Much more needs to be done for Australia to produce and process the critical minerals and rare earths the world needs for rapid electrification, the industry says.
Taxpayers will invest $500 million in critical minerals projects in northern Australia under a long-awaited federal strategy for increasingly in-demand clean energy commodities.
By processing more onshore, the plan released by Resources Minister Madeleine King on Tuesday aims to position Australia as a leader in the global supply chain for electric cars and new energy.
Iluka Resources boss Tom O’Leary told AAP Australia has a "once-in-a-generation opportunity" to usher in a new era of sovereign capability, value addition, high-skilled jobs and economic growth.
He welcomed the inclusion of rare earth magnets as an initial priority technology.
"We cannot meet our decarbonisation and national security objectives without them, which is why a diverse, resilient and sustainable supply chain is a global priority," Mr O'Leary said.
Minerals Council CEO Tania Constable said the strategy was a "leap forward", but warned Australia needed an integrated industry plan and less red tape around new investment.
The federal government will support the sector across six focus areas, including with communication, co-ordination, regulation and financial support, and focus on minerals that are used in priority technologies.
Metals firm Nyrstar said the "timely" strategy recognised critical minerals industries may need transitional support to deliver metals needed for Australia’s low-carbon future.
"Tackling disruption requires a different approach and this is what we have seen with the critical minerals strategy’s new and welcome emphasis on processing as a key part of Australia’s critical minerals endeavour," Nyrstar co-CEO Dale Webb said.
The plan calls for vigilance to protect solid sustainability credentials as a major point of difference for Australian exports in the global market, "without imposing undue costs or inefficient processes".
Supply-chain due diligence and traceability of critical minerals are becoming increasingly important for producers and consumers, who are concerned about climate change and modern slavery.
Australia must also balance the impacts of existing energy-intensive extraction, concentration and processing critical minerals projects, with a commitment to net zero emissions by 2050.
Australia is the world’s biggest producer of raw battery minerals, but has a modest share of the global markets for processed minerals and high-purity battery precursors.
The strategy calls for Australia to boost downstream processing and manufacturing by attracting investment from global firms.
The Australian Made Battery Plan will use the significant endowment of critical minerals to build a domestic battery manufacturing capability.
Some $500 million of new investment via the Northern Australia Infrastructure Facility is the first decision taken under the strategy, Ms King announced at Geoscience Australia in Canberra.
Betashares responsible investments director Greg Liddell said the announcement set "a floor, not a ceiling" for the level of federal commitment, because other countries are also chasing a greater presence in this important sector.
Ms King said increasing exports of critical minerals and energy-transition minerals could create more than 115,000 new jobs and add $71.2 billion to GDP by 2040.
And that could swell to 262,600 jobs and the GDP boost surge to $133.5 billion by 2040 if Australia builds downstream refining and processing capability and secures a greater share of trade and investment.
The strategy adds to finance through the $2 billion Critical Minerals Facility and a slice of the National Reconstruction Fund, and grants for early- to mid-stage projects.
But the package falls short of the tax breaks and support available in the US, as advanced economies race to secure a supply chain and break China's stranglehold on factory-ready minerals.
Ms King acknowledged international competition for investment in critical minerals was intense, with incentives announced by the US and European Union to decarbonise their economies.
The strategy will also establish a process to update the critical minerals list, which the industry says should be updated regularly amid a rapidly changing global economy.
