Nouveau idea: Federal Government’s key plea to France over new minerals investment

Resources Minister Madeleine King has urged France to kick start more critical minerals mining by investing in projects from scratch, to secure supply for the crucial ingredients needed to make high-tech goods.

As revealed exclusively by The Nightly, France’s Trade Minister Nicolas Forissier has dumped years of opposition to the Australian beef imports and backed the EU-Australia trade deal signed last month.

Member states and the European Parliament, and Australia’s Parliament, need to ratify the deal for it to come into force.

Ahead of the political wrangling, Mr Forissier will visit mining projects, saying France wanted to tap into Australia’s critical minerals — an industry China has a near monopoly over.

Mr Forrissier’s five-day visit to Australia will include a visit to Western Australia, Sydney and Adelaide.

Federal Resources Minister Madeleine King said she welcomed the overtures but said France would need to back them with direct investment to secure off-take agreements.

“Australia welcomes increased engagement from France in relation to critical minerals and rare earths. Australia has many important relationships with French industry. The French defence sector in particular values highly the secure supply chains Australia can provide for minerals used in advanced defence applications,” Ms King told The Nightly.

“It is sometimes not well understood that investment in projects from the beginning is what secures rights to purchase off-take in the future.”

Off-take agreements are routinely used in the resources sector.

In the case of critical minerals, they allow the buyer to secure either all or the majority of the minerals that the seller will produce when the mine is up and running, often at a set price.

This is advantageous for the buyer in the case of cost fluctuations and beneficial for the producer who might otherwise struggle to find financial backing for starting a new mining project.

Professor Brent Jackson, project co-director at the European Union Centre of Excellence on Critical Minerals, said that the cost of refining minerals and extraction remained a key challenge.

“It remains to be seen what avenues the French Government or industrial players are pursuing with this latest move on critical minerals cooperation,” Professor Jackson said.

“If France is looking to gain access to unprocessed raw materials, then facilitating direct project investment or off-take agreements are natural options.

“Off-take agreements provide long-term contracts for raw materials and aid project financing by giving investors the comfort of guaranteed future income. Strategic investment can achieve the same ends by materials buyers taking a share in a mining operator and bearing the financial risk this entails.

“Each option offers access to raw materials, but one doesn’t preclude the other. As with any commodity, the end buyer doesn’t have to own the company to buy the product – offtake agreements don’t require direct project investment.

“The challenge with critical minerals is still processing. If the French Government wants a long-term answer to supply constraints, then it needs to increase the availability of refined minerals and shore up the supply of unrefined material.

“Noting that the EU is still reliant on a single source – China – for its refined rare earth elements, without a willingness to invest in processing capability, French industry will face being at the back of a long queue or have to continue purchasing from China.”

The United States Studies Centre recently convened 45 experts from the US, Australia, Canada, Korea and Japan to discuss how to fast-track Australia’s critical minerals industry.

Hayley Channer, Director of Economic Security at the USSC, said mining companies conveyed that securing funding was their core challenge.

“Experts agreed that access to funding remains the dominant hurdle. Early engagement, careful site selection and streamlined approvals can reduce timelines, but financing remains contingent on credible offtake structures,” Ms Channer said.

“Shifting towards long-term binding off-take deals would provide greater certainty and stability for investors and industry alike.”

The French are also playing catch-up to the United States, which has already begun investing in Australian projects under the critical minerals agreement struck by Prime Minister Anthony Albanese and US President Donald Trump at the White House last year.

The US made an equity investment in the Japanese-backed Alcoa Gallium plant proposed for the company’s alumina refinery in Wagerup, Western Australia, giving it offtake rights on the gallium produced.

Ms King said she looked forward to working with France at the G7, which President Emmanuel Macron will host in June.

“I have had many productive discussions on the sidelines of G7+ ministerial fora with ministerial representatives of France, and I look forward to securing investment in Australian rare earths projects, for the benefit of the citizens of both our countries,” Ms King said.

“Under Canada’s leadership of the G7, Australia has become part of the G7 Critical Minerals Production Alliance in Critical Minerals, and I know France supports this. The French Presidency of the G7 in 2027 will provide an excellent opportunity to further pursue our work together in critical minerals.”

France has stated that strengthening the resilience of critical minerals value chains will be a priority of its Presidency of the G7.

Mr Forrissier said it was not yet clear whether Australia’s Prime Minister Anthony Albanese would be invited to the meeting at Évian-les-Bains.

So far the non-member countries that have been invited include India, South Korea, Brazil and Kenya.