Background
On 2 December 2025, the United States Studies Centre (USSC) hosted a Track 1.5 Policy Dialogue, Building Supply Chain Resilience in Critical Minerals: The Path Ahead. The third of three dialogues in the USSC ‘Economic Security Dialogue Series’, the meeting convened around 45 experts from Australia, Japan, South Korea, Canada, and the United States from across government, mining, finance and academia to identify solutions to shared challenges. This report provides an overview of key perspectives discussed throughout the day. The USSC wishes to thank the Department of Industry, Science and Resources (DISR) and Export Finance Australia (EFA) for their generous support for this dialogue.
This report captures perspectives expressed at the Dialogue in December 2025 across multiple stakeholder groups: government, diplomatic representatives, industry, finance, think tanks, and academia. There were no collective recommendations and the assertions in this report do not necessarily reflect the views of the Commonwealth of Australia. The Commonwealth of Australia does not accept responsibility for any information or advice contained herein.
1. Perspectives from around the world: Challenges and solutions
In an era of economic uncertainty, including the weaponisation of trade and supply chain disruption, critical minerals are increasingly seen as strategic defence assets. The vital role of critical minerals in the technology, clean energy and defence sectors means that the concentration of critical minerals production in any one country presents a significant national security threat to countries relying on access to these materials. China’s dominance in refining and processing, with a market share averaging 70%,1 combined with its proven willingness and capacity to ‘turn the tap off’ at any time, has made it necessary for offtake parties to diversify their supply chains.
There is no single approach to critical mineral supply chain diversification: differing national priorities, existing economic endowments, and levels of supply chain risk dictate diverse strategies. While approaches differ, all governments face some common challenges:
- Priority setting, particularly around which mineral supply chains to focus on first. Some governments, such as the South Korean Government, prefer to focus on a smaller number of minerals, while others hesitate to focus too narrowly due to the risk of investing in minerals that may lose relevance with future innovations.
- Where in the supply chain they should intervene. For producing countries like Australia and Canada, the question is how far down the supply chain should they invest. For consuming countries like the United States and Japan, the question is how far up the supply chain should they invest.
- Balancing environmental, social, and governance standards while fast-tracking project permits and development.
Furthermore, the dialogue highlighted the importance of allied countries coordinating investments and actions. Without coordination, there is a risk that producer countries could compete with each other on a narrow set of minerals, potentially cannibalising these investments. On the other hand, consumer countries such as the United States, member states of the European Union and Japan could compete to secure long-term access to ex-China supply and risk pushing each other out of the market. This dual competition risks allies and partners undercutting each other, necessitating a more coordinated approach to ensure that nations do not undermine each other's strategic priorities.
The concentration of critical minerals production in any one country presents a significant national security threat to countries relying on access to these materials.
Despite differing national priorities and goals, a certain degree of alignment exists amongst the countries represented. There is shared recognition that time is of the essence. Nations must transition from high-level framework agreements to tangible implementation, which requires streamlined domestic permitting and processing to accelerate project delivery. Additionally, it is necessary to develop national competitiveness through targeted investments in education, research and development. Finally, all countries see the necessity of cooperation through inter-departmental coordination and robust public-private partnerships.
National critical mineral priorities of Dialogue participants
Depending on various geological, geographical, and economic factors, each nation has different priorities and approaches to securing critical minerals.
Australia
In Australia, a mineral-rich country with deep mining expertise, the goal is to leverage its natural endowment of minerals, develop processing and refining abilities to move up the value chain, and work with partners to reduce market concentration. As laid out by the 2023-2030 Critical Minerals Strategy, Australia’s priorities are fourfold: invest across the entire critical minerals lifecycle, from exploration to project development; build downstream processing and refining capabilities to capture more of the value chain; strengthen research and development; and foster cross-institutional collaboration with partners.2
Canada
Canada’s critical minerals strategy largely focuses on leveraging multilateral and bilateral partnerships to expedite progress in the development of secure, standards-based, critical minerals supply chains. A key vehicle of this is the Canadian-led Critical Minerals Production Alliance. Since its inception in June 2025, this production alliance has taken rapid action, including making 26 investments into critical minerals projects.3 Further, Canada is also looking to accelerate domestic mining projects through streamlining regulations and project permitting and helping match miners up with manufacturers to fill the gap between demand and supply. Similar to Australia, Canada is also seeking to build domestic refining and processing capabilities to capture more of the value chain.
