Anthony Albanese offers $1.2b to buy critical minerals and sell to trusted partners amid US, China trade war

Prime Minister Anthony Albanese will spend at least $1.2 billion buying critical minerals for a new stockpile which would then be offered up for sale to key global partners in a move aimed at breaking up China’s global dominance of the sector.

Mr Albanese will use his address to The West Australian’s Leadership Matters forum on Thursday to detail the new Critical Minerals Strategic Reserve he wants to set up as part of Australia’s response to US president Donald Trump’s “reciprocal” tariffs.

The reserve and priority access to critical minerals have formed part of Australia’s discussions with the US over recent weeks.

Mr Albanese said the move would give greater industry certainty when getting projects off the ground and would also boost Australia’s standing as a trusted and reliable trading partner.

“Throughout this campaign, we’ve all been reminded that this is a period of significant global uncertainty. That is the reality our nation has had to manage for the past few years — not just the last few weeks,” he is expected to say in his address.

“Our Government has chosen to deal with these global challenges the Australian way. Not stepping back and leaving people to go it alone, but by stepping up.

“At a time when so much is unpredictable, this is one area where we know for sure which way the world is headed.

“The terrain is all mapped out. Now, we have a once-in-a-generation opportunity to stake Australia’s claim.”

China has nearly cornered the market in critical minerals and their processing for use in technology, including for computer chips and clean energy production.

But it has also proven an increasingly unreliable trading partner, slapping export bans on vital resources and flooding other markets to tank prices.

Both Trump administrations and the Biden White House grappled with how to reshape the global market dominated by a single country and other nations are looking to do the same.

Australia wants to show it isn’t waiting for someone else to fix the problem but is stepping in to offer a solution, a senior government source said.

The announcement of the strategic reserve blindsided the resources sector as The West revealed at the start of April, with Mr Albanese promising to reveal more details later in the campaign trail.

That details has now been released with the reserve to comprise of national off-take agreements — which are deals for the Government to buy a set volume at a set price it would onsell, although the intention is not to make money.

It would also include additional, smaller stockpile the Government can hold of critical minerals to ensure domestic supplies or if there is particular volatility in the market.

It doesn’t aim to directly subsidise existing production or new commercial investment, but to offer certainty about pricing and demand.

The agreements would be used for a “priority sub-set” of the 31 critical minerals found in Australia, starting with those most important for artificial intelligence and tech-manufacturing.

Mr Albanese said the stockpile would be “relatively small and time-limited” but would be an “important safeguard against market pressure as well as interventions from other nations”.

“It means Australia has the power to sell at the right time, to the right partners, for the right reasons,” he said.

“It will mean we can deal with trade and market disruptions from a position of strength because Australia will be able to call on an internationally significant quantity of resources in global demand.”

While the Government has been in talks with the US about critical minerals supply chains, Mr Albanese is also expected to flag that other trusted international partners may include Japan and Korea.

“Our strategic reserve will be a national asset – and our Government will use it to advance Australia’s national interest,” he said.

“I’m optimistic about Australia’s future, if we seize the opportunities ahead of us. And nowhere offers greater cause for optimism or a stronger sense of opportunity than right here in Western Australia.

“WA is central to Labor’s positive plan for building Australia’s future. And WA is vital to Australia’s success in the world.”

The strategic reserve adds to the already legislated production tax credits for critical minerals processing to give resources companies more certainty about their investments.

Resources Minister Madeleine King said the reserve, combined with the tax credits and an expansion of the Critical Minerals Facility showed how seriously the Government took the development of Australia’s critical minerals industry.

“That means more investment and more jobs for Western Australia,” she said.

Opposition leader Peter Dutton has said he would scrap production tax credits and open up a critical minerals financing facility to gas companies.

Mr Albanese will also use his speech to announce the Commonwealth will contribute $2.5 million to the Cook Government’s pledge to buy back the WA freight rail network.

“As part of our Labor Government’s commitment to WA, we are prepared to take direct control of those parts of the network that the Liberals privatised, including the Eastern Goldfields Railway,” Mr Albanese will say, promising this will ensure the line is maintained with costs cut for producers and consumers.

The Prime Minister headed to Collie and Mandurah on Wednesday, arriving in WA for his third visit of the election campaign and 32nd since he won office.

He has visited every electorate in WA over the past three years.