Anthony Albanese unveils millions for critical minerals projects to fend off Chinese supply chokehold

With Beijing dominating the rare earths market, the Prime Minister is set to step up investment.

The Albanese government has doubled down on its attempts to push back against China’s chokehold on the critical minerals supply chain, announcing it will pour $585m of taxpayer funds into projects producing key inputs for batteries, renewables and electric cars.

Queensland-based Alpha HPA, which specialises in the production of ultra-high purity alumina used in LED lighting, semiconductors and lithium-ion batteries, will receive $400m in new loans to establish a processing facility in Gladstone.

The federal government will also back South Australian graphite hopeful Renascor Resources, fast tracking a $185m loan originally unveiled by the Coalition in 2022 to develop production at its Arno Bay mine on the state’s Eyre Peninsula for use in the global electric car and renewable energy industries.

Alpha HPA, which specialises in the production of ultra-high purity alumina, with receive $400m new loans. Picture: Supplied

The cash splash follows an $840m package to Gina Rinehart-backed Arafura Rare Earths to support the mineral exploration company develop its Northern Territory-based mining and refinery, and brings taxpayer exposure of critical mineral exploration and processing to well in excess of $2bn.

Travelling to Gladstone on Wednesday, Prime Minister Anthony Albanese will unveil the details of the investments, which will be funded through the government’s $4bn Critical Minerals Facility.

The investments will form part of Labor’s Future Made in Australia Act, which covers a wide range of existing policies including the $15bn National Reconstruction Fund and green subsidies for manufacturing, designed to bolster economic sovereignty.

“The global race for new jobs and new opportunities is on. Our government wants Australia to be in it to win it,” Mr Albanese said in a statement.

“These two critical minerals projects will help secure good and secure jobs in manufacturing, and clean, reliable energy.”

Amid a collapse in rare earth prices, Renascor has seen its share price plunge by nearly 70 per cent. Picture: Supplied

The support is expected to create a combined 445 ongoing jobs across Queensland and South Australia and comes at a critical juncture for the rare earths industry, after prices for key commodities plunged last year.

Although prices, particularly for nickel and lithium appear to have bottomed out, they still remain near multi-year lows, dragged down by exploding Chinese production and weaker-than-expected demand.

Alpha HPA has avoided the sell-off that has befallen much of the critical mineral industry, but Renascor’s share price has crashed almost 70 per cent, sliding from 25c in April 2023 to 8c a year later.

Volatile commodity prices and significant production costs have made it difficult for the industry to secure finances, leading a number of miners to mothball projects.

Lynas, the only key supplier of the critical minerals outside China, won financial backing from Washington as the US seeks to firm up its own supplied. Picture: Supplied

With China dominating the global rare earths’ market, Canberra has rapidly accelerated investment in critical minerals production in recent years to compete with Beijing’s near-monopoly over the industry.

Similarly, the United States has also sought to firm up its own critical mineral supplies, rolling out tax incentives, grants and loans to projects via President Biden’s Inflation Reduction Act.

In 2023, the US Department of Defense awarded Australia’s own ASX-listed critical minerals producer Lynas Rare Earths a $US258m contract to construct a processing facility in Texas to produce “heavy” rare earths.

Trade Minister Don Farrell said the government investment in critical minerals would help bolster local industry and position Australia as a supplier to key international markets.

“These projects will create hundreds of high-paying local jobs and manufacturing opportunities, while also helping to diversify Australia’s critical minerals exports with new opportunities to supply into Japan, Korea and beyond,” Senator Farrell said.

Originally published as Anthony Albanese unveils millions for critical minerals projects to fend off Chinese supply chokehold