Innovation is the simple reason that attention to critical minerals is in such sharp focus. Numerous technologies – from EV batteries to PV cells, from fibre-optic cables to semiconductor chips – rely on these minerals, which means we’re using more of them and in greater volumes.
“A hundred years ago, we were using a dozen main metals, and that was it,” says Ms Allison Britt, Director Mineral Resources Advice and Promotion at Geoscience Australia.
These days, we’re using almost all of the periodic table in some fashion in various technologies. We need to better understand critical mineral supply chains, diversify them and make them much more robust than they have been.”
These minerals are critical across numerous technologies driving energy transition, medical devices, aerospace and even banknotes, and are also crucial for products we regard as everyday, such as stainless steel and electronic appliances.
“The definition we use for critical minerals is that they are metallic or non-metallic elements that are essential to the functioning of our modern technologies, economies and national security, and that there is a risk that their supply chains could be disrupted,” says Ms Britt, who is a commodity specialist and expert in critical minerals.
In addition to minerals listed as critical, others are classed as strategic, and the list varies slightly from country to country, based on local uses and threats.
“I was once in a meeting with a famous American geoscientist discussing what’s a critical resource and what’s strategic,” recalls Dr Chris Vernon, Senior Principal Research Scientist at CSIRO Mineral Resources.
“He said it really simply: It’s stuff you need that you can’t get. That struck me as a good touchstone!”
The evolution of listing critical minerals
Ms Britt says, for example, “lithium, cobalt and tungsten are regarded as essential to modern life”.
They are all in geological abundance in Australia and on the critical minerals lists of the US, EU, Japan and India.
“Supply chain disruption to those minerals could come in the form of market monopolies – or near-monopolies such as we see with Chinese control of rare earths – or it could be market immaturity, political decisions, social unrest, natural disasters, mine accidents, geological scarcity, and recently we’ve seen pandemic and war.”
War was the reason the US made its first list of critical minerals. During WWI, five key minerals – tin, nickel, platinum, nitrates and potash – were scarce on its own soil and within two years of the conflict beginning, were becoming difficult to obtain.
“The Americans drew up a list of War Minerals,” explains Ms Britt.
By 1917, the US Geological Survey had reoriented its work to aid the search for minerals needed for the war effort.
“Later they split it into three lists, strategic, critical and essential minerals, but by World War II the lived war experience had shown those distinctions were largely academic.” That is, they were all critical in one way or another.
Many critical minerals aren’t necessarily scarce in Australia, but as well as vulnerable supply chains, keeping up volume to meet surging demand from allied manufacturing sectors is a potential issue.
“If you’re relying on imports of all resources, that makes everything critical,” says Dr Vernon.
“Minerals that are on Australia’s critical list are usually major inputs to the economies of our allies and end up in things that we buy back in a finished form. Rare-earth elements are on the Australian critical minerals list, for example, not because we make things out of rare earths here, rather in recognition that allied economies rely on them.”
How an abundant mineral can quickly become critical
“When it came to developing Australia’s first Critical Minerals list, which was published in 2019, the Australian Government’s approach reflected the fact that our mineral economy is dominated by mineral exports, not manufacturing,” says Ms Britt.
“The original list of 24 minerals was based on the strategic needs of our partners – such as the United States, the EU, Japan, the UK and South Korea – combined with Australia’s high geological potential to supply those minerals.”
The 2022 Critical Minerals Strategy published in March by the Department of Industry, Science and Resources saw the addition of high-purity alumina and silicon, both abundant in Australia.
“They are both important for a range of technologies including batteries, quantum computing and semiconductors,” says Ms Britt.
She says the addition of those two to Australia’s list, to bring the total to 26, is a classic example of how the importance of minerals shifts over time.
“They reflect changes in technologies, in geopolitics, supply chains and processing techniques,” says Ms Britt.
“Technically, neither high-purity alumina or silicon are available as minerals in the raw – the base minerals are bauxite and silica sand – but it is a recognition that those are materials that are incredibly important,” says Dr Vernon.
“Silicon has been added in part because there is a global computer-chip shortage. When the chip shortage became apparent, governments scrambled and had a look at the supply-chain for computer chips and went, ‘Ah, actually a lot of these chips are made in Japan, South Korea, Taiwan, the US, and Europe, but manufacture of the base substrate material is concentrated in three or four individual manufacturers in China’. That’s a weak point in the supply chain.”
Enter the pandemic for a live demonstration of how a supply chain gets smashed almost overnight.
“When COVID hit China, factories closed down and they stopped producing as much of this high-purity silicon wafer, that’s essential for semiconductors,” says Dr Vernon.
