Australian resources sector divided over Labor Party’s Critical Minerals Strategic Reserve plan
The Australian resources sector has offered mixed responses to the federal government’s announcement that it will launch a Critical Minerals Strategic Reserve if elected this month.
Prime Minister Anthony Albanese announced over the weekend that he would establish the reserve to protect Australia’s national interest.
Mr Albanese declared that, if re-elected, he would establish a taskforce to consult and finalise the scope and design of the reserve, which would be operational from the second half of 2026.
MCA uncertain
The Minerals Council of Australia (MCA) expressed uncertainty as to whether a Critical Minerals Strategic Reserve is the best approach.
MCA chief executive Tania Constable acknowledged that Australia has what the world needs in abundance and that its reserves may increase the nation’s chances of limiting the impact of US tariffs.
However, she noted that the initiative is certainly not without its domestic risks and may impact the commercial viability of operations through continued downward pressure on commodity prices.
Further evaluation needed
“The objective and merits of a Critical Minerals Strategic Reserve remain unclear and this initiative must be evaluated against other opportunities to leverage our mining industry,” Ms Constable said.
“These include support for projects that deliver regional development and jobs—committing to the Junior Minerals Exploration Incentive would support about $725 million of much-needed greenfield exploration expenditure over the next 10 years.”
“We must focus on the fundamentals that will give Australia back the edge over other mining nations,” she added.
“That means lower energy prices, a wind-back of draconian industrial relations laws and faster environmental approval times.”
Clear recognition
Elsewhere, chief executive of Western Australia’s Chamber of Minerals and Energy Rebecca Tomkinson said the proposal was clear recognition of the importance of WA’s critical minerals.
“Australia holds the world’s third-largest known rare earth reserves but currently accounts for just 3 per cent of global production,” Ms Tomkinson said.
“Recent trade and geopolitical disruptions present a golden opportunity for Australia to attract the significant investment required to unlock our world-class critical minerals endowment.
Project enhancement
“Like other critical minerals, the market for rare earths is thin, opaque and subject to unpredictable price swings, which has acted as a major barrier to getting projects off the ground.”
“Federal Labor’s plan to offer voluntary offtake agreements that allow producers to lock in stable and predictable revenue may assist in bringing projects to market by enhancing their attractiveness to investors.”
“However, it is critical the offtake agreements offer a fair price reflective of Australia’s high ESG standards.”
‘Position of strength’
In announcing the plan Mr Albanese said the strategic reserve would give the government the power to purchase, own and sell critical minerals found 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,” Mr Albanese said.
“This will be a national asset and our government will use it to advance Australia’s national interest.”