The Australian Government has announced an AU$2 billion (~$1.26 billion) expansion in financing critical minerals, including rare earths.

This expansion of the funding facility, announced by Prime Minister Albanese after the meeting of the Australia-United States Taskforce on Critical Minerals, takes the government’s value-adding investments in Australian resources to AU$6 billion (~$3.79 billion).

The funding facility,  managed by Export Finance Australia and funded with AU$2 billion (~$1.26 billion), supports projects aligned with Australia’s  Critical Minerals Strategy 2023-2030 by bridging gaps in private finance.

This expansion aligns with the Australian government’s commitment to establishing a secure critical minerals supply chain with the U.S., which is crucial for the manufacturing sectors of both countries.

Australia and the U.S. recently agreed to strengthen the critical minerals industry in a bid to diversify supply chains. This pact also allows Australian mineral and renewable energy suppliers to be treated as domestic suppliers under the U.S. Defense Production Act.

Australia, with ample critical minerals for renewables, can become a global supply chain partner and China alternative, according to a report by the think tank Climate Energy Finance. The report recommended that Australia implement strong policy agendas like the U.S. Inflation Reduction Act and the REPowerEU Plan in the European Union to endorse proposals of strategic national interest around the export and critical mineral mines.

In March, India and Australia advanced their Critical Minerals Investment Partnership, focusing on five projects, including lithium and cobalt, to develop supply chains for critical minerals processed in Australia to aid India’s electric vehicle manufacturing and emissions reduction objectives.

Earlier this month, China imposed temporary export controls on sensitive graphite products for electrical vehicle batteries, citing national security concerns, reflecting the global competition for critical minerals and supply chain security in the clean energy sectors.