When Anthony Albanese, leader of Australia’s Labor Party, secured his second term as prime minister in May of this year – the first Labor leader to do so since Bob Hawke, who served three terms from 1983 to 1991 – world leaders were quick to congratulate him. But did Australia’s mining industry, a sector critical to the nation’s economy, do the same?
Just a few days before the election, Albanese made his intentions around critical minerals clear via a statement on his website. If elected, his government promised to “pursue Australia’s national interest and boost our economic resilience by establishing a Critical Minerals Strategic Reserve”.
“In a time of global uncertainty, Australia will be stronger and safer by developing our critical national assets to create economic opportunity and resilience,” stated Albanese. “I will ensure that Australia continues to produce and benefit from the resources that are essential to our national interest.”
The strategic reserve will see the federal government commit to entering contracts to purchase, or obtain options over, key critical minerals, which will likely give Australia’s national government some leverage in relation to critical minerals as geopolitical tensions increase.
The government will make an initial investment of A$1.2bn ($767m), including through a A$1bn increase in the existing Critical Minerals Facility established in 2021, taking the total investment in the facility to A$5bn.
Australia is home to some of the largest critical mineral deposits on Earth. In 2024, government agency Geoscience Australia was pledged A$566m by the previous Albanese government to map out the nations’ critical minerals over the next ten years and identify a strategy to develop them.
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By GlobalDataIdentified as crucial to developing infrastructure in everything from renewable energy to defence and communications, these critical materials are already believed to be abundant in Australia. However, Geoscience figures suggest more than 80% of the country remains under-explored.
As such, the country “is uniquely placed to meet the needs of increasing global and domestic demand, while the size and sophistication of our mining industry allows us to take maximum advantage of these resources”, Albanese says.
The reserve will create two new mechanisms: national offtake agreements, with the government taking agreed volumes via a voluntary contract; and selective stockpiling, with the government establishing stockpiles in Australia of certain key critical minerals.
The reserve “will generate cash flow from sales of offtake on global markets and to key partners [and] accumulate stockpiles of priority minerals when warranted by market conditions and strategic considerations, but it is anticipated that these will be modest and time-limited in most cases”.
Resources Minister Madeleine King also says that the reserve, “combined with production tax credits and the expansion of the Critical Minerals Facility, shows the Albanese government is taking the development of an Australian critical minerals industry seriously”. King, who is also Minister for Northern Australia, was re-appointed to the role on 13 May 2025.
The Critical Minerals Production Tax Incentive (CMPTI) – passed into law in early 2025 – is a scheme intended to support the critical minerals industry and promote downstream processing in Australia. It offers a refundable tax credit on 10% of eligible costs associated with the processing of certain critical minerals between July 2027 and the end of June 2040.
The Australian Government has two lists of minerals that are important for the nation’s modern technologies, economies and national security: a critical minerals list containing 31 substances including cobalt and lithium; and a strategic materials list containing aluminium, copper, phosphorus, tin and zinc.
The minerals on these lists support Australia’s “transition to net-zero emissions, advanced manufacturing, defence technologies and capabilities, and broader strategic applications”, according to its Department of Industry, Science and Resources.
All eyes on green iron
Albanese’s Government will now be able to carry on with its overarching Future Made in Australia policy – essentially an attempt to enhance the benefits of net-zero and energy transition policies. The creation of the critical reserve is central to that, along with a A$750m commitment to develop new low-emissions technology, and A$1bn to boost green iron manufacturing and supply chains.
A statement from Andrew Forrest, executive chairman and founder, Fortescue, claims the return of Albanese “sends a clear and unequivocal message: Australians will back and support policies that recognise the economic opportunities which come from acting on the existential threat of climate change”.
Forrest continues that the government’s commitments, “including the Future Made in Australia plan, the Capacity Investment Scheme, the Hydrogen Production Tax Incentive and the Green Iron Fund, provide a strong foundation for a green energy future”.
Australia is likely trying to position itself as a green iron manufacturing powerhouse, with the A$1bn fund boosting green iron manufacturing and supply and helping to unlock substantial levels of private investment.
