Resources Minister Madeleine King has indicated that establishing a floor price for Australia’s critical minerals is still in the early stages. The strategy, unveiled at the Diggers and Dealers event in Kalgoorlie, aims to support local developers against foreign market price manipulation. This move follows the government’s previously announced strategic critical minerals reserves initiative, which has garnered significant industry interest. Lynas, an Australian mining company, is participating in a government-led taskforce consulting on how the strategic reserve might look.
Australia is positioned as a vital alternative source of critical minerals and rare earths as countries seek to reduce reliance on China. These minerals are essential for various modern technologies, including clean energy solutions, automotive manufacturing, and defence applications. The proposed mechanism would provide price certainty for critical mineral producers through national offtake agreements. The government believes that pricing certainty reduces exposure to volatile and opaque markets, particularly as global tariffs increase.
Minister King emphasised the need for in-depth discussions to establish an acceptable floor price. The considerations include offtake agreements and stockpile arrangements. The selection of which elements to include in the program is also under consideration, acknowledging that not all 31 critical minerals can be accommodated. The minister stressed that the government must lead in developing global critical minerals and rare earths opportunities.
King stated that without government intervention, Australia risks having a one-way supply chain, which is detrimental to its geostrategic and national interests. She added that Australia’s unique geology has the potential to create jobs, support communities, and advance modern manufacturing. The government-led taskforce is actively exploring different approaches to establishing the strategic reserve, including various stockpile options and offtake agreements, in collaboration with industry stakeholders.
