Australia announces critical minerals funding plans
Australia Prime Minister Scott Morrison announced nearly A$500 million ($US360 million) in funding for a number of projects in Australia aimed at boosting the output of critical minerals. The funding will work to diversify Australia’s supply of critical minerals for itself and its allies and counter China’s dominance of the global market.
The projects are in Western Australia. Morrison said the state would become a powerhouse for Australia’s allies.
“Recent events have underlined that Australia faces its most difficult and dangerous security environment that we have seen in 80 years. The events unfolding in Europe are a reminder of the close relationship between energy security, economic security and national security,” he told reporters.
A meeting of the Quad group leaders of Australia, the United States, Japan, and India agreed in Washington in September to improve supply chain security for rare earth, Reuters reported.
“China currently dominates around 70 to 80 percent of global critical minerals production and continues to consolidate its hold over these supply chains. This initiative is designed to address that dominance,” said Angus Taylor, minister for industry, energy and emissions reduction.
Diplomatic relations between Australia and China are strained, with Canberra describing trade sanctions imposed on Australian agriculture and coal by Beijing in response to political grievances as “economic coercion.”
Projects to be funded include the second rare earth separation plant to be built outside China, a battery material refinery and a vanadium processing plant. Funding will also be provided to commercialize government research and bring new companies to market.
Some A$200 million will also be included in this month’s budget for grants to bring more critical minerals projects to market. Australia has already made A$2 billion in financing available to build the industry.
Australia produces half the world’s lithium, is the second-largest producer of cobalt, and is the fourth-largest producer of rare earths.
Diversifying resources exports will strengthen the Australian economy, officials also said.
Australia’s resources and energy exports are worth A$348.9 billion, with iron ore shipped from Western Australia to China the nation’s biggest export earner.
The funding for critical minerals follows an announcement by Morrison on Tuesday that Australia will build a A$4.3 billion naval dry dock in Western Australia to maintain navy ships and nuclear submarines visiting Australia from allied nations, as well as those it will acquire under the AUKUS defense agreement with the United States and Britain.