Updating Australia’s Critical Minerals List: issues paper

Critical Minerals Consortium

A response to questions raised concerning
Australia’s Critical Minerals List

Prepared by
Critical Minerals Consortium

17 August 2023

Key contacts

Professor David Whittle Associate Professor Mohan Yellishetty
Adjunct Professor (Practice), Monash University Monash University
Co-founder of the Critical Minerals Consortium Co-founder of the Critical Minerals Consortium
David.Whittle@monash.edu Co-convenor of the National Industry Working Group (Critical
Minerals), Australia India Chamber of Commerce
Mohan.Yellishetty@monash.edu
A response to questions raised concerning Australia’s Critical Minerals List

Executive Summary
This report includes recommendations from the Critical Minerals Consortium (CMC), in response to the Critical
Minerals List issues paper. The recommendations were informed in part by an online workshop conducted by the
CMC with participation from 22 research and industry representatives. Recommendations are summarized below.

Current set of criteria

We need to consider which minerals are critical to Australia, and potash may be one mineral that would make the list.
Considering Australia’s commitment to net-zero-carbon emissions by 2050, we could potentially see the addition of green steel and low-carbon cement to Australia’s list of critical minerals.

We recommend that:

• The criterion that currently reads “that our strategic partners need” should be modified to read “that Australia and
its strategic partners need”.
• Some change needs to be made to the criteria to allow Australia to source its critical minerals from other countries
if it cannot produce them itself.
• We should exclude from the list minerals for which no action is required, for example in the case that global
demand is expected to decline. This can be done by the addition of the criterion: “for which industrial or
government action is warranted”.
• A comprehensive and disciplined approach to minerals criticality assessment should be adopted. Minerals
criticality assessment is a topic that the CMC has published previously on including (Whittle, Yellishetty et al.
2020, Whittle and Yellishetty 2023). The CMC is well-placed to engage with the Federal Government in a detailed
discussion of how to best structure the analysis to determine Australia’s critical minerals list.

Additions/removals from the list

Consideration should be given to the addition to these additions to the list:
• Green steel
• Aluminium metal
• Copper metal
• Potash
• Low-carbon cement

In smaller markets, the government should tailor its support to small and medium sized producers.

There is a risk that if the list is too long, that it will not be very useful in terms of providing focus to either industry or government. The list should be inclusive of as many critical minerals as the government and industry can reasonably support to make material increases in production.

Criticality and capability to process

The question of capacity to process should be addressed with respect to each critical mineral individually, rather than to all critical minerals generally.

Whether or not Australia maintains one or more lists, the important consideration is the details of the determination of criticality, the market size, the market structure, Australia’s capacity to supply, the type of government intervention required, the potential for such intervention to add value etc.

Lessons from other countries

We should learn as much as we can from the methods developed in other countries, especially so that we can properly interpret and integrate their results into our own minerals criticality assessment.

Triggering an update

We recommend conduction annual or biennial reviews, in part to develop the methods, as well as to determine whether material changes are occurring.
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In conducting reviews, be conscious of a need to maintain focus for long enough to make a difference in the industry.
Accordingly, trivial changes to the list, should be avoided, so as to avoid distracting focus.

International alliance

China has 100,000 professionals involved in the REE industry. Australia, US, Canada, and South Africa can count only 38,000 mining professionals – covering all minerals. If alternative supply chains are to be developed for all critical minerals, we need to think at a scale that stretches well beyond Australia’s shores. Australia has minerals and it has mining capability but its capabilities thin out further along the supply chain, and we should be looking to partner with the US, EU, Canada, Korea, Japan and India (amongst others). It is for this reason that the CMC was involved in developing a recommendation for a Critical Minerals International Alliance. Further details are included in Appendix –
Critical Minerals International Alliance.

Support for research

The CMC has, since 2020, made important contributions to the discipline of minerals criticality assessment and is also a meeting place for researchers from various research institutions with expertise in critical minerals. It receives no direct funding from federal or states governments for its efforts. Providing secure funding, would guarantee a continuation of its contribution.

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Contents
Contributors ................................................................................................................................................ 1

Definitions................................................................................................................................................... 3

Current set of criteria .................................................................................................................................. 5
Discussion .................................................................................................................................................... 5
Recommendations ........................................................................................................................................ 7

Additions/removals from the list .................................................................................................................. 8
Discussion .................................................................................................................................................... 8
Recommendations ...................................................................................................................................... 11

Criticality and capability to process ........................................................................................................... 12
Discussion .................................................................................................................................................. 12
Recommendations ...................................................................................................................................... 14

Lessons from other countries.................................................................................................................... 15
Discussion .................................................................................................................................................. 15
Recommendations ...................................................................................................................................... 16

Triggering an update ................................................................................................................................ 17
Discussion .................................................................................................................................................. 17
Recommendations ...................................................................................................................................... 17

Further Recommendation ......................................................................................................................... 18
International Alliance .................................................................................................................................. 18
Support for Research .................................................................................................................................. 18

Appendix – Critical Minerals Consortium .................................................................................................. 19

Appendix – Critical Minerals Definitions .................................................................................................... 20

Appendix – Critical Minerals International Alliance.................................................................................... 22

References ............................................................................................................................................... 23

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Contributors
This report has been developed by the Critical Minerals Consortium (CMC), based on its research since 2019. The development of this report was also informed by an online workshop conducted by the CMC on Tuesday 15th August
2023. Participants are shown in Table 1. The views expressed in this report are not necessarily the views of all workshop participants.

