China\u2019s US$120 billion global push into critical minerals is heightening risks to Australia\u2019s export dominance, as Beijing moves to diversify supply chains and reduce reliance on Australian resources.<\/p>\n
A new report from Climate Energy Finance has warned that surging outbound investment into mining and processing assets across Africa and South America is reshaping global trade flows and eroding Australia\u2019s long-held edge in key commodities including lithium and iron ore.<\/p>\n
The report finds China has deployed more than US$120 billion ($168 billion) into upstream mining and processing projects since 2023, securing supply chains and building in-country refining capacity across partner nations.<\/p>\n
Flagship developments such as the Simandou iron ore project in Guinea \u2013 set to become one of the world\u2019s largest high-grade sources \u2013 highlight Beijing\u2019s strategy to reduce its reliance on Australian exports, posing a growing structural challenge to Australia\u2019s resources sector.<\/p>\n
China recently announced plans to scrap tariffs on imports from 53 African countries from 1 May, in a bid to help create new opportunities for Africa\u2019s development.<\/p>\n
Meanwhile, Australia\u2019s limited progress in onshore processing leaves it increasingly exposed. Despite world-class reserves of critical minerals, the country remains heavily reliant on a \u201cdig-and-ship\u201d model, with minimal value-adding capacity and a shrinking manufacturing base.<\/p>\n
A 2025 KPMG report revealed Chinese outbound foreign direct investment (OFDI) into Australia had collapsed by 85 per cent since 2018, making up just 1.5 per cent of total inbound OFDI in 2024, at US$882 million \u2013 a fraction of the US$16 billion peak in 2008 \u2013 even as two-way Australia-China trade reached an all-time record of A$300 billion in 2025.<\/p>\n
The report warned this structural gap risks deepening as China scales integrated supply chains globally, increasing pressure on Australia to accelerate its shift toward higher-value industrial activity.<\/p>\n
Warning signs are already emerging, seen particularly in China\u2019s domestic lithium output overtaking Australia\u2019s, while Chinese investment into Australia\u2019s critical minerals has sharply declined.<\/p>\n
The closure of the Albemarle lithium hydroxide plant in Western Australia and a wave of threatened shutdowns across metals processing highlight mounting strain on the nation\u2019s value-added mining sector.<\/p>\n
However, CEF\u2019s authors say Australia still has a window to reposition itself. By leveraging initiatives like the A$81 billion Future Made in Australia program, expanding onshore processing, and carefully managing partnerships with China, the country could convert its resource wealth into industrial capacity, capture higher-value exports, and secure a stronger role in the emerging global green economy.<\/p>\n
Tim Buckley, CEF director and former MD of Citigroup, said Australia is sitting on some of the world\u2019s most strategically valuable resources at precisely the moment the global economy is reorganising around them.<\/p>\n
\u201cBut sitting on them is all we are doing. China is investing at extraordinary scale and speed to build out the global mining and processing capacity, supply chain integration and partner nation relationships that will define who wins and who loses in the zero-emissions economy,\u201d Buckley said.<\/p>\n
\u201cAustralia has a closing window to leverage its resource endowment, emerging renewables advantage and relationship with key Asian trade partners, including China, to transform and capitalise on the massive investment, employment and export opportunities that would result from our nation embracing a genuine green industrial future.\u201d
CEF net zero transformation analyst Matt Pollard added that the path is clear but requires decisive action.<\/p>\n
\u201cThe same model China has used to build green industrial capacity across the global south is available to Australia, but a significant strategic shift of how Australia views its national interest and economic security must occur for Australia to realise this immense opportunity,\u201d he said.<\/p>\n
\u201cTwo-way trade with China reached a record A$300 billion in 2025, and Australia\u2019s economy remains deeply complementary to and broadly aligned to benefit from China\u2019s green industrial strategy.<\/p>\n
However, this complementarity is an asset that Australia has long undervalued, underrecognised, and underleveraged.\u201d<\/p>\n
Associate Professor Marina Yue Zhang from the Australia\u2013China Relations Institute emphasised the strategic stakes.<\/p>\n
\u201cThe race to net zero is not only a race for technological innovation, but also for minerals, metals, processing capacity, and industrial control. As the report finds, China\u2019s outbound investment strategy has moved well beyond simple resource extraction towards a more integrated model linking resource acquisition with processing, infrastructure, manufacturing, and long-term industrial partnerships.\u201d<\/p>\n
She said the policy implication for resource-rich countries such as Australia is clear.<\/p>\n
\u201cThe challenge is not blanket exclusion, but the development of clearer policy settings and national objectives so that foreign investment, including from China, can be assessed according to whether it supports domestic value-adding, industrial capability, and long-term national interests.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"China\u2019s US$120 billion global push into critical minerals is heightening risks to Australia\u2019s export dominance, as Beijing moves…\n","protected":false},"author":2,"featured_media":548416,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[64,63,512,8268,73846,40444,6827,44],"class_list":["post-548415","post","type-post","status-publish","format-standard","has-post-thumbnail","category-australia","tag-au","tag-australia","tag-china","tag-critical-minerals","tag-iron-ore","tag-lithium","tag-mining","tag-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/548415","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=548415"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/548415\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/548416"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=548415"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=548415"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=548415"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}