Australia seeks to reduce reliance on China with $A4bn fund for critical minerals projects

Australia is spending billions on critical minerals projects in order to become world leader in the clean energy revolution and reduce dependency on China’s supply.

Australia will double its $A2bn fund for critical minerals projects in a bid to stamp ourselves as a world leader in the resources required for the clean energy revolution – while also reducing our reliance on China.

Anthony Albanese will use the cash boost to remind the US that it needs to work with its allies on reducing emissions, amid fears that President Joe Biden’s hundreds of billions of dollars in climate subsidies will suck investment away from Australia.

The Prime Minister was due to unveil the $A2bn expansion of the critical minerals facility in Washington DC on Tuesday (local time) at a roundtable featuring industry leaders and US Commerce Secretary Gina Raimondo.

Anthony Albanese in Washington DC with Australian US Ambassador Kevin Rudd and leaders from the climate, critical minerals and clean energy industries. Picture: X

The scheme, now worth $A4bn, provides loans for projects mining critical minerals such as lithium and cobalt which are needed in vast quantities to manufacture batteries, electric vehicles, solar panels and wind farms, as well as advanced military technologies.

But the world is largely reliant on China for critical minerals, sparking a rush to develop secure supply chains including in Australia.

Ms Raimondo said Australia and the US had “allowed ourselves to become vulnerable by being overly dependent on one or two countries around the world”.

“China has a head start, and that means we have to work a little bit harder and a little bit faster,” she said.

Anthony Albanese was due to unveil the $A2bn expansion of the critical minerals facility in Washington DC. Picture: X

She said China had already shown a willingness to slap export restrictions on its critical minerals as a “retaliatory measure”, and warned of further consequences of its domination of the market.

“We all know that if China were to point that in a direction unfavourable to us, it could cause a great deal of pain very quickly,” Ms Raimondo said.

The government is now spending $A6bn on value-adding investments in Australian resources, with Mr Albanese saying this would “help to build supply chains with the United States and support our shared clean energy, manufacturing and defence ambitions”.

Anthony Albanese, Kevin Rudd and US Secretary of Commerce Gina Raimondo. Picture: X

The PM out for his morning walk in Washington. Picture: Instagram

“My government is committed to transforming Australia into a renewable energy superpower, and harnessing the critical minerals we have at home is crucial to achieving this,” he said.

The Prime Minister earlier told reporters in Washington DC that he would encourage Mr Biden and his administration to work with its allies on clean energy, as their Inflation Reduction Act attracted major investments in the US including from Australian firms.

“My message is that they have an interest in a global reduction in emissions, that the United States can’t view these issues as just a nation state,” Mr Albanese said.

“The minerals that will power the globe in the 21st century are things that Australia has significant amounts of.”

The Prime Minister earlier told reporters in Washington DC that he would encourage Mr Biden and his administration to work with its allies on clean energy. Picture: X

The announcement is the next step in a climate, clean energy and critical minerals compact which Mr Albanese and Mr Biden signed in May. Tuesday’s roundtable was due to be the inaugural meeting of a new US-Australia task force on critical minerals.

“The road to net zero runs through Australia’s resources sector,” Resources Minister Madeleine King, who was also due to attend, said.

Later on Tuesday in Washington DC, the Prime Minister was expected to open Australia’s new embassy in the capital with US ambassador Kevin Rudd, before beginning his official visit at the White House by exchanging gifts with Mr Biden and signing the guest book.

The four-day trip will culminate in a state dinner hosted by the President, with American band The B-52s set to provide the entertainment.

Originally published as Australia seeks to reduce reliance on China with $A4bn fund for critical minerals projects