Australia-US alliance key to creating critical minerals hub


Having inked a critical minerals development deal with the United States, Australia is securing its future as a key global producer of critical minerals. Salomae Haselgrove investigates what steps have been taken so far. 

Combining the United States’ expertise in the field with Australia’s ideal deposits, the two nations are set to become a power alliance in the critical earths sector, shaking up a market historically dominated by China.

As long-term trading partners and defensive allies, including a critical minerals partnership that started in 2018, Geoscience Australia and the United States Geological Survey (USGS) signed a formal project agreement in November to further solidify this working relationship.

The agreement is a logical step in furthering both countries’ prospects within the industry.

Critical minerals, or rare earths, are an essential component for advanced technology manufacturing, in industries including aerospace, defence, renewable energy, agricultural and telecommunication technologies. These minerals are found in lithium ion batteries, which power everyday items such as smartphones and laptops.

Critical mineral types in Australia include cobalt, nickel, magnesium, rare earth vanadium, tungsten, rare earth scandium and molybdenum.

While Australia, in particular Queensland and Western Australia have the supply, the US has the demand, with its healthy aerospace industry and ramping up of the renewable energy sector.

Queensland Resources Council chief executive Ian Macfarlane says this arrangement will give investors confidence in the sector and help it to remain stable.

“To have an avenue where you’ve got a strategic alliance and a stable, working market, that gives confidence to people,” Macfarlane tells Australian Mining. “Not only for people to feel confident to invest, but for governments and other agencies to start putting up dollars for exploration and initial developments of deposits.

“As long-term trading partners, I think it’s a very good fit. The US will provide expertise and investment capital with companies and we’ve got good deposits, a workforce and expertise.”

One of Australia’s most promising regions for development in this space is north-west Queensland, which is renowned for mineral development, according to Macfarlane.

The space has seen solid growth during the past few years, with Queensland minerals industry jobs jumping up by almost 50 per cent in three years.

“The minerals industry in Queensland supported just under 47,000 jobs three years ago and now it’s gone up almost 50 per cent on that,” Macfarlane says.

“In terms of jobs, there has been a 30 per cent increase in jobs, the industry has seen almost 60,000 jobs in these mineral regions.

“At the same time, there’s been a jump in value from $7.8 billion to $11.7 billion so it’s a massive part of Queensland’s economy, highlighting just how well the industry can react when there’s a solid market.”

In addition to the formal partner agreement with the US, Australia has also taken steps in its own backyard to further its commitment to this growing sector, opening a Critical Minerals Facilitation Office in Canberra in late January.

The office staff will work with all levels of government, industry and the science and research sectors to develop Australian critical mineral resources and maximise opportunities within this field.

Mt Isa, Queensland.


The Export Finance Australia, Defence Export Facility and Northern Australia Infrastructure Facility will offer financial support for upcoming Australian critical minerals projects.

Macfarlane also believes that there may be the potential to build more strategic alliances with other countries in addition to the US in the future.

“We have real potential to expand alliances to other countries,” he says.

“Japan is keen to ensure that it’s not reliant on one source of critical minerals, so they would be an obvious next step.

“Also, potentially India in time and Korea as well, depending on where it goes with its renewable energy industry.”

While more Australian critical minerals deposits and potential for relationships are strong, Macfarlane says infrastructure development is needed, and urges governments and private enterprises alike to support this opportunity.

“One of the challenges going forward in developing Australia’s critical minerals sector is the infrastructure and energy costs,” Macfarlane says.

“Resolving issues around infrastructure, energy costs and getting a stable local workforce is going to take a strategic approach and good cooperation between private enterprise and government.”

This includes processing infrastructure, which according to Macfarlane, is something often completed overseas for other commodities such as bauxite.

“Australia has tended to drift away from processing, due in part to these energy costs,” he explains.

“We’ve got to reverse that trend of exporting things we could process here and we need to continue making the big investments required to support this.

“Making sure we process these minerals is providing potential jobs for places like Townsville, Mt Isa and other smaller centres, which are just as important.”

With the Australia and US alliance stabilising Australia’s critical minerals market, Macfarlane believes the industry is in a positive position to thrive well into the future.

“A critical minerals hub would position Queensland, as well as other states well, with deposits of cobalt, nickel, magnesium, tungsten, molybdenum and rare earth vanadium and scandium,” he concludes.

“It’s a good sign to have strong commitment from the Queensland Government and the show of solidarity from Washington as we lay down the foundations to build a strong critical minerals sector.”

This article also appears in the March edition of Australian Mining. 

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