Inside the mechanics of Australia’s new critical minerals reserve
Australia will invest $1.2 billion in a new Critical Minerals Strategic Reserve that focuses first on antimony, gallium and rare earth elements, using mineral rights, targeted stockpiling and expanded finance tools to secure supply for industry, defence and international partners.
The Australian Government has announced a $1.2 billion investment to establish a Critical Minerals Strategic Reserve, aimed at securing the supply of materials considered vital to Australia’s economy and national security.
Rather than operating solely as a physical stockpile, the reserve will work by securing rights to minerals produced in Australia and on-selling those rights to meet demand. This approach is intended to provide supply certainty while supporting domestic production and processing.
Future transactions under the reserve will be led by the Department of Industry, Science and Resources, working in close partnership with Export Finance Australia. Enabling legislation will be introduced this year to provide Export Finance Australia with additional powers to support the reserve’s operation.
Why antimony, gallium and rare earths come first
The initial focus of the reserve will be on antimony, gallium and rare earth elements, reflecting their role across clean-energy technologies, advanced manufacturing and defence applications.
Antimony is used in household and commercial batteries, night-vision equipment and high-performance flame-retardant materials. Gallium is a key input for advanced semiconductors used in radar systems and telecommunications. Rare earth elements are essential for high-performance permanent magnets used in technologies ranging from MRI machines to fighter jets and wind turbines.
According to Minister for Resources Madeleine King, “From defence applications to clean manufacturing, critical minerals are at the heart of our economic and national security.”
Funding structure and implementation
Of the $1.2 billion allocation, $1 billion will be used for transactions drawn from the expanded $5 billion Critical Minerals Facility. The facility currently provides government-backed loans and equity support for critical minerals projects and will be expanded to support the reserve’s remit.
A further $185 million has been allocated for selective stockpiling of minerals, where required, along with other implementation costs associated with establishing and operating the reserve.
Treasurer Jim Chalmers said the model is designed to improve reliability across the supply chain, stating:
“Ensuring we have a reliable reserve of these critical resources will strengthen supply chains and help to stabilise critical minerals markets.”
International engagement and supply chain cooperation
The announcement comes alongside renewed engagement with international partners. Treasurer Jim Chalmers will brief Australia’s allies and trading partners in Washington DC this week, following earlier engagement by Resources Minister Madeleine King at G7+ meetings in Toronto.
The reserve is intended to support collaboration with partners including the United States, Japan, the Republic of Korea, Europe, Canada and the United Kingdom, with consultations planned to develop cooperative approaches that maximise the reserve’s impact on supply chains.
Minister for Trade and Tourism Don Farrell said Australia’s mineral endowment positions it as a reliable supplier, noting, “Australia has some of the largest deposits of critical minerals in the world, which are vital to everything from energy, to medicine, and advanced computing technologies.”
Linking finance, production and policy
The Critical Minerals Strategic Reserve supports Australia’s updated Critical Minerals Strategy and follows a bilateral agreement signed with the United States in October, intended to support a pipeline of critical minerals and rare earths projects valued at around $13 billion.
By combining mineral rights, targeted stockpiling and expanded finance mechanisms, the reserve is designed to support Australian projects while contributing to more reliable supply arrangements for domestic industry and international partners.
