Accelerating geo‑economic competition to control supply chains for critical minerals is disrupting global markets and threatening security. Resource-rich Australia is delicately positioned between rival great powers but also faces unique opportunities to increase its influence in global markets and reap the economic benefits.
How Australia manages multiple supply chain risks and leverages its leading position in minerals investment and production at home and abroad will be key to determining success in enlarging and diversifying its markets and geo-economic positioning.
Industrialised nations that depend on critical minerals as inputs for advanced manufacturing are hastening efforts to build new supply chains that do not depend on China-based processing. But they have been slow in committing to the new mechanisms needed to enable investment in alternative minerals production.
ASPI’s new report—Disruption and opportunity: Australia and critical minerals in a changing global order—examines evolving international supply chain initiatives while challenging an assumption that the very active efforts by the United States to build alternative critical minerals supply will deliver for Australia a substantial alternative market to China.
The report finds that that the US is unlikely to evolve into a major minerals market for Australia, despite being its largest investment partner and most consequential strategic ally. While the US offers some niche opportunities for certain critical minerals such as rare earths, China is a much, much larger overall resources market for Australia that will remain vital to the Australian mining industry and economy. Japan and South Korea follow in market importance, with the European Union and India offering potential but slow to take action to invest and commit to minerals offtake.
What is clear is that Australia is well positioned to take advantage of minerals supply competition with its world‑leading geological endowments, a global footprint of successful mining operations, and hard‑won capabilities built over more than 60 years of modern mining and processing. Australian companies aren’t just domestic producers; they’re global investors, operators and technology leaders. Demand for their products is only rising as the energy transition, digitisation, automation and defence modernisation accelerate.
But market opportunity alone is not enough. Australia’s ability to convert its mineral strength into strategic advantage is being tested by volatile global prices—often shaped by market manipulation—contradictory and changing policies among like‑minded nations, and rising competition from other mineral‑rich nations. Domestically, high construction and energy costs, an uncompetitive company tax system, acute skills shortages, regulatory uncertainty and long approval timelines threaten to blunt Australia’s competitive edge.
While commercial and security partners across Europe, Asia and North America increasingly look to Australia not only for resources but also for leadership—technical, environmental, commercial and strategic—progress has been slow in turning desire into minerals demand.
Many countries, along with the EU, have signed agreements with Australia to build more secure, sustainable and diversified critical‑minerals supply chains. Yet too many of those agreements remain aspirational, overtaken by market realities or stalled by implementation hesitancy.
Australia and its partners must now pivot from signing partnerships to fully activating them. That means prioritising the partners and markets where real supply‑chain integration and volume markets are achievable. Japan and South Korea—longstanding, high‑trust customers and investors—remain central.
Britain and EU nations offer so far unmet potential for deeper integration. India presents opportunity, albeit with high transaction costs.
Canada, Australia’s closest minerals peer in scale, global investment reach, capability and commitment to sustainable mining, should be treated not as a competitor but as a strategic collaborator in shared supply‑chain development. Working together, the two middle powers can wield greater market and geopolitical influence.
Crucially, Australia must recalibrate its approach to onshoring. While value‑added processing remains desirable, policies built solely around domestic downstream ambitions risk underestimating the reality of global supply chains and overestimating Australia’s cost competitiveness.
The more strategic path is to position Australia as a dominant force across multi‑node critical‑minerals supply chains—linking Australian concentrates and intermediate products; production of Australian companies operating abroad; trusted partners’ processing, manufacturing and technology ecosystems; and, of course, end users.
While the US remains a vital investment and trade partner across all sectors, its volatile geo‑economic posture means Australia shouldn’t expect to expand minerals supply into the US market relative to other destinations. Australia should pursue the US market and implement the 2025 minerals investment agreement, while simultaneously doubling down on other markets where trade, investment and policy alignment offer a clearer pathway to scale.
To seize this moment, Australia should also restore the predictability and competitiveness of its own investment environment. That means streamlining approvals, ensuring reliable energy at competitive prices, investing in infrastructure and skills, reforming the tax system and reviving productivity growth. Without those fundamentals, even world‑class geology, capability and environmental standards can’t guarantee a world‑class industry.
Ultimately, the choice before Australia isn’t whether to be a critical‑minerals superpower; it’s whether to be an indispensable node in the world’s most important supply chains. That requires ambition, disciplined policymaking, deeper strategic partnerships and a relentless focus on execution.