Table 1. Workshop participants

Name Affiliation

Co-Founder Critical Minerals Consortium, Professor (Practice), Monash
David Whittle
University

Co-Founder Critical Minerals Consortium, Associate Professor, Monash
Mohan Yellishetty
University

Special Advisor, Critical Minerals Consortium & Emeritus Kernot Professor of
Robin Batterham AO
Engineering, the University of Melbourne

Herbert F. Johnson Professor of International Management, Emeritus, at
Louis T Wells
Harvard Business School, Harvard University

Co-Founder Critical Minerals Consortium, Associate Professor, Environmental
Gavin Mudd
Engineering, RMIT University

Annaliese Eames General Counsel and Company Secretary · Australian Strategic Materials

Joe Kaderavek Chief Executive Officer, Cobalt Blue Holdings Limited

Keith McKnight Chief Executive Officer, Group 6 Metals Limited

Andrew Spinks Managing Director, EcoGraf Limited

John Khoo GM Corporate Development, Queensland Pacific Metals

Senior Adviser, Resources Sector - Centre of Excellence, Australian Trade and
Gary Barnes Investment Commission · Australian Trade and Investment Commission
(Austrade)

Larry Stewart Manager - Policy & Research, MCA Victoria

Research Group Leader, Sustainability and System Analysis Research Group,
Masaharu Motoshita
National Institute of Advanced Industrial Science and Technology, Japan

Vivek Dhar Director - Mining and Energy Commodities Research at Commonwealth Bank

Katy Evans Professor, School of Earth and Planetary Sciences, Curtin University

Group Manager | Critical Minerals, Metals, Materials for the Energy Transition
Jacques Eksteen & Chief Scientist, Future Battery Industries Cooperative Research Centre,
Curtin University

Chris Ritchie Senior Lecturer, School of Chemistry, Monash University

David Turner Associate Professor, School of Chemistry, Monash University

Member of the Critical Minerals Consortium. Associate Professor, Institute for
Will P Gates
Frontier Materials, Deakin University Melbourne-Burwood

Member of the Critical Minerals Consortium. Senior Lecturer in Data Science,
Sunil Aryal School of IT | Faculty of Science, Engineering & Built Environment, Deakin
University

Member of the Critical Minerals Consortium. Associate Professor, Engineering
Ayon Chakraborty Project Management, Institute of Innovation, Science and Sustainability at
Federation University Australia

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A response to questions raised concerning Australia’s Critical Minerals List

Andrew McLean Principal, Large Capital Projects Strategic Advisor, DTP Partners

Ric Sotelo Managing Director at Headway Capital

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Definitions
In this document, unless otherwise specified, the following definitions apply:

Definition 1 (critical mineral). A mineral is a critical mineral if there is a risk of a supply disruption for the mineral, and if the consequence of such a disruption would be great.

This definition is based on the work of researchers in the field since the mid-2010s. The definition qualifies ‘minerals’ in terms of markets (supply and demand). It is concerned with unreliability of supply, and an implied inability to find alternate supplies when a primary supply is disrupted. What it says about demand is that substitutes are not available, when a disruption to supply occurs. Other definitions, both formal and informal refer to the application of the minerals.
For example:

Critical minerals such as copper, lithium, nickel, cobalt and rare earth elements are essential
components in many of today’s rapidly growing clean energy technologies – from wind turbines and
electricity networks to electric vehicles. (International Energy Agency 2023)

“Critical minerals” is the new buzz descriptor, the go-to of politicians promoting the potential for Australia
and its miners to pivot into downstream processing and play a meaningful role in the transition to cleaner
energy. (Smith and McIlroy 2023)

Critical minerals are also discussed in the context of defence, sovereign prosperity etc. However, not all minerals that are used for clean energy, defence or sovereign prosperity are critical minerals. For clarity it would be better to refer to intersecting categories, for example:

• Critical minerals that are used for production of clean energy.

• Critical minerals that are used in defence.

Refer to Figure 1 for a Venn diagram illustrating this point.

Figure 1. Illustration of the intersections of definitions.

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Definition 2 (Mineral criticality assessment (MCA)). Mineral criticality assessment is a process through which, for a given perspective, the degree and/or category of criticality of a given mineral is estimated.

Definition 3 (Mineral). A mineral is a mineral (in the ordinary sense), an element contained in a mineral, or a downstream product of a mineral.

We note that critical minerals are often referred to by their principal elemental component, for example lithium, and rare earth elements. However, these elements flow through complex global supply chains, and it is rarely the element that is critical, it is instead some material at some point in the global supply chain. Often, this critical point in the global supply chain has very high supply concentration.

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Current set of criteria

Question: Is the current set of criteria still fit for purpose?

Discussion
Comment (John Khoo, Queensland Pacific Metals): “Use the list to focus government support.”

In the Definitions section above, we gave a concise definition of critical mineral as:

A mineral is a critical mineral if there is a risk of a supply disruption for the mineral, and if the
consequence of such a disruption would be great.