“It was a pretty broad impact. The US can’t make enough of their own silicon wafers for these microchips. Solar photovoltaic panels are also made of high-quality silicon, so while the world is not running out of silica (quartz and sand), it’s running out of high-purity silicon, because it’s not produced in enough places to keep the supply chain open and viable. That’s why silicon was added to the list this year.”
The demand for certain critical minerals will continue to fluctuate.
“It definitely keeps people busy trying to forecast what commodities will be regarded as critical minerals in the future! With renewable energy technologies in demand, we might find that Australia adds nickel, copper, tin and zinc to the list,” she says.
All except copper are already on the US Geological Survey’s List of Critical Minerals, which was first published in 2018 and had 15 added in 2022 to bring it to 50.
“The Australian government regularly reviews our Critical Minerals list, and those of our partners, to ensure it reflects those changing conditions in technology, economics and geopolitics,” says Ms Britt.
“We want to make sure we are in the best position to build our own domestic capability for critical minerals discovery, processing and supply chains, which is a real opportunity for Australia.”
The critical minerals list is an important signal to markets
Ms Britt says that the addition of the two new minerals to Australia’s list in 2022 means they are now supported by the government’s Critical Minerals Strategy. It sends a signal to the resources industry and helps to unlock investment in both mineral exploration, processing and downstream value-adding.
“The strategy includes a range of actions to help build Australia’s critical minerals capabilities,” explains Ms Britt.
The Federal government’s $2 billion Critical Minerals Facility was announced in 2021 and is already providing loans to the sector. A $50 million virtual National Critical Minerals Research and Development Centre, hosted by CSIRO in conjunction with Geoscience Australia and the Australian Nuclear Science and Technology Organisation (ANSTO) is another important initiative. It was announced in March 2022 to help unlock new sources of economically viable critical minerals, develop Australian IP in critical mineral processing, target technical bottlenecks in strategic supply chains and drive collaborative research breakthroughs.
Ms Britt says once a mineral is on the list, companies can apply to the Critical Minerals Facilitation Office for connection to government funding facilities.
“For example, now that high-purity alumina is on the list, a company can apply for a range of financial support for its high-purity alumina project that will help improve access to it, secure supply, or advance its processing,” says Ms Britt.
“If a mineral is not on the list, that’s not an option.”
Australia’s potential as a critical minerals superpower
“The surge of electric vehicles and renewable energy projects around the world is a huge opportunity for Australia,” says Ms Britt.
“People want their cars to be made of materials that have been produced responsibly – they don’t want the cobalt in the battery to have come from child labour, or the rare earths in a motor to have contributed to irreversible environmental destruction. Manufacturers want secure supply of those minerals, and other critical minerals such as lithium, graphite, manganese, and vanadium, all of which occur abundantly in Australia.
“The challenge is to value-add to our natural mineral wealth. Australia is a mining superpower, but with a few exceptions, such as the aluminium industry, we haven’t been so good at taking the next steps in the supply chain that would enable us to realise better returns.”
As Ms Britt says, most of our minerals are shipped out in bulk or minimally processed into concentrates or basic metals.
“The high-value critical mineral purification, chemicals and componentry are all created in other countries, and the technology using these materials and components are manufactured in other countries – then Australia buys it back.”
Dr Vernon and Ms Britt also stress that value-adding to our minerals onshore will not only bring economic benefits, but it will also bolster global security around these minerals.
“It’s incumbent on us to lengthen and strengthen these critical minerals supply chains,” says Dr Vernon.
“It’s exciting to dig up and concentrate an ore of something that’s scarce, but if you export it in raw form, you’ve lost all control over the supply chain. Value adding within Australia to strengthen global supply chains is an important aspect to ensure we are not perpetuating the current situation, where some minerals are critical only because there’s a pinch point in the supply chain, and it’s in a country that’s not necessarily transparent in its dealings.”
He calls out two Australian companies that are forging a value-add path for our critical-minerals wealth by doing more downstream processing onshore.
“Lynas Rare Earths [pdf · 751kb] is building a processing facility in Kalgoorlie, creating far more security in the supply chain,” he says.
The company is the only producer of separated rare earths at scale outside China.
“Iluka Resources [pdf · 1.7mb] is building a refinery in Western Australia which will produce purified rare earths to feed into a rare-earths metal refinery, with the product going to magnet makers. Those are both examples of companies lengthening their supply chains.”
Ms Britt says there’s immense scope for more projects like those.
“The growth in the critical minerals sector means we have this opportunity to reinvigorate our own domestic manufacturing sector, and to do more of that value-adding right here in Australia,” she says.
“Any downstream manufacturing needs a reliable feedstock and that’s where Geoscience Australia comes in – we uncover mineral potential which helps companies make those discoveries to provide the raw feedstock that will underpin a lengthened, diversified supply-chain manufacturing sector here in Australia.”
For the Australian resources sector, it’s not so much a matter of ‘watch this space’ as watch this list.