Trump-Albanese critical minerals deal must not leave behind Australia’s world-leading METS sector

By Stefan Skorut

Amid the general enthusiasm for the Trump-Albanese critical minerals deal, it’s vital for policymakers to be aware that the potential benefits could be wasted if Australia does not continue to support our globally leading innovation. 

The highly anticipated $US 8.5 billion deal aims to address a key feature of critical minerals markets: that their concentration is often dominated by a single country, region or company. Historically, price suppression tactics in such markets have stifled incentive prices and delayed new developments. 

The Australian Government has responded with the $1.2 billion critical mineral strategic reserve, expected to be operational in the second half of 2026. 

However, strategic reserves and floor pricing have historically had mixed outcomes. 

Targeted government support can be part of the solution, but sound policy must strike a careful balance between encouraging new supply and industries without propping up sub-economic projects. The goal should be to temporarily shield new assets from price suppression tactics until new diversified supply can be established, but not create dependency. This strategy should be employed only in commodities where the market failure is most evident, which tends to be where supply is concentrated, such as rare earths. 

Poorly targeted and designed interventions risk sustaining uneconomic assets and weakening the drive for innovation, which thrives on competition.

Backing new mines through temporary price floors can accelerate diversification in critical minerals supply and, as a market-based mechanism, price floors do not require the government to ‘pick winners’. 

However both permanent price floors and public funding cannot serve as a permanent shield for domestic producers in global competition. 

Building resilient assets is a more enduring solution, though harder to achieve. Technology, innovation and affordable clean energy are key enablers of resilience. They provide benefits for Australia’s refining and processing capabilities, leading to a greater share of global trade and domestic job creation. 

Australia’s world-class mineral endowment is an advantage in the new economy, but only if we continue to be a global leader in the METS (Mining Equipment, Technology and Services) sector.

Geopolitical dynamics are constantly evolving and new technologies are creating demand for different minerals. To adapt to these dynamics, Australia must continue to innovate and adopt METS technology, which can often be found in our own backyard.

Stefan Skorut is the CIO of a leading independent investment and advisory firm FRC Ambrian Funds Management, which specialises in resources, energy and associated technologies.