The Critical Minerals Office’s sets criteria for determining whether a mineral is critical, the first two of which are similar to our definition:

• Essential to modern technologies, economies, and national security (equivalent to “the consequence of such a
disruption would be great”)
• Whose supply chains are vulnerable to disruption (equivalent to “there is a risk of a supply disruption”)

The next two criteria in the Critical Minerals Office’s definition alter the definition for the purposes of Australia as a potential supplier nation:

• that our strategic partners need; and
• for which Australia has potential economic geological resources.

These criteria exclude minerals that are critical to Australia. In “A submission to: Inquiry into the implications of the
COVID-19 pandemic for Australia’s foreign affairs, defence and trade” (Whittle, Yellishetty et al. 2020) the CMC pointed out that Australia had not carried out criticality assessment from its own perspective. We speculated at the time that if it were to conduct an assessment, that potash might make the critical minerals list. At the time, Australia imported 100% of its potash which is essential to the agriculture sector. A significant proportion of global supply comes from Russia and Belarus. In 2022, Russia invaded Ukraine, and this led to significant disruptions to global potash exports1.

We should also consider the addition of green steel and low-carbon cement to the list of minerals critical to Australia since they will be required if Australia is to achieve net zero carbon emissions by 20502. We can define green steel and low-carbon cement as ‘minerals’ using our definition, since they are mineral-derived. The criticality occurs further along the value chain than mining, but this surely does not preclude them being defined as ‘critical minerals’ since many widely accepted critical minerals such as lithium and rare earth elements also have criticality occurring further along the supply chain. The only reason green steel and low-carbon cement would not be critical minerals for
Australia would be if we foresee no difficulties in obtaining sufficient supplies, or if net zero carbon emissions by 2050 is not considered a sovereign imperative.

We recommend that:

• The criterion that currently reads “that our strategic partners need” should be modified to read “that Australia and
its strategic partners need”.
• Some change needs to be made to the criteria to allow Australia to source its critical minerals from other countries
if it cannot produce them itself.

1
The Russia-Ukraine War Is Putting Significant Constraints On Global Potash Exports – Millennial Potash’s (OTCMKTS: MLPNF) New Project
Helps Diversify The Supply Chain - Millennial Potash (OTC:MLPNF) - Benzinga
2
How to make net zero happen - Net Zero Australia final report 12 July.pdf

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We note that there are minerals that satisfy the CMO’s current criteria for classification as ‘critical’ but are not on the list, nor should they be, because no industrial or government action is required.

An example is coking coal, categorised as a critical mineral by one of our strategic partners (the EU) and for which
Australia has economic geological resources. Given that in the medium to long term, demand for coking coal will likely reduce, there is probably no need for government or industrial intervention to materially increase supply.

This example suggests the addition of the criterion: “for which industrial or government action is warranted”.

The determination of Australia’s critical minerals list, which should include minerals critical to Australia and its strategic partners, is a complex undertaking, and it is one that the CMC has been researching for several years. The CMC recommends the decomposition of the minerals criticality assessment (MCA) process shown in Figure 2.

Figure 2. A decomposition of the process of determining minerals criticality from an Australia perspective (Whittle, Yellishetty et al.
2020, Whittle and Yellishetty 2023)

A stepwise explanation of the decomposition is as follows:

• A perspective choice must be made for the analysis. This could be the Australian perspective, or some
combination of perspectives including those of sovereign entities.

• Given Australia’s interest in many perspectives, MCAs conducted by others are of great interest. However, due to
the lack of standardisation in the conduct of MCAs globally, they are used as inputs (1) to the decomposition,
rather than relying on them directly and uncritically (5).

• Indicators (2) can be informed by both public (1) and private information (7, 10). The addition of private information
un-constrains the choice of indicators. Private information on mineral endowment (7) can be used to build a more
sophisticated picture of current and future domestic supply. Information from policy development and measurement
of policy effectiveness (8, 9) may be useful in construction of indicators (2) and can be used to ensure alignment of
value measurement between (4), (8) and (9).

• The core method for minerals criticality assessment in (4) is proposed to be an agent-based model that we have
dubbed the Monash methodology (Yuan, Yellishetty et al. 2019).

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• A formal step of measuring the effectiveness of policies (9) is included. The purpose of (9) in the decomposition is
specifically to inform the improvement of the indicators and models. Such steps are normal for any decision
analysis, rational decision-making or business improvement process.

• A cycle repeating every 1-2 years is envisaged to ensure continuous improvement in the method and policy
development.

Recommendations
We need to consider which minerals are critical to Australia, and potash may be one mineral that would make the list.
Considering Australia’s commitment to net-zero-carbon emissions by 2050, we could potentially see the addition of green steel and low-carbon cement to Australia’s list of critical minerals.

We recommend that:

• The criterion that currently reads “that our strategic partners need” should be modified to read “that Australia and
its strategic partners need”.
• Some change needs to be made to the criteria to allow Australia to source its critical minerals from other countries
if it cannot produce them itself.
• We should exclude from the list minerals for which no action is required, for example in the case that global
demand is expected to decline. This can be done by the addition of the criterion: “for which industrial or
government action is warranted”.
• A comprehensive and disciplined approach to minerals criticality assessment should be adopted. Minerals
criticality assessment is a topic that the CMC has published previously on including (Whittle, Yellishetty et al.
2020, Whittle and Yellishetty 2023). The CMC is well-placed to engage with the Federal Government in a detailed
discussion of how to best structure the analysis to determine Australia’s critical minerals list.

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Additions/removals from the list

Question: For minerals that are currently on the list, or minerals that should be considered
for addition to or removal from the list?

