This week, Australia and Japan signed multiple agreements to level up cooperation on critical minerals, energy and defence. As part of this, the two governments signed a Joint Statement on Elevated Critical Minerals Cooperation.
Critical mineral supply chains are highly concentrated in China and a few other dominant producers, which creates risks for Australian resource producers and downstream Japanese manufacturers. The Joint Statement reflects a growing commitment from both sides to collaborate on unlocking new sources of supply, earmarking $1.67 billion in co-investment which is expected to be directed to six high-potential Australian critical minerals projects.
This investment, which includes $1.3 billion from the Australian Government and $370 million from the Japanese Government, is a welcome boost to global efforts to diversify critical mineral supply chains. But maximising this investment requires:
- Patient, long-term capital – Mining projects are capital-intensive and can take several years to set up, meaning more investments could be required down the track to unlock production.
- Demand scale and certainty – To unlock supply, projects need demand scale and certainty. This could require investments into Japan’s downstream processing and manufacturing of critical minerals, batteries, and semiconductors to scale up demand.
- Stable and accurate prices – Even if new production comes online, many projects are at risk of price volatility and manipulation. Both governments should consider where minimum price floors, such as the one agreed between Lynas and Japan Australia Rare Earths, could be necessary to shield producers from unstable prices.
The following six projects were identified for funding.
1. Lynas Rare Earths – Mt Weld Mine, WA
- Mineral(s): Light and heavy rare earth elements
- Production capacity: 10,000 tonnes
- Project value: $2.69 billion
- Leading producer: China, 90% of global supply
Lynas’ Mt Weld rare earths mine is a flagship collaboration between Japanese investors and Australian industry on critical minerals. In September 2010, China banned the sale of rare earths to Japan during a dispute over the Senkaku Islands in the East China Sea. This led the Japanese Government to search for alternative supply options.
In 2011, Sojitz Corporation and the Japanese government agency, JOGMEC, invested in Lynas Rare Earths to commence light rare earth production. In 2025, the project became the only producer of heavy rare earths outside of China.
Rare earth elements are a collection of 17 elements that typically occur together in geologic deposits. While rare earths are prevalent across Australia and other resource-rich countries, their complex and expensive processing requirements has limited commercial opportunities outside of China. Rare earth elements are essential for high-performance magnets and alloys required for wind turbines, semiconductors, and a range of defence technologies.
2. Alcoa - Gallium Recovery Project, WA
- Mineral(s): Gallium
- Production capacity: 100 tonnes
- Project value: $307 million
- Leading producer: China, ~100% of global supply
Alcoa, which owns a major alumina and aluminium supply chain across Western Australia, is working with investors from Japan and the United States to develop gallium recovery capabilities at one of Alcoa’s operating alumina refineries.
Gallium is a critical component for semiconductors, modern radars and missile defence systems, and solar cells. Gallium also a ‘byproduct’ mineral – it does not exist in high enough concentrations to be mined on its own. Instead, gallium is almost exclusively produced as a byproduct of alumina or zinc refining.
3. Magnium Australia – Collie Magnesium Project, WA
- Mineral(s): High-purity magnesium
- Production capacity: 3,000 tonnes
- Project value: $70 million
- Leading producer: China, ~100% of global supply
Magnium Australia is planning the commercial production of high‑purity magnesium in Western Australia. The project uses a unique technology, commercially developed with the CSIRO, which produces clean and sustainable magnesium from waste resources.
Magnesium is widely used in lightweight applications including the automotive and aerospace sectors, and Japanese researchers have demonstrated its potential as a battery mineral.
4. Tivan – Speewah Fluorite Project, WA
- Mineral(s): Fluorite
- Production capacity: 150,000 tonnes
- Project value: $236 million
- Leading producer: China, 60% of global supply
The Speewah Fluorite Project, located in Western Australia, is a Japanese Government‑supported initiative involving a joint venture between Sumitomo Corporation and JOGMEC, in collaboration with Tivan Limited, to produce acid‑grade fluorite.
Fluorite (sometimes referred to as fluorspar) is the quiet achiever of the lithium-ion battery boom. It is a vital input into the batteries that power electric vehicles, and analysts project a major supply shortfall for the mineral. Additionally, it’s used in strategic sectors like aluminium and steelmaking.
5. RZ Resources – Copi Critical Minerals Project, NSW
- Mineral(s): Titanium, zircon, rare earth elements
- Production capacity: 400,000 tonnes
- Project value: $977 million
- Leading producer: China, 70% of global supply
The Copi Critical Minerals Project is a major mineral sands project set to supply titanium, zircon and rare earth elements. In late 2025, the project secured a letter of interest from the US EXIM Bank and Australia’s Export Finance Australia which earmarked US$450 million in investment.
Titanium has the highest strength-to-weight ratio of any metal – it is as strong as steel but 45% lighter, and it is exceptionally resistant to heat and corrosion. This makes it crucial to a series of aerospace and defence technologies.
Zircon is predominately used in ceramics and civilian purposes. However, it is also a key component in cladding used in nuclear reactors – a central part of Japan’s energy mix.
6. Ardea Resources - Kalgoorlie Nickel Project, WA
- Mineral(s): Nickel, cobalt
- Production capacity: 30,000 tonnes
- Project value: $3,117 million
- Leading producer: Nickel - Indonesia, 40% of global supply
Cobalt – China, ~80% of global supply
The Kalgoorlie Nickel Project – Goongarrie Hub is one of the largest nickel-cobalt resources in Australia. The project is being developed as a joint venture with Ardea Resources, Sumitomo Metal Mining, and Mitsubishi Corporation.
The project was recently selected as part of the Australian Government’s Investor Front Door pilot program, which aims to fast-track regulatory approvals. The project could help revive Australia’s nickel industry which collapsed when global markets were flooded with low-cost Indonesian supply.
Nickel and cobalt are both important battery minerals used to power electric vehicles and long-range drones. Nickel is also a key catalyst in electrolysers used to produce green hydrogen.
