The Albanese government is doubling down on its commitment to the Gina Rinehart-backed Arafura Rare Earths with a $200 million equity investment that will take taxpayers’ exposure in the company to more than $1 billion.

In its biggest outlay to date, the $15 billion National Reconstruction Fund will announce on Wednesday it has agreed to take a cornerstone stake in the rare earths player, which the government hopes will help break China’s stranglehold on global critical minerals supply.