Discussion
Comment (Workshop participant): “Let’s play to our strengths: Copper, zinc, aluminium, nickel.”

Comment (Andrew McLean, DTP Partners): “$200bn coal and gas exports are on the slide. What is it that will replace these significant contributors to the Australian economy, to our security, and to our drive to net zero?”.

In the previous section, we made the case to include minerals that are critical to Australia in the CMO’s Critical
Minerals list and suggested this might lead to the inclusion of potash, green steel and low-carbon cement. In this section, we focus on the potential for Australia to supply critical minerals to its strategic partners.

Table 2 shows a list of mineral commodities ranked by estimated market size. The table also provides information as to:

• Whether and when the mineral appeared on US and EU critical minerals lists
• Whether the minerals were listed in Australia’s Critical Minerals Prospectus as critical and have a corresponding
Australian mineral endowment.
Table 2. Estimated market size for various mineral products3 and their classification as critical minerals

Mineral commodity included in EU critical US critical Estimated Notes
Australian (year (year global
prospectus4 added) added) market size
(US$bn)

Cement 540 Australia’s addressable market would
is a fraction of this.

Iron (Iron ore) 296 Useable ore

Coal (export) <20175 238 Global coal export value6

Aluminium Y7 20208 2018 228 Smelted aluminium

Copper9 2023 199 Copper metal

3
Unless otherwise stated, the data is derived from U.S. Department of the Interior and U.S. Geological Survey (2023). Mineral Commodity
Summaries 2023.
4
“Y” indicates inclusion in the list, and for which Australian mineral resources are known. Source: Critical Minerals Prospectus 2022: Australia's
Opportunity to Lead the World | Global Australia
5
Coking coal only
6
Source: Coal export value worldwide by country | Statista
7
High purity alumina
8
Bauxite
9
Copper demand is projected to grow from 25 million metric tons (MMt) today to about 50 MMt by 2035, a record-high level that will be sustained and continue to grow to 53 MMt by 2050. Source: Bonakdarpour, M. and T. M. Bailey (2022). The Future of Copper: Will the looming supply gap short-circuit the energy transition?, S&P Global.

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Gold 179 Gold metal

Nickel 2023 2011 83 Nickel metal

Potassium Oxide / 2018 68 KO2 equivalent
Potash

Lithium Y 2011 2008 22 Lithium carbonate

PGMs Y 2010 2008 20 Platinum and palladium only

Phosphorus 2017 20 Marketable phosphate rock

Manganese Y 2023 2008 18 Manganese metal

Magnesium Y 2010 2018 17 Magnesium metal

Chromium Y 2014 2018 14 Chromite ore

Cobalt Y 2010 2008 13 Cobalt cathode

Rare earth elements Y 2010 2008 3 REE revenue10

Antimony Y 2010 2015 2 Antimony metal11

Graphite Y 2010 2011 2 Graphite12

Niobium Y 2010 2008 <2 Niobium metal

Tantalum Y 2010 2008 <0.3 Tantalum

Hafnium Y 2017 2011 ? 78 tonnes13

The EU and US critical minerals lists considered are:

• EU: Critical Materials
• US: Critical Minerals (published by the US Geological Survey).

We have focused on these two lists for simplicity in this case, but there are many lists that need to be considered, including other lists from the EU and US (for example EU Strategic Materials and US Department of Energy Strategic
Materials) as well as lists from other sovereign entities.

Cement

If Australia is to meet its net-zero carbon 2050 target, it will need to transition to zero or low carbon cement. The global market is estimated to the $540bn though the addressable market for Australia would be a small fraction of that.

10 Sources: Rare Earth Elements Market Size, Share | Industry Growth Report, 2025 (grandviewresearch.com), Rare Earth Elements Market Size
& Forecast Report [2021-2028] (fortunebusinessinsights.com)
11
Source: Antimony Market: Global Industry Trends, Share, Size, Growth, Opportunity and Forecast 2022-2027 (researchandmarkets.com)
12
Source: Graphite Market Size, Share Report, Industry Ootlook, Forecast (zionmarketresearch.com)
13
Source: Hafnium Market Size, Industry Share, Analysis, Forecast 2023-2028 (imarcgroup.com)

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Iron

Iron is not a critical mineral from any perspective, yet iron ore is a hugely significant mineral for Australia, with
Australia contributing a large proportion of global supply. Whilst it is not categorized as a critical mineral from the perspective of our strategic partners, there is a direct link to:

• The global move towards net-zero and its consequent need for green steel.
• Australia’s potential to produce green hydrogen and renewable energy and consequently its potential to
produce green steel.

The potential development of a green steel industry in Australia is currently being explored by Geoscience Australia, supported by Monash University. As discussed above, it could easily be argued that green steel ought to be considered as a critical mineral from Australia’s perspective, and the same is true for most other sovereign entities.

Coking coal

Coking coal is critical in the EU, and Australia produces a great deal of it. However, the production of coking coal in
Australia is well supported by mining giants and does not appear to need government assistance to prosper, especially if future demand declines as green steel production increases. The exclusion of coking coal from the CMO’s list of critical minerals will be consistent with the CMO’s criteria to select critical minerals if the criterion “for which industrial or government action is warranted” is adopted.

