Australia mulls partners' needs, value-adding in critical minerals list rethink

Australia is considering a rethink of its critical minerals list that could see it follow the lead of the US Department of Energy, which just added copper as a critical mineral for energy.

The Australian government launched an issues paper Aug. 1 to seek stakeholder views to be considered in the updated critical minerals list, which was last revised in March 2022 and currently comprises 26 critical minerals and mineral groups.

The consultation process "may cover [Australia's] domestic mineral vulnerabilities, including current and potential vulnerabilities associated with new industries," such as clean energy or defense, according to the issues paper. The paper also asks whether Australia should "differentiate between criticality or importance of minerals, and the capability to process them."

Australia should consider metals that it can add downstream value to, said Vincent Algar, an executive with Australian Vanadium Ltd.

"We have pretty much everything in terms of resources except large amounts of things like chrome. We make a lot of our own nickel concentrate and now nickel sulfate products, and we can process lithium to some degree, but our biggest vulnerability is we don't have secondary processing to a high level in terms of value creation," Algar told S&P Global Commodity Insights. Nickel is currently not on Australia's critical minerals list.

Shannon O'Rourke, CEO of Future Battery Industries CRC, said the refining and processing of most of the minerals in Australia's list are concentrated elsewhere, giving rise to supply chain risk. "It is essential to work with our trade and investment partners to de-risk the industry," the CEO said.

Australia's current list of critical minerals is "well established and enjoys general global consensus," although "the EU and US have a couple more listed," O'Rourke said. "Minerals are critical when they are essential, supply is vulnerable, [and] our partners need them and we have them. It is the nexus of these needs where strategic value can be created," the CEO said.

Glencore's Mt Isa copper refinery in Queensland, Australia. Miners want copper added to Australia's critical minerals list. Source: Glencore PLC

Following the lead of priority partners

A key criterion for Australia's critical minerals list is if a mineral is what "our strategic partners need," according to the paper, noting that the critical minerals criteria used by the country's "priority partners" may also be considered in updating its own list.

Copper, for example, was named a "strategic raw material" by the European Commission but is not part of the commission's 34 "critical raw materials." The US Department of Energy has also tagged the red metal critical for energy, deeming it "near critical" in the medium term.

It "makes sense" for Australia to follow the US' lead in designating copper as a critical mineral, given the close ties between the two countries as well as the Climate, Critical Minerals, and Clean Energy Transformation Compact their leaders signed in May, Nicholas Boyd-Mathews, chief investment officer of Eden Asset Management Pty. Ltd., told Commodity Insights.

O'Rourke said "there is discussion in the industry about the need for copper in the energy transition, and demand is expected to increase at least twofold by 2030, despite declining grades [in mines]. The addition of copper would align the Australian, EU and US lists."

Just as the Copper Development Association Inc. has lobbied the US to add the red metal to its critical minerals list, miners have made similar moves Down Under.

"The transition to clean energy presents a significant opportunity for Australia as economies around the world seek to secure their critical minerals supply chains," a spokesperson for major iron ore producer Fortescue Metals Group Ltd. told Commodity Insights. Fortescue is currently exploring for copper and looking at lithium.

"To succeed, we need more efficient and effective regulatory approvals processes to enable mineral exploration and mining projects to be developed in a time-efficient and cost-effective manner," the spokesperson said.

Australia's critical minerals strategy, which was launched in June, identified key end-use technologies to prioritize support for the critical minerals that underpin them. These technologies include batteries, battery components and precursor materials, rare earth permanent magnets, catalysts for hydrogen production, semiconductors and high-performance alloys and metals.

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