Albanese government announces $1.2 billion critical minerals strategic reserve

The federal government announced plans on Thursday to establish a Critical Minerals Strategic Reserve with an initial investment of $1.2 billion, including a $1 billion increase to the existing Critical Minerals Facility.

Prime Minister Anthony Albanese said the initiative would boost Australia’s economic resilience and leverage the country’s abundant resources of critical minerals and rare earths.

“In a time of global uncertainty, Australia will be stronger and safer by developing our critical national assets to create economic opportunity and resilience,” Albanese said.

The Strategic Reserve will operate through two key mechanisms: National Offtake Agreements, where the government will acquire agreed volumes of critical minerals from commercial projects or establish options to purchase at set prices; and selective stockpiling of certain key critical minerals.

According to the announcement, the reserve will focus primarily on minerals most important for Australia’s national security and that of key partners, with rare earths specifically mentioned as a priority.

Resources Minister Madeleine King emphasised the importance of these resources for both emissions reduction and national security.

“Critical minerals and rare earths are essential not only to reducing emissions but also for our security and the security of our key partners,” King said.

The government noted that as the Strategic Reserve matures, it will generate cash flow from sales of offtake on global markets and to key partners. Any minerals held by the Reserve will be made available to domestic industry and international partners.

A taskforce will be established to finalise the scope and design of the Strategic Reserve, which is expected to be operational in the second half of 2026.

This initiative builds on the government’s existing $7 billion Critical Minerals Production Tax Incentive and takes the total investment in the Critical Minerals Facility to $5 billion.

The announcement included criticism of opposition leader Peter Dutton, claiming he would cut production tax incentives and the Critical Minerals Facility to fund what the government described as a “$600 billion nuclear scheme.”

Australia possesses significant deposits of critical minerals, which are essential inputs for the energy transition, high-tech manufacturing, artificial intelligence, and the digital economy.

Picture: credit Australian Labor Party