“Green iron can be the biggest industry Australia has ever built,” adds Forrest, so “let’s start in the Pilbara this decade, with investment, markets and skills”. Pilbara is home to Fortescue’s Green Metal Project, which is expected to produce more than 1,500 tonnes per annum of green metal, with first production anticipated in 2025, according to the company’s website.
The plant will use green hydrogen in a reduction furnace to convert iron ore into sponge iron, revealed the company.
Magnetite mining on the rise
Soroush Basirat, energy finance analyst, global steel at the Institute for Energy Economics and Financial Analysis, was also hopeful Albanese would help the growth of Australia’s high-grade magnetite mining sector, as a key feedstock for green iron production.
“The industry remains focused on hematite mining due to its higher profit margins, but this approach limits flexibility,” Basirat told Mining Technology. “A transition to magnetite mining – better suited for producing high-grade ore – has yet to gain traction. Given the long lead times for magnetite projects (often a decade to become operational and deliver stable output), government support is essential to accelerate development.”
Of Australia’s total economic demonstrated resources of iron ore, just over 58.29 billion tonnes (bt), some 24.25bt is magnetite ore, according to 2023 research from Australia Minerals, a collaboration of Australia’s federal, state and Northern Territory Government geoscience agencies.
The research added that the “projected demand for high-grade iron ore products has provided momentum for the recent development of magnetite deposits, such as the Iron Road Central Eyre project in South Australia and Fortescue Metals Group’s Iron Bridge project in Western Australia.
Basirat continues that while the government “is backing green iron initiatives, significantly more effort is needed to establish even a single low-emissions ironmaking facility in Australia”.
To remain competitive in the evolving global iron ore market, Australia must also act swiftly to diversify beyond hematite and invest in the future of high-grade, low-emissions iron production.
“Without action, Australia risks losing its competitive edge. Emerging competitors such as the Simandou [iron ore] mine in [Guinea], Africa, are set to enter the market and could claim a significant share by the end of the decade, challenging Australia’s dominance, which has been largely built on lower-grade ores,” Basirat adds.
There is an “urgent need” to shift toward producing high-grade iron ore that is suitable for the direct reduced iron pathway, says Basirat, noting that this process is “critical as steelmakers transition to more environmentally friendly technologies such as electric arc furnaces to replace the traditional, coal-based blast furnace-basic oxygen furnace method”.
Albanese’s new mining priorities
Australia’s minerals sector is central to the nation’s prosperity, says an early May statement from the Mineral Council of Australia (MCA), “supporting over 1.2 million jobs, contributing more than A$455bn in export earnings last year, and playing a vital role in the global energy transition through the supply of critical minerals”.
Tania Constable, CEO, MCA, added that she hopes the new government “will place investment at the heart of its economic growth strategy [with a] strong focus on skills, training and workforce, ensuring that Australia has the capability and talent it needs to meet growing demand for critical minerals and resources”.
Some key aspects of the policy are tax incentives for processing of critical minerals and production of hydrogen, as well as resources to assess the dangers of foreign investment in critical infrastructure, critical minerals and critical technology.
The Association of Mining and Exploration Companies’ CEO, Warren Pearce, welcomed the re-election, and publicly stated that his organisation is “ready and willing to work constructively with the returned Albanese government to deliver the minerals and metals critical to Australia’s prosperity and the global energy transition”.
Pearce added that it is now time “for action on key policy initiatives that will support long-term investment and drive Australia’s international competitiveness, especially in critical minerals”.
“The exploration sector is struggling,” said Pearce, “with investment extremely hard to come by, and this crucial cog in the wheel of mining industry needs clarity around the continuation of Junior Minerals Exploration Incentive (JMEI)”.
The JMEI encourages investment in small minerals exploration companies that carry out greenfields mineral exploration in Australia, allowing eligible companies to generate tax credits by choosing to give up a portion of their losses from greenfields mineral exploration expenditure.
Initially introduced in 2017, JMEI is currently funded until the end of June 2025.
Rebecca Tomkinson, CEO, Chamber of Minerals and Energy Western Australia, sees the re-election of Albanese as a chance to streamline environmental regulations, with reform of “environmental law long overdue, but any change must [offer] improving outcomes for both the environment and for business”.
