The Australian government has unveiled a major initiative to establish a national critical minerals strategic reserve, promising an initial investment of $1.2 billion if re-elected in the upcoming federal election.
The move aims to secure Australia’s position in global supply chains for essential minerals such as rare earths, which are vital for advanced manufacturing, clean energy, and defence industries.
Prime Minister Anthony Albanese emphasised the importance of the reserve in the face of growing global trade tensions and supply chain vulnerabilities, particularly as China continues to dominate the processing and export of critical minerals.
“We need to do more with the natural resources the world needs, and that Australia can provide,” Albanese said.
The reserve will be established through a combination of national offtake agreements — where the government secures supply from commercial producers — and selective stockpiling of priority minerals.
These mechanisms are designed to mitigate risks of market manipulation and supply disruptions, ensuring that both domestic industries and key international allies have reliable access to these strategic resources.
Australian Strategic Materials Limited (ASM), which is developing the Dubbo Project in New South Wales to extract a range of critical minerals, welcomed the announcement.
ASM Managing Director and CEO Rowena Smith stated: “These plans further highlight the global importance of Australia’s rich critical mineral endowment and processing capability.
“As a country, Australia can play a leading role in the development of secure, alternative rare earth and critical minerals supply chains, and this initiative will add impetus to that objective.”
Smith noted that the Dubbo Project, which is “shovel-ready and strategically positioned,” could play a key role in supporting the objectives of the strategic reserve.
“The Dubbo Project’s broad basket of products are vital for a range of critical global industries including advanced manufacturing, clean energy, defence and aerospace.
“All products currently appear on the Australian Critical Minerals List and the official lists of many other ally countries, these lists generally signifying that a mineral is essential for economic or national security and has a supply chain vulnerable to disruption,” she said.
While the Minerals Council of Australia (MCA) acknowledged the government’s investment in the sector, CEO Tania Constable cautioned that the merits of a strategic reserve remain uncertain.
“Whether a Critical Minerals Strategic Reserve is the best approach remains to be seen,” Constable said.
She warned that such a reserve could introduce domestic risks and potentially impact the commercial viability of operations through downward pressure on commodity prices.
Constable advocated for a broader market-driven approach, emphasising the need for policies that support regional development, lower energy costs, and faster environmental approvals.
“Australia’s real advantage lies in securing end-to-end supply chains, building strategic partnerships with like-minded countries, and connecting Australian mines to international manufacturers,” she said.
The government plans to engage with industry stakeholders and state governments to finalise the design of the reserve, to make it operational in the second half of 2026.
Minerals stored in the reserve will be available to both domestic industries and trusted international partners, as Australia seeks to strengthen its role as a reliable supplier amid global supply chain pressures.
As the election approaches, the strategic reserve proposal has become a focal point in the national debate over how best to leverage Australia’s mineral wealth for economic security and international competitiveness.