Aluminium

The US specifies ‘aluminum’, the EU specifies ‘bauxite’ and the CMO’s list specifies ‘high purity alumina’. These are each aluminium at three different points on the supply chain. If Australia is to become a powerhouse of renewable energy, then perhaps it can again become a significant player in the production of low or zero-carbon aluminium metal.

Copper

Production is dominated by mining giants which are well motivated by high metal prices to produce more, at least in the form of concentrate. The criticality of copper is downstream, with a high concentration of smelters in China. If
Australia were to list copper as a critical mineral, then it ought to consider doing so for copper metal specifically.

Nickel

Nickel is classified as critical by the EU and US but is not on the CMO’s list. Perhaps the question is: whether including it on the CMO’s list would increase industrial or government action, in such a way as to deliver a material increase in production.

Potassium Oxide / Potash

If Australia conducted a minerals criticality assessment from its own perspective, it may well determine potash to be a critical mineral.

Lower market value minerals in the table

Most are included in the CMO’s list. They are all relatively small markets compared to the markets for the minerals discussed above, adding to around US$110bn. The smaller the market, the less likely it is that the giant mining companies will be interested, except for co-production (for example, the production of cobalt as a coproduct to copper). This implies that if the government is to support primary production of these mineral, then it will need to support small to medium sized companies. These companies will face steeper challenges when it comes to raising capital and achieving economies of scale, compared to the giant mining companies.

Very low market value critical minerals

At the bottom of the list in Table 2, with relatively small market sizes, we have Tantalum and Hafnium. They meet many of the criteria for a critical mineral from an Australian perspective. Should the federal government provide support to this market, and if so to what extent?

These market sizes may be small compared to the major commodities, and whilst this will ultimately limit the size of an
Australian enterprise competing in the market, there is still potential for Australian businesses to emerge with revenues in the hundreds of millions of dollars.

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How long should the list be?

In 2021 McNulty and Jowitt (McNulty and Jowitt 2021) conducted a review of 25 criticality assessments that had been published up until 2020. The 25 criticality assessments covered a range of perspectives including global and sovereign (US, EU, Japan etc.). Between them, the criticality assessments deemed 73 different minerals to be critical, usually referred to by their elemental names. There are only around 90 naturally occurring elements in the Earth’s crust. Suppose Australia ended up with these 73 elements on its list of critical minerals – 81% of the naturally occurring elements: Then we suggest it would not be a very useful list in terms of providing focus to either industry or government.

Comment (John Khoo, Queensland Pacific Metals): “Use the list to focus government support.”

The list should be inclusive of as many critical minerals as the government can reasonably support to make material increases in production.

Recommendations
Consideration should be given to the addition to these additions to the list:
• Green steel
• Aluminium metal
• Copper metal
• Potash
• Low-carbon cement

In smaller markets, the government should tailor its support to small and medium sized producers.

There is a risk that if the list is too long, that it will not be very useful in terms of providing focus to either industry or government. The list should be inclusive of as many critical minerals as the government and industry can reasonably support to make material increases in production.

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Criticality and capability to process

Question: Should Australia differentiate between criticality or importance of minerals, and the
capability to process them, through categories within the list or a separate
category that sits alongside the list?

Discussion
The discussion is framed around examples of cases where criticality and value is downstream, and an example where value is upstream, at least from Australia’s perspective.

Example (Downstream value and criticality): We know that in some cases, for example, in the case of lithium (see
Figure 3) and rare earth elements (REEs), the economic value of the mining section of the values chains is low, the value lies further along the value chain. In the case of REEs, Olympic Dam is known to have the second largest deposit of rare earth elements in the world, and the REEs are already mined (as a coproduct to copper, gold, and uranium). However, there is presently no economic value in these REEs, since the mineralogy of the deposit is such that they cannot be economically extracted.

Market value (US$m)
$120,000

$100,000

$80,000

$60,000

$40,000

$20,000

$-

Argentina Australia Chile China Japan Korea Korea Other USA

Figure 3. Market values for various stages in the lithium-ion battery value stream 2017 (Wills, Buckley et al. 2018)

In the cases of both lithium and REEs, it is not only the economic value that is further along the supply chain than mining, but also the point of criticality. The criticality of lithium is to do with concentration of refining and processing, and electrochemical production in China (Figure 4). Lithium-bearing ore is not a critical mineral, lithium carbonates and electro chemicals are.

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Market share
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Argentina Australia Chile China Japan Korea Korea Other USA

Figure 4. Market share for various stages in the lithium-ion battery value stream 2017 (Wills, Buckley et al. 2018)

In the case of REEs and focusing on the NeFeB magnets supply chain, it is China’s coverage of the whole supply chain, in particular the separation to rare earth oxides and converting oxides to metals that is the principal cause of criticality (Table 3). REE ores are not critical minerals, rare earth oxides (REOs) and metals are.

Table 3. Global locations for NeFeB magnets supply chain tiers (The White House 2021).

NeFeB sintered
Mixed chemical

Separation to REO
Oxide to metal

Magnet alloys
compounds14

magnets
Mining

Country
HREE
LREE

Australia ✓ Pilot

Myanmar ✓ ✓

Burundi ✓

China ✓ ✓ ✓ ✓ ✓ ✓ ✓

Estonia ✓

Germany ✓

France ✓ ✓

Malaysia ✓ ✓

14
Mixed chemical compounds are extracted from mined ores in what is generally called a ‘concentration’ process. The compounds contain the target minerals or elements.

