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Australia Increases Critical Minerals Fund by Over $1 Billion to Attract International Investors

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Australia is expanding its critical minerals sector to address a potential fiscal shortfall caused by declining demand for fossil fuel exports in a world transitioning to decarbonization. The country’s lithium shipments amounted to A$20 billion ($12 billion) in the year preceding June, and government projections indicate that the sector’s earnings could rival those of thermal coal exports by 2028.

Prime Minister Anthony Albanese emphasized Australia’s significant reserves of minerals crucial to powering the global economy in the 21st century. He highlighted the country’s status as the world’s largest supplier of lithium, as well as its substantial amounts of cobalt, vanadium, copper, and nickel.

In addition to expanding its critical minerals industry, Australia is also seeking to reduce global dependence on China. The country has discussed the establishment of a critical minerals task force with American authorities, aimed at increasing private investment in Australia’s rare earths sector.

Prime Minister Albanese is scheduled to visit China, Australia’s largest trade partner and primary purchaser of its iron ore, on November 4.

China’s Influence on Critical Minerals

China’s dominance in the critical minerals market has spurred concerns among other nations about potential supply chain disruptions. In this context, China’s recent moves to tighten controls on graphite have raised further alarm. As countries like Australia strive to enhance their domestic critical minerals production, reducing reliance on China has become a priority.

(With files from Bloomberg)

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