The federal government has pledged $1.2 billion to create a strategic reserve of 31 “critical minerals,” essential for everything from your vacuum cleaner’s suction power to the transition to green energy and the production of advanced weapons.
While Australia is rich in these minerals, the capability to process them into usable materials largely resides in China.
In response to China’s overwhelming control of global processing facilities, both the European Union and the United States have recently implemented policies aimed at regaining some of that capacity domestically.
But what are these minerals and why are they needed?
What are Australia’s 31 critical minerals?
Many of the minerals on the list share a key trait: they play crucial roles in battery production.
Materials like lithium, cobalt, nickel, and graphite are essential components of standard rechargeable batteries, forming the cathode, anode, electrolyte, and separator.
Then there are the rare earth elements—part of the lanthanide group on the periodic table—which are vital for producing powerful magnets used in electric motors, medical equipment, and everyday electronics (yes, even your vacuum cleaner).
The remaining minerals have more specialized industrial uses and cater to smaller markets compared to battery-related metals.
Now, let’s dive deeper into some of the critical minerals found in Australia.
Lithium
Lithium is a staple in modern households and is key to the green energy transition, serving as the main component in many battery types.
It can be sourced either by mining hard rock ores or by extracting it from saline brines through evaporation.
Australia leads the world in producing spodumene, the primary raw material used to make lithium hydroxide and lithium carbonate.
However, after miners extract the spodumene, it’s typically exported to China, where it’s refined into battery-grade materials.
Where is lithium mined and refined?
However, close to 60 percent of the world’s lithium reserves are located in South America’s “lithium triangle”—spanning Bolivia, Chile, and Argentina—where lithium is extracted from high-grade, environmentally sensitive areas using brine evaporation.
No matter where it’s mined, the vast majority of lithium is still refined in China, which also dominates global lithium battery production.
Graphite
Graphite is the most abundant material in a rechargeable battery, forming the anode—the battery’s negatively charged terminal.
Renowned for its excellent electrical conductivity and high melting point, graphite is also used in applications like blast furnace linings, heavy-duty brake systems, and, of course, pencils.
Top producers include China, Brazil, Madagascar, and India.
In 2024, global graphite output reached 1.03 million tonnes, with China accounting for 93 percent of the world’s battery-grade graphite supply.
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Looking ahead to 2030, the International Energy Agency predicts that global demand for graphite will outpace supply by a factor of ten.
Australia has pinpointed significant graphite deposits across Western Australia, the Northern Territory, South Australia, and Queensland.
In 2024, the Western Australian Government pledged $6.5 million to support the development of a graphite processing plant by ASX-listed International Graphite Limited.
Cobalt
Cobalt, found in the cathode or positive terminal of a battery, is valued for its high energy density and thermal stability, making it a key component for manufacturers.
However, the environmental and ethical challenges associated with cobalt mining—particularly in the Democratic Republic of Congo—have driven efforts to reduce reliance on the metal.
Currently, the DRC supplies 66 percent of the world’s cobalt, while 74 percent of refining is done in China.
Australia holds the fourth-largest cobalt reserves globally. Notable sites include Glencore’s Murrin Murrin nickel-cobalt operation in Western Australia, Cobalt Blue’s project in Broken Hill, and Andrea Resources’ deposits in the WA goldfields.
To limit dependence on cobalt, manufacturers are exploring alternatives such as high-nickel cathodes, solid-state batteries, and lithium iron phosphate technologies.
While the federal government projects cobalt demand could surge to 20 times its 2020 levels, the International Energy
Agency forecasts its use in battery storage could decline to nearly zero by 2050—though cobalt will continue to play a vital role in super-alloys for military and aerospace applications.
Nickel
A large share of global nickel production is concentrated just north of Australia, in Indonesia, which also handles much of the processing.
Nickel has become increasingly vital in modern battery cathodes, often replacing cobalt in newer battery technologies.
Beyond batteries, nickel enhances the corrosion resistance of stainless steel and alloys, and it accounts for about 25 percent of the metal in most Australian coins.
Indonesia’s dominance in the market has dealt a blow to Australia’s nickel mining industry, leaving Glencore’s Murrin Murrin as the only active operation.
Still, optimism remains among some miners, as Australia holds the world’s second-largest nickel reserves and eyes a potential revival in the sector.
Rare earth elements
If you’re familiar with the layout of the periodic table, you’ll find the rare earth elements in the lanthanide series, located in the second-last row. Yttrium is also considered part of this group.
Among the most sought-after rare earths are neodymium, praseodymium, terbium, and dysprosium—key components in powerful magnets used in medical equipment, headphones, hard drives, vacuum cleaners, electric motors, wind turbines, and satellite communications.
China not only supplies the vast majority of these elements but also leads the world in processing them.
Rare earth mining and refining
China recently demonstrated its dominance in the rare earth market by imposing export restrictions on seven key elements in retaliation to U.S. tariffs.
In Australia, Lynas Resources extracts rare earths from the Goldfields region of Western Australia and processes them at a facility in Malaysia. The company also runs a refinery in Kalgoorlie and has plans to establish another in Texas.
In 2023, the Australian federal government committed $475 million to support a rare earth refinery being developed by Iluka Resources in Eneabba, north of Perth.
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