Japan
As an early mover in critical minerals supply chain diversification, Japan prioritises speed in enacting framework deals and close collaboration with like-minded and mineral-rich partners, namely Australia and Canada.4 Japan has invested in multiple nodes in the supply chain across the world to diversify its supply, with a specific focus on derivatives for its domestic permanent magnet industry.5 Japan views public-sector support mechanisms as a key market signal for private sector buy-in, necessitating a demonstrated and decisive public commitment to critical minerals projects. Ultimately, Japan’s perception is that market mechanisms are not enough; countervailing and coordinated policies are needed and urgent.
South Korea
Compared with partner countries, South Korea has taken a more focused approach, prioritising 10 strategic critical minerals from a broader list of 33 minerals.6 These 10 minerals are deemed most essential for South Korea’s downstream market, including semiconductors, batteries and other high-end technology. With an extremely high dependence on mineral imports, South Korea is seeking to enhance domestic capabilities such as recycling, separation, refining, and research and development, while deepening collaboration with partners.
The United States
The United States seeks to urgently create new supply chains by accelerating domestic production through deregulation, fast-track permitting, and strengthening international cooperation with partners in areas where America does not have adequate domestic reserves. The US approach is to boost investment domestically by potentially implementing price mechanisms, streamlining processing and permitting, and reacquiring domestic expertise in mining and refining. A core aim of the United States, as articulated in the US–Australia Framework for Securing of Supply in the Mining and Processing of Critical Minerals and Rare Earths, is to ensure that sales of critical minerals assets and recyclable components remain within an ‘allies and partners’ ecosystem.7
2. Considerations for the Australian Government
Australia stands poised to be a significant player in the critical minerals value chain, with some of the world’s largest recoverable resources of minerals (Figure 1), deep mining expertise and technical know-how.8 However, success is not guaranteed; Australia faces distinct challenges that need to be addressed, including a market characterised by opaque pricing and inconsistent demand, high energy and labour costs, lengthy delivery timelines, and limited processing infrastructure and capabilities.
Domestically, Australia will need to act decisively to build sovereign capability and resilience. Thought should be put towards prioritising a narrow set of minerals based on strategic importance and relative commercial attractiveness to meet the national security requirements of pace and scale. Gallium, antimony, germanium, titanium and heavy rare earth supply chains were highlighted as high priorities (despite small volumes), particularly for defence applications.
To pave a path forward for Australia, key recommendations from the day’s discussion included:
- Improving project ‘investability’ through public-private risk-sharing mechanisms.
- Accelerating project delivery through streamlined approvals.
- Taking a whole-of-government approach to mitigate bottlenecks.
- Building sovereign capabilities through additional research and development funding.
Perspectives varied as to what role the Australian Government should play in the critical minerals market. The general consensus was that the industry cannot compete in the existing market conditions due to China’s artificial price suppression and dumping. In this context, the Australian Government has a critical role to play in derisking what is currently a state-dominated quasi-market, whether through commitment of support, loans or taking equity stakes in projects.
The Australian Government has a variety of tools in its toolkit to support industry. Successful mining projects typically require a combination of equity, debt, and secure offtake arrangements and government intervention can be targeted at any of these components. One option is for the Australian Government to take an equity stake in projects, following the example of the US Government’s acquisition of equity stakes in MP Materials and USA Rare Earths.9 Equity participation can provide strong market signalling and the potential for upside returns, but it also exposes the government to higher risk.
The Australian Government can also support projects through debt financing, such as concessional or long-term loans.10 Debt carries lower risk but also lower returns; it is particularly well-suited to critical minerals projects, which are capital-intensive and require patient, long-term financing. Canberra can also reduce offtake risk by supporting investment certainty through price guarantees, possibly through its Strategic Minerals Reserve.
