Australlia’s mining industry is the backbone of our national economy. The Albanese Government will spend $1.2 million developing a national reserve of Australian critical minerals.

Under the plan, Australia will stockpile supplies of critical minerals such as lithium, cobalt and nickel. The aim is to ensure they are available to Australian manufacturers and select Australian allies.

So what’s behind the move, and what has been the reaction?

What’s behind the move?

Critical minerals are vital to the manufacture of AI applications, smartphones, solar panels and electric vehicles. They also play a vital role in the defence industry. For example, they are used to make defence assets such as nuclear-powered submarines, F-35 fighter jets and sonar systems.

Given their vital nature for several industries, the government wants to safeguard the supply for Australia and its allies.

While Australia is responsible for digging critical minerals, it is China that controls much of the world’s production of critical minerals. This means, ongoing supply is subject to the whims of Beijing. China, which produces 90 per cent of rare earths and a majority of critical minerals, has restricted the supply of metals key to the US defence sector as the trade war between the nations escalates.

The government says it has not been established for one particular set of negotiations.
However, experts expect the new critical minerals reserve will be used as leverage to try to gain an exemption from Donald Trump’s tariffs. At present, the US president has been pressuring Greenland and Ukraine to provide critical minerals to his country.

Prime Minister Anthony Albanese hopes the new reserve would make Australia more secure in a time of global uncertainty.

“To leverage our natural resources is in our national interest,” the Prime Minister said.

“I will ensure that Australia continues to produce and benefit from the resources that are essential to our national interest.

“The strategic reserve will mean the government has the power to purchase, own and sell critical minerals found here in Australia.

“It will mean we can deal with trade and market disruptions from a position of strength. ¬Because Australia will be able to call on an internationally-significant quantity of resources in global demand. This will be a national asset and our government will use it to advance Australia’s national interest.”

How will the plan work?

Under the plan, the government will acquire agreed volumes of critical minerals through voluntary contractual arrangements from commercial projects.

The government will also develop a list of priority critical minerals. These will be minerals deemed necessary for national security “when warranted by market conditions and strategic considerations”. The government will develop a physical stockpile of these minerals.

If re-elected, the government estimates it will have the reserve up and running by the second half of 2026.

What has been the reaction?

Australian mining sector experts have warned that the government’s plan could push down commodity prices.

While the Minerals Council of Australia welcomed the government’s focus on critical minerals, it questioned whether a strategic reserve was the best approach.

Chief executive Tanya Constable said the government should adjust policy settings to allow miners to stay competitive rather than rely on market interventions.

“We must focus on the fundamentals that will give Australia back the edge over other mining nations. That means lower energy prices, a wind-back of draconian industrial relations laws, and faster environmental approval times,” she said.

With critical minerals essential to so many industries, shoring up our national supply is essential.

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Article references

Brown, G (23 April 2025) ‘Election 2025: ‘Minerals for mates’: Anthony Albanese digs in on exports’, The Australian, accessed 28 April 2025.

Coorey, P (24 April 2025) ‘Minerals reserve to be used as leverage with Trump, foreign investors’, Financial Review, accessed 28 April 2025.