Rare earths lead the charge in Australia’s $7.3 billion critical minerals investment
A surge in spending on new rare earths projects has seen critical minerals take over as the leader for investment in later-stage projects in Australia.
This year’s major projects report from the Federal Department of Industry, Science and Resources reflects rare earths’ emergence as the largest target for critical mineral project investment.
The study has identified 15 projects as recorded rare earth projects with proposed investment for later stage projects of $7.3 billion.
The new study has found that there has been continued local growth in greenfield rare earth mining projects over the last 12 months, with the addition of Australian Rare Earths’ (ASX: AR3) Koppamurra project in South Australia.
A number of existing projects have also advanced, including the tabling of a definitive feasibility study for the Donald project in Victoria and early work underway on Lynas Rare Earths’ (ASX: LYC) $500 million expansion of its Mount Weld operation — with first production expected from 2024.
Downstream processing a key trend
The study found that a key trend for rare earths major projects is the continued expansion into downstream processing, with three refining-focused projects on this year’s list.
As of late 2023, Lynas’ new $780m Kalgoorlie processing plant has final commissioning underway, with an estimated start for commercial production in 2024.
Iluka Resources’ (ASX: ILU) $1.25b Eneabba rare earths refinery expects early site works to be completed in the coming months, with first production from 2025.
This year’s report also includes a new project – Hastings Technology Metals’ (ASX: HAS) Onslow plant, which is expected to produce mixed rare earth carbonate from 2028.
Lithium investment also significant
According to the annual government report, Australia’s lithium sector has also continued to grow in the last 12 months, with total committed investments increasing by $2.5b, mainly through three major projects.
The largest of these is the stage 3-4 expansion of the Kemerton lithium hydroxide refinery. With a budget of $1.9b, this expansion is expected to boost lithium hydroxide production at this facility by 50,000 tonnes per year.
The $560m Pilgangoora P1000 project also reached the committed stage and is expected to lift spodumene production capacity at the existing facility by 320,000tpa.
Finally, the $105m Pilgangoora lithium phosphate demonstration refinery is another to reach the committed stage in 2023.
This plant is expected to produce 3,000 tonnes of lithium phosphate salt per year. In doing so, it will demonstrate a patented, emerging low emissions refining technology.
Comprehensive projects list
The full lithium project list consists of 17 projects in the committed, proposed and completed category, with total proposed investment of later development stages of around $7.2b.
Amongst the committed lithium projects, nine are expected to reach completion in 2024 and 2025.
A further four projects have already reached completion this year, including stages 1-2 of Albemarle’s Kemerton hydroxide refinery ($2.3b), stage 1 of the Kwinana hydroxide refinery joint venture between Tianqi and IGO (ASX: IGO) ($770m), stage 2 of Mineral Resources’ (ASX: MIN) Mt Marion mine ($120m) and stage 1 of Core Lithium’s (ASX: CXO) Finniss lithium project ($84m).
Committed critical minerals growth
The report found there has been a 75% increase in the value of committed critical minerals projects over the past year from $6.7b in 2022 to $11.8b in 2023.
Federal Minister for Resources and Northern Australia Madeleine King said the strong outlook for critical minerals projects supports the government’s strategy to become a major exporter of clean energy by 2030.
“Australia’s resources sector remains the engine room of the nation’s economy,” Minister King said.
“Resources are critical not only to our prosperity but to our commitment to reducing carbon emissions and reaching net zero.”
“The road to net zero runs through Australia’s resources sector.”
The major projects report identified 421 resources and energy projects under development in Australia at the end of October, up from 393 a year earlier.
This includes 86 committed projects — where a final investment decision has been taken — worth $77b and 46 projects worth $30b at the advanced feasibility stage.
The value of project completions rose for the third consecutive year, with 29 projects valued at $21b achieving commercial production over the year to October 2023.