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Russia ✓ ✓ ✓

India ✓ ✓ ✓

Japan ✓ ✓ ✓ ✓

Kazakhstan Idle

United States ✓ ** ** ** Idle Idle **

United Kingdom ✓ ✓

Vietnam ✓ ✓ ✓

Other ✓ ✓ ✓ ✓ ✓ ✓

Example (critical minerals where the value is in mining and direct shipping): Metallurgical coal is a critical mineral in the EU and is ultimately linked to its need to produce various kinds of steel. Metallurgical coal can be very profitably exported from Australia. The mining and direct shipping of metallurgical coal is the sweet spot for Australian industry.
Steel making using current technology is a more economically marginal sector of the supply chain, at least as far as
Australia’s current strengths go. The situation will however change when green steel production ramps up, at which time, metallurgical coal is unlikely to be a critical mineral.

The above examples point to significant complexity in establishing the scope of a minerals criticality assessment
(MCA), in as much as there is no clear demarcation as to how much of the supply chain needs to be considered. But it also points to the clear need to go well beyond defining critical minerals by their elemental constituents. What is needed is an understanding of the exact nature of the critical mineral, and the process associated with criticality, wherever in the supply chain criticality occurs (Whittle and Yellishetty 2023). It is important to look at each supply chain in detail, rather than attempting to generalize, for all critical minerals, the extent to which downstream processes need to be considered by Australia.

Comment (Vivek Dhar, Commonwealth Bank): “Excluding China from the supply chain could have significant implications for cost, and it will exclude the most important customer for upstream critical minerals. On the other hand
[for markets in which China’s dominance is a contributor to criticality], including China in the supply chain does not address the problem of criticality. We really need to undertake a sophisticated evaluation of risk, wherever components of the supply chain are located.”

Other countries maintain more than one list of critical or strategic minerals. Whether or not Australia maintains one or more lists, the important consideration is the details of the determination of criticality, the market size, the market structure, Australia’s capacity to supply, the type of government intervention required, the potential for such intervention to add value etc.

Recommendations
The question of capacity to process should be addressed with respect to each critical mineral individually, rather than to all critical minerals generally.

Whether or not Australia maintains one or more lists, the important consideration is the details of the determination of criticality, the market size, the market structure, Australia’s capacity to supply, the type of government intervention required, the potential for such intervention to add value etc.

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Lessons from other countries

Question: What lessons could be learned from other countries’ approaches or the ways in
which they consider their criteria for listing critical minerals?

Discussion
Australia’s critical minerals list compared to other critical minerals lists

Australia’s list of critical minerals differs from those issued by sovereign entities such as US, EU, Korea, and Japan in that Australia’s list is about minerals that it seeks to provide to others, whereas the US, EU, Korea, and Japan are concerned with the minerals they themselves need.

The US, EU and other sovereign entities have published information as to their methods to determine minerals criticality to varying extents. The US has a disciplined and transparent approach, which has improved over the 15+ years of its development. We should learn from this and other approaches, bearing in mind that Australia’s need is different as a potential supplier of critical minerals, rather than a consumer, and so we should not attempt to apply another country’s method directly, but use an understanding of the methods to properly interpret the foreign results as inputs to our own assessment from Australia’s perspective.

What good looks like in minerals criticality assessment

In 2016 Professor Thomas Graedel and Dr Barbara Reck published a very useful review paper (Graedel and Reck
2016). Based on analysis of multiple criticality assessments from across the globe, Graedel and Reck proposed a list of desirable attributes of an MCA method (Table 4).
Table 4. Ten desirable attributes for a model MCA methodology (Graedel and Reck 2016).

Topic Attribute

Broad in terms of elements addressed including both common
1 Breadth minerals and the increasingly used scarce minerals.

2 Factors Considers all factors that are generally important to criticality.

3 Substitutes Addresses the issue of substitutability or lack thereof.

4 Companion metals Addresses the issue of companion metals.

Considers the degree to which recycling can affect virgin metal
5 Recycling demand.

Addresses different using entities (e.g., corporations and
6 Perspective countries) as target customers for the assessments.

7 Updates Periodically updated.

Authoritative in nature, a stature achieved by such actions as
8 Authoritative scholarly peer review and/or governmental review.

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Transparent: The methodology should be clear, and the data
9 Transparency used for the evaluations should be described in detail and be
made publicly available.

Addresses uncertainty, so that the reader has a
sense for the rigor and confidence related to a
10 Uncertainty
criticality analysis.

Table 4 is an excellent starting point for evaluating any MCA approach but more is needed. The CMC has more to say about this in (Whittle and Yellishetty 2023).

Comment (Luis Wells, Harvard University): Any critical minerals list must acknowledge that technology is changing rapidly. Substitution in critical minerals is extremely dynamic. Until such time as there is a stable supply of a critical mineral, substitution will remain a significant disruptor of demand. We are also seeing emergence of vertical integration, reminiscent of what Henry Ford did a century ago. Such vertical integration doesn’t really help to mitigate minerals criticality, it instead introduces further distortions in the marketplace.”

Comment (Workshop participant): “The Canadian approach is focused on onshoring entire value chains, and is a response to supply concentration not only in China, but also the US and Mexico.”

An implication of the comment above is that in examining Canada’s approach to critical minerals, we should recognise its special circumstances, and not merely emulate the approach.

