshot of recent industry developments with medium- and long-term supply and demand outlooks. Assesses broad risks to critical minerals supply chains.
• Nedal T. Nassar and Steven M. Fortier, Methodology and Technical Input for the 2021 Review and Revision of the U.S. Critical Minerals List, US Geological Survey (USGS) Open-File Report 2021-1045 (Reston, VA: USGS, 2021).
• Detailed discussion of the US approach to assessing critical minerals, including a background on policy development.

Relevant Parliamentary Library Publications

• Dr Becky Bathgate, ‘New industrial policy: a Future Made in Australia’, Budget Review Article 2024–25, (Canberra: Parliamentary Library, 25 June 2024).
• Dr Becky Bathgate and Ian Zhou, ‘Future Made in Australia Bill 2024 [and] Future Made in Australia (Omnibus Amendments No. 1) Bill 2024’, Bills Digest, 6, 2024–25, (Canberra: Parliamentary Library, 9 August 2024).
• Scanlon Williams, ‘Future Made in Australia (Production Tax Credits and Other Measures) Bill 2024’, Bills Digest, 46, 2024–25, (Canberra: Parliamentary Library, 30 January 2025).

• Licence

  © Commonwealth of Australia

  

  Creative Commons

  With the exception of the Commonwealth Coat of Arms, and to the extent that copyright subsists in a third party, this publication, its logo and front page design are licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International licence.

  In essence, you are free to copy and communicate this work in its current form for all non-commercial purposes, as long as you attribute the work to the author and abide by the other licence terms. The work cannot be adapted or modified in any way. Content from this publication should be attributed in the following way: Author(s), Title of publication, Series Name and No, Publisher, Date.

  To the extent that copyright subsists in third party quotes it remains with the original owner and permission may be required to reuse the material.

  Inquiries regarding the licence and any use of the publication are welcome to webmanager@aph.gov.au.

• Disclaimer

  This work has been prepared to support the work of the Australian Parliament using information available at the time of production. The views expressed do not reflect an official position of the Parliamentary Library, nor do they constitute professional legal opinion.

  For copyright reasons some linked items are only available to members of Parliament. All links are correct at the time of publication and are not subsequently updated.

  Any concerns or complaints should be directed to the Parliamentary Librarian at webmanager@aph.gov.au. Parliamentary Library staff are available to discuss the contents of publications with Senators and Members and their staff. To access this service, clients may contact the author or the Library‘s Central Entry Point for referral.

Related

Policy Brief

Electoral finance reform

By Politics and Public Administration section

9 min read

Policy Brief

Commonwealth funding for dental

By Social Policy section

9 min read

Policy Brief

Australia's flagging productivity growth

By Economic Policy section

8 min read