Albanese announces strategic critical minerals reserve
Make us a preferred source
Make us a preferred source on Google
The news: Anthony Albanese has outlined plans to establish a Critical Minerals Strategic Reserve, which could be used as a bargaining chip in negotiations with the Trump administration to ease tariffs.
The numbers: A re-elected Labor Government would make an initial investment of $1.2 billion in the reserve, including through a $1 billion increase in the existing Critical Minerals Facility, taking the government’s total investment to $5 billion.
Labor expects the strategic reserve and the expansion of the Critical Minerals Facility to operate in tandem with its $7 billion Critical Minerals Production Tax Incentive, which is part of the Future Made in Australia package.
The context: Australia has some of the some of the world's largest reserves of critical minerals including lithium, cobalt and rare earths. They are increasingly becoming a flashpoint in the US-China rivalry as they are essential components of modern technologies like electric vehicles, wind turbines and smartphones, as well as advanced defence technologies.
Albanese on Thursday will announce the establishment of national offtake agreements to allow the government to purchase agreed volumes of critical minerals from commercial projects, or establish an option to purchase at a given price, holding security over the assets.
There will also be selective stockpiling of certain key critical minerals produced under the offtake agreements.
As its holdings mature, the reserve will generate cashflow from sales of offtake on global markets and to key partners, according to Labor.
The primary consideration for entering into offtake agreements will be securing priority critical minerals for strategic reasons. The reserve will be focused on a subset of critical minerals that are most important for Australia’s national security and the security of its key partners, including rare earths.
The strategic reserve will also accumulate stockpiles of priority minerals when warranted by market conditions and strategic considerations, but it is anticipated that these will be “modest and time-limited in most cases”.
Minerals held by the reserve will be made available to domestic industry and key international partners, with the mechanism and allocations to be determined by government and subject to consultation.
A taskforce will be established to consult and finalise the scope and design of the strategic reserve in government, and Labor hopes to have it operational by the second half of 2026.
Both Labor and the Coalition have identified the development of critical minerals as key to any potential deal with Donald Trump to remove tariffs on Australia.
What they said: “In a time of global uncertainty, Australia will be stronger and safer by developing our critical national assets to create economic opportunity and resilience,” Albanese said.
"To leverage our natural resources is in our national interest.
“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 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.”
The source: Labor campaign