Recommendations
We should learn as much as we can from the methods developed in other countries, especially so that we can properly interpret and integrate their results into our own minerals criticality assessment.

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Triggering an update

Question: What should trigger an update to the list? For example, global strategic,
technological, economic or policy changes.

Discussion
A review should be triggered whenever changes occur that could materially affect the outcome of a minerals criticality assessment. However, this is a circular problem since the best way to determine if a material change to outcomes could occur is to conduct a review.

The US has conducted regular reviews since 2008. The regularity of the reviews has enabled a determination as to whether or not material changes have occurred, but repeated reviews also improve the methods employed. Perhaps in the future, it will not be necessary for the US to conduct reviews on such a regular basis, since its methods of review have arguably matured.

In Australia’s case, we have considerable development ahead of us. Accordingly, it makes sense to conduct annual or biennial reviews, in part to develop the methods, as well as to determine whether material changes are occurring.

However, in conducting regular reviews, there should be caution applied in making changes to the list. To the extent that government and industry focus is driven by the list, trivial changes to the list can serve only to defocus efforts. It may take decades for an industry to develop for any given critical mineral. Government and industry focus must remain in place for long enough to make a difference.

Recommendations
We recommend conduction annual or biennial reviews, in part to develop the methods, as well as to determine whether material changes are occurring.

In conducting reviews, be conscious of a need to maintain focus for long enough to make a difference in the industry.
Accordingly, trivial changes to the list, should be avoided, so as to avoid distracting focus.

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Further Recommendation
International Alliance
China has 100,000 professionals involved in the REE industry15. Australia, US, Canada, and South Africa can count only 38,000 mining professionals – covering all minerals16. If alternative supply chains are to be developed for all critical minerals, we need to think at a scale that stretches well beyond Australia’s shores. Australia has minerals and it has mining capability but its capabilities thin out further along the supply chain, and we should be looking to partner with the US, EU, Canada, Korea, Japan and India (amongst others). It is for this reason that the CMC was involved in developing a recommendation for a Critical Minerals International Alliance. Further details are included in Appendix –
Critical Minerals International Alliance.

Comment (Louis T. Wells, Harvard University): “[In determining minerals criticality], it matters from which country minerals are sourced.”

Comment (Workshop participant): “The US doesn’t want to rely on only one country [no matter which country this is].”

Comment (Workshop participant): “Australia relies on Asia and other parts of the world for manufacturing. Australia’s strategic vulnerabilities are impacted by these dependencies.”

Support for Research
The CMC has, since 2020, made important contributions to the discipline of minerals criticality assessment and is also a meeting place for researchers from various research institutions. It receives no direct funding from federal or states governments for its efforts. Providing secure funding, would guarantee a continuation of its contribution.

Further information about the CMC is included in Appendix – Critical Minerals Consortium

15
Rare earths: industry associations and famous companies, REE organizations-Metalpedia (asianmetal.com)
16
Data provided by AusIMM 15 June 2023: AusIMM (Australia/global) 15,000, SME (USA/global) 12,700, CIM (Canada) 7,500, SAIMM (South
Africa) 2,500.

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Appendix – Critical Minerals Consortium
The Mission of the Critical Minerals Consortium (CMC) is to improve our understanding of minerals criticality and to provide advice, ideas, and expertise to assist policy makers, industry, and the research sector. The CMC includes thirty (30) subject matter experts from Monash University, RMIT University, Latrobe University, University of
Queensland, CSIRO, University of Melbourne, Deakin University, University of NSW and Federation University. It is now expanding to include Australian and international researchers and businesses.

Figure 5. CMC Leadership

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Appendix – Critical Minerals Definitions
Extracted from: Critical Minerals: A criticality assessment approach (Whittle and Yellishetty 2023)

Definition 1 (critical mineral). A mineral is a critical mineral if there is a risk of a supply disruption for the mineral, and if the consequence of such a disruption would be great.

The above definition is consistent with that used by the pioneering authors on critical minerals such as Roderick
Eggert, Ann Carpenter, Thomas Graedel and their colleagues (National Research Council 2008). The definition implies criticality as a discrete category: A mineral is either critical or it is not, depending on if a risk and a consequence are identified. However, we allow for degrees of criticality, accounting for a full range of supply disruption risks and a full range of the seriousness of the consequences felt by a disruption. Then, a category of criticality is determined through the setting of some threshold: If the degree of criticality for a mineral is above the threshold, then it falls inside the critical category.

The scale is multi-criteria, in that criticality results from there being some threshold being reached in a function of both the risk of a disruption occurring, and the consequence of the disruption. Furthermore, the risk and consequence can be broken down into different elements. Risk is a probability, with one or more parameters, which is specific to a given disruption hypothesis. A disruption hypothesis is an event of some type, duration, and severity. For any given mineral, many different types of disruption could be hypothesized, each with its own duration and severity. Consequences are specific to each hypothesized disruption, and will depend on the nature of the effect, and the availability of substitutes.
However, these too can only be hypothesized, not predicted with any certainty, giving rise to a many-to-many relationship between hypothesized disruptions and consequences.

