Australia must jump at the opportunity to strengthen its position in global critical materials supply chains, with a new EY Net Zero Centre report highlighting geopolitical tensions and concentrated processing capacity as major factors reshaping the global resources landscape.
The report, Risk and resilience: Rethinking Australia’s critical materials advantage in a disorderly world, argues that supply chains built around stable geopolitics and low-cost production are no longer fit for purpose as demand for critical minerals accelerates.
According to the report, Australia is well placed to benefit from growing demand for lithium, cobalt, nickel, copper and rare earths, but its geological advantages alone will not guarantee long-term success.
Instead, the report identifies processing and refining as the key leverage point, noting that China continues to dominate global refining capacity across most critical materials following years of sustained state-directed investment.
EY said projected demand growth presents an opportunity to diversify global supply chains over the next five to 15 years, with lithium demand expected to increase fivefold by 2040, copper demand to triple, and demand for other critical materials to at least double.
The report argues that no single country can secure critical mineral supply chains alone, calling for stronger coalitions between governments and industry to develop resilient extraction, processing and manufacturing networks.
It outlines three priorities for improving resilience: recognising the changing geopolitical environment, assessing risks across supply chain leverage points, and building trusted partnerships with like-minded nations.
The report also highlights Australia’s 2025 Critical Minerals Strategic Reserve as an example of governments taking a more active role in supporting strategically important projects through measures such as government-backed offtake agreements and selective stockpiling.
EY’s recommendations include encouraging businesses to invest in higher-value midstream processing opportunities, urging governments to reduce investment risk, accelerate project approvals and enabling infrastructure, and develop shared processing precincts.
The report concludes that these measures should be implemented over the next one to three years to strengthen Australia’s long-term competitiveness in critical materials supply chains.
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