Lastly, the Australian Government is providing tax incentives through the Critical Minerals Production Tax Incentive scheme to encourage companies to invest more in processing and refining. These tax credits are scheduled to take effect on 1 July 2027. While data on business intentions to uptake this incentive is not currently available, there have been promising developments in by-product refining of antimony at Nyrstar’s Port Pirie lead smelter which should benefit from the tax incentive when it takes effect.11
Within the Australian Government’s financial toolkit, Export Finance Australia (EFA) is seen as central in absorbing risks that commercial lenders refuse to take on, thereby increasing the attractiveness of projects to the private sector. Export credit agencies are able to take on higher risk profiles and provide long-term patient capital, which is particularly suited for critical mineral projects. Further leveraging EFA to invest in Australian critical mineral companies long-term, both internally and externally, will be key to increasing domestic production.
Public funding, however, should not mimic private investment but instead seek to “crowd-in” private capital by absorbing risks the market is unwilling to bear, particularly in early-stage development, construction and coordination risks. Considering some of the risks associated with critical minerals projects, namely the lack of demand-side scale and price volatility, financiers expect a higher rate of return for these projects compared to iron ore or copper mining. Well-designed government involvement can signal confidence, improve bankability and unlock private investment. Ultimately, governments should focus on absorbing risk to enable private investment, rather than focus on offsetting public spending via the potential commercial returns.
Leveraging Export Finance Australia to invest in Australian critical mineral companies long-term, both internally and externally, will be key to increasing domestic production.
There is broad consensus that Australia cannot and should not pursue a unilateral strategy. Rather, it must coordinate with its partners and leverage its existing multi- and minilateral mineral networks. Collaborating with fellow producer countries, such as Canada, offers significant opportunities to specialise across the value chain and share technical expertise between their national science agencies. Additionally, partnerships with mid-to-downstream countries (like the United States and Japan) provide avenues to channel strategic capital into Australian mineral projects for mutual benefit. This cross-border diffusion of knowledge will be instrumental in building a resilient global talent pool of technical specialists and accelerate innovation.
The swift implementation of cooperation agreements, notably the US-Australia Framework deal, will lay the foundation for successful future cooperation. The US-Australia Framework was signed in October 2025 to strengthen bilateral cooperation between the two countries. The agreement commits both governments to each provide US$1 billion in financing for minerals projects within six months of signing (by April 2026).12 However, implementation could require some key enablers, including the development of a fair market price, the adoption of price collars (floors and ceiling prices), partnership on geological mapping and the successful coordination of different national export credit agencies.
3. Increasing supply: Supporting Australia’s domestic mining industry
Despite a wealth of mineral resources, Australian critical mineral mining companies face significant structural hurdles, primarily driven by global market conditions. The industry’s reliance on the Asian Metals Index (AMI),13 which is used to set offtake agreements and pricing contracts, was raised as a key barrier to unlocking supply. The AMI is characterised by its opaque pricing structure and recent significant price swings, means that there is a lack of pricing control. At 2025 price levels, this makes market entry for small companies nearly impossible.14 This is compounded by production quotas in China that exceed domestic demand, resulting in market dumping that artificially depresses the price and reduces profits for other market players.15 Due to these dynamics, there is a mismatch between producer output and customer price expectations.
The Australian private sector participants broadly agreed that establishing a transparent, non-China pricing mechanism would create more stable and equitable market conditions. However, achieving this presents significant obstacles. The primary challenge is convincing customers to accept prices not anchored to the AMI. This requires making a compelling case that national security considerations justify higher costs; companies must understand that choosing solely based on lower prices means sacrificing supply chain security. Additionally, as with any new pricing mechanism, customers will be hesitant to trust the prices until there is an adequate pricing history, meaning it will take time to fully institute. Government can support this effort by developing a strategic narrative that articulates the risks associated with continuing to do business with state-dominated monopolies.
The industry’s reliance on the Asian Metals Index, which is used to set offtake agreements and pricing contracts, was raised as a key barrier to unlocking supply.
There was broad scepticism that current market prices could incentivise sufficient new production. The establishment of price mechanisms — namely, price floors — would provide greater certainty to both mining companies and investors that they will receive a return on their investment. This would allow for risk-sharing between the government and the private sector, help underwrite the risk assumed by investors and support the development of Australia’s domestic industry.