A mineral that is critical to one society; one sector of the economy; one country or even a group of countries, may have no relevance to others. It follows that if a mineral is categorized as being critical, the categorization must be for a given perspective. The perspective can be that of the global economy, a sovereign entity’s economy or a sovereign entity’s defence capability. We count as sovereign entities, countries, and defined economic groupings of countries such as the European Union. Large corporations are also interested in risk-assessing critical inputs to their industrial systems. However, the focus is on critical minerals from a sovereign entity’s perspective, unless otherwise stated. We consider a sovereign entity’s present and future mineral needs for its economy, though do not exclude the defence industry from economy.

Definition 2 (Mineral criticality assessment (MCA)). Mineral criticality assessment is a process through which, for a given perspective, the degree and/or category of criticality of a given mineral is estimated.

With the above two precise definitions in hand, we will now admit a somewhat looser definition for mineral. The imprecision is in part in the interests of brevity. For what we intend, the ordinary term mineral17 is too narrow and in any case has more than one acceptable definition 18, but the term material is too broad. What we mean to include is something in between, but we would rather not use a long, qualified term.

Definition 3 (Mineral). A mineral is a mineral (in the ordinary sense), an element contained in a mineral, or a downstream product of a mineral.

We will illustrate Definition 3 with some examples:

• Critical minerals are often referred to by their key elemental ingredient. This is true of MCAs conducted for the
United States, European Union, Japan, United Kingdom, The Netherlands and Russia. The results of these
studies commonly listed rare earth elements (REE), platinum-group metals (PGM), indium, tungsten,
germanium, cobalt, niobium, tantalum, gallium, and antimony (Sarah M. Hayes and Erin A. McCullough 2018)

• Sovereign entities are interested in materials, not just minerals. The European Union’s 2020 list of critical
materials includes natural rubber. The rest of the European Union’s list of critical materials consists of

17
Webster’s New Twentieth Century Dictionary: “An inorganic substance occurring naturally in the earth and having a consistent and distinctive set of physical properties and a composition that can be expressed by a chemical formula: sometimes applied to similar substances of organic origin, as coal.” McKechnie, J. L. (1959). Webster's New Twentieth Century Dictionary of the English Language. Webster's New Twentieth Century
Dictionary of the English Language. J. L. McKechnie. Cleveland and New York, The World Publishing Company.
18
In contrast to Webster’s Dictionary, the Oxford focuses more on the origin: “A substance obtained by mining…”Fowler, H. W. and F. G. Fowler
(1964). The Concise Oxford Dictionary of the current English. The Concise Oxford Dictionary of the current English. H. W. Fowler and F. G. Fowler.
Oxford, Oxford University Press..

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individual elements, groups of elements (REEs and platinum group metals (PGMs)), a few minerals (bauxite,
coking coal, natural graphite, phosphate rock) and compounds (baryte, borate, fluorspar) (European
Commission 2020). All of these critical materials, other than natural rubber, commence their journey in the
ground, and enter an often-complex supply chain that leads eventually to the creation of something much
more interesting and useful than the rock from which it came. We are generally interested in all the European
Union’s critical materials (all of which meet our definition of critical minerals) other than natural rubber. We
also focus on primary supply rather than secondary supply through recycling since it is invariably the case that
primary supply dominates in emerging markets – it takes times for stocks of retiring assets to provide
sufficient feed stock for recycling to make a material impact on total supply. Recycling will become more
important in the future as the global inventory of products containing critical minerals becomes larger and
some countries such as the United States promote the early-adoption of domestic recycling to ease reliance
on foreign primary supply.

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Appendix – Critical Minerals International Alliance
Austrade, the Australia India Chamber of Commerce, Monash University, and MinterEllison conducted a workshop series in 2021, comprising four sessions. The objective was to bring together stakeholders from government, industry, corporate/legal and research sectors across the regions, to work through the opportunities and the challenges involved in building additional and diversified supply chains for critical minerals, including rare earth elements. The resulting report explores recommendations from the workshops on principles for collaboration, battery minerals extraction, production, and trade, and proposed creation of a Critical Minerals International Alliance (CMIA) with representatives from each participating region.

The purpose of the CMIA is to champion cross-border partnerships for critical minerals and rare earths elements projects in the Indo-Pacific region to facilitate the creation of competitive and sustainable alternative supply chains.

The CMIA will bring together experts from different sectors across the region, with diverse perspectives and backgrounds. Such collaboration will support the development of sustainable and innovative industries that can compete in the marketplace, much more effectively than if each country in the region worked independently. By building a shared understanding of the key challenges and opportunities to creating resilient, secure, and sustainable supply chains for critical minerals in the Indo-Pacific region, and drafting actionable recommendations, both general and supply chain specific, the CMIA can facilitate direct supply chain connections, deliver informed research and advice, and advise on and guide industry-focused policy making across the region.

The CMIA might begin its work by identifying priority supply chain gaps, risks, and challenges. Later projects might focus on policy options to accelerate mining and production; possible investment scenarios to scale up mining and production in the quickest possible time frame; best practices for job creation, training, and workforce development; how to ensure projects are structured to maximize equity and community benefits; factors that incentivise friend- shoring while maintaining compliance with multilateral obligations; infrastructure improvements and related permitting issues; and carbon footprint, environmental and sustainability issues.

In advance of each meeting, workshop or roundtable held by the CMIA, working group leads would provide read- ahead materials and questions that attendees would come prepared to discuss. Opinions from across the region, from industry, academia, governments, and the corporate/legal sector, would all then inform the CMIA's recommendations.

Source: (Yellishetty, Whittle et al. 2023)

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