Some industry participants expressed support for the coordinated implementation of tariff barriers by partners and allies on Chinese supply to allow Western producers to compete on price and give industry time to build up supply. Tariff barriers would help to price in the cost of a secure supply of minerals, insulating from price manipulation by China, and allow for the creation of a standards-based market. Australian government officials expressed that tariffs are not a part of the Australian Government’s policy toolkit due to the potential impacts on domestic industry and cost of living. Other tools at the government’s disposal, such as strategic finance, strategic reserves, setting global standards and international partnerships, continue to be the preferred approach.
The other core challenge articulated by mining companies was securing funding. While permitting can delay projects, experts agreed that access to funding remains the dominant hurdle. Early engagement, careful site selection and streamlined approvals can reduce timelines but financing remains contingent on credible offtake structures. Shifting towards long-term binding offtake deals would provide greater certainty and stability for investors and industry alike.
4. Creating an investment ecosystem: Enabling public-private partnerships
For projects to receive adequate funding, government programs and private capital will need to work in lock step to create an investment ecosystem. In its current state, the market faces three core challenges: long project timelines, differing jurisdictional oversight and market distortions. As a result, private capital is hesitant to make investments, and public sector investment alone is not sufficient to bridge the gap. From a private capital perspective, two needs must be met to facilitate investment: projects must be adequately de-risked and must be profitable.
Time is a central consideration for private investors: the further in the future returns are realised, the less attractive an investment becomes. At present, many projects are viewed as too slow and too costly, decreasing investor appetite. Shortening project timelines is therefore critical. A first step is to deconflict local, state and federal permitting requirements and streamline them into a single, coordinated approvals process. This single window permitting approach reduces regulatory burden and minimises delays, significantly improving investor confidence.
Equally important is ensuring projects are bankable. Investors need confidence that projects have access to the financing required to deliver infrastructure on time and on budget. This is where government can play a critical role, supporting projects at early or higher-risk stages where the private sector is not yet willing to commit and helping bring projects to market more quickly.
Private investors emphasised the importance of balancing government intervention with maintaining project competitiveness, cautioning against a blank cheque approach. A strong consensus emerged that subsidies cannot compensate for weak fundamentals such as low ore grades or insufficient reserve size. Projects must be economically viable with or without government support and capable of generating genuine returns. Maintaining commerciality in the public-private partnership approach is key to allowing natural market forces to play a role.
However, it is important to acknowledge the realities of the current market. In its current state, market price is already dictated by artificial forces, directly preventing market-entry for new suppliers. Therefore, Dialogue participants felt that government intervention is necessary. This intervention should be considered assistive, helping projects navigate existing challenges that are inhibiting them from getting off the ground, rather than propping up select projects. The Japanese Government’s support of Lynas was viewed as a successful model for partnership. Lynas received funding in the form of a loan and equity package from Japan Australia Rare Earth, a company co-founded by Sojitz and Japan Organization for Metals and Energy Security (JOGMEC).16 This funding enabled the completion of the construction of a rare earth processing plant in Malaysia. However, the funding functioned as an investment, not a subsidy, requiring Lynas to operate on commercial terms and remain operationally competitive. The key is in balancing national security mineral objectives with market dynamics.
To strengthen public-private partnerships, the Australian Government can draw lessons from international partners. Mineral companies and potential investors in the sector self-reported that they had limited understanding of Australia’s long-term policy direction. Improving industry’s understanding of Australia’s policy objectives can help provide certainty to industry, ultimately attracting long-term, patient capital. This could include expanding the Australian Government’s business liaison functions, which already exist across Treasury and the Critical Minerals Office, as well as establishing a single, coordinated interface for industry engagement. The scale-up of the Australian Government’s Investor Front Door program, which began its pilot program in September 2025, will help fulfil this need by offering support for regulatory and approval requirements to projects relevant to national priorities.17
More broadly, the Australian Government should work closely with industry to communicate its long-term objectives and expectations. A transparent policy framework acts as a de-risking mechanism, providing the certainty required for sustained private investment. Clear public messaging is also essential to explain national security externalities and justify the premium associated with a secure mineral supply chain. Achieving this will require deeper integration of private-sector expertise into senior official and political decision-making and the exploration of new public–private partnership models.