Can we get serious now? Securing Australia’s critical minerals future

The ground is shifting beneath Australia’s critical minerals sector. Value networks¹ are resetting. Competing jurisdictions are scrambling to industrialise their critical minerals value chains. Allies are prioritising security of supply.

Above all, time is critical.

Yet new PwC analysis finds only around one in ten of Australia’s critical minerals projects are ready for investment. From a total 907 critical minerals projects nationwide, our investable universe is 117 projects. Drill down further, and only 11%, or 13 projects, are at Definitive Feasibility Study (DFS) stage. These 13 projects could be two to four years away from reaching FID, depending on the extent of post-DFS/pre-FID activities².

The extent of the time lag is clear when you consider nearly 90% of projects in Australia’s investable universe are three to six years from reaching FID, and up to ten years in the case of more complex projects (53% at pre-feasibility study stage, 36% at scoping study stage). While allies and competitors are moving with urgency and intent, the development of Australia’s critical minerals pipeline is not keeping pace.

The Prime Minister has been unequivocal on this point: the world wants what Australia has, but it will not wait around for us.³

Government support for the industry is to be commended. Since 2022, Australia has committed $28bn to the critical minerals and rare earths sector, spanning the Critical Minerals Strategic Reserve, the Critical Minerals Production Tax Incentive and the Critical Minerals Facility. Yet input logic does not get projects developed.

A significant disconnect remains between policy announcements and actual investment decisions being made by project proponents. Energy costs, permitting timelines, workforce constraints, commodity price volatility, and the gap between government incentives and project economics all contribute to this disconnect.

While significant, the $28bn commitment is largely prospective, conditional, or structured as tax incentives that only deliver value once projects are producing. Support doesn’t stretch to many of the projects in the investable universe that are yet to reach FID⁴.

Australia cannot afford to let the geopolitical window slam shut before it has established itself as a key player in a range of critical mineral value chains.

The resources landscape has changed. The old orthodoxy prized global efficiency and low costs; national security and prosperity are now the priority. Concentration risk is top of the agenda. Security premiums are the new green premiums.

Value network shifts

Critical minerals sit at the centre of four converging agendas: the energy transition (electrification), the growth in AI and automation (productivity), trade and reindustrialisation (growth) and defence (security).

The pursuit of these agendas should benefit Australia. But disruption to value networks is forcing a recalibration. Speed to production has become an important performance metric. Australia’s development of its critical minerals industry must keep pace with the expectations of its allies.

Partner of choice – for now

For many nations, Australia is the resources partner of choice. We represent a relative safe haven. Our large endowment of several critical minerals, our long history as a reliable supplier and our relatively low sovereign risk set us apart for many allies. The recent critical minerals agreements with the US⁵, Japan⁶ and India⁷ are testament to this.

But there is no room for complacency. Critical minerals deposits are more widely dispersed than bulk commodities, affording allies a broader range of upstream supply options.

Australia cannot afford for allied nations to reach a point of becoming supply agnostic – prioritising the timely production and supply of minerals over sovereign risk considerations. In our experience, it’s not unusual for companies or countries to be seeking supply within three to five years (or less) of executing an offtake agreement. Projects need to be relatively well advanced to meet this timeline.

When it comes to the midstream and downstream, several nations are seeking to mitigate concentration risk in their value chains and secure onshore processing to retain sovereign capability and advance those four agendas (electrification, productivity, growth and security). This poses a challenge to Australia’s own aspiration to add value to its minerals. Across the PwC Global Network, we’ve seen an increase in the number of jurisdictions seeking to industrialise endowments of critical and strategic minerals. It is becoming a crowded trade.

The latest analysis of the Australian critical minerals investable universe identified 907 Australian projects with a primary commodity on the critical minerals list. This has barely changed from PwC’s Aussie Mine 2025 report, reflecting the relatively slow rate of pipeline development.  

From a total pool of 907 projects, 675 projects (74%) are classified as exploration or reserves development. At the other end of the mining lifecycle, 87 projects (10%) are in production and a further 20 projects (2%) are under construction. There are eight processing facility projects representing 1% of the total project pool. The 117 projects in the investable universe represent just 13% of the total.

Between 2022 and mid-2026, Australia had six projects formally reach FID – four lithium projects, one rare earths project and one base and technology metals project.

But look closer:

• The first of the six projects reached FID in June 2022, followed by a near four-year gap before the remaining five declared FID between March and June 2026
• Two of the six received more than $1bn each in federal government funding, highlighting the dependence on public subsidy
• One project was a restart after an operational pause; another was an approval for a major underground expansion rather than a new project.

A narrow commodity mix

The investable universe is also narrow in its commodity mix. More than half the universe comprises projects covering just three critical minerals:

• copper (29%, 34 projects)
• nickel (15%, 18 projects)
• rare earth elements (10%, 12 projects).

Copper and nickel have dominated the investable universe since it was first developed in 2024, though the relative percentages have declined marginally over the past two years.

A further 31% (36 projects) of the investable universe cover vanadium, tin, graphite, lithium, zinc and cobalt.

The remaining 15% covers an additional nine minerals on the critical minerals list, including phosphate, alumina, titanium and tungsten.

The investable universe has projects covering 18 of the 36 minerals on the critical minerals list as their primary commodity. Several other minerals on the critical minerals list appear only as secondary or tertiary minerals that are not captured by the investable universe analysis.

Nine minerals account for 85% of projects in the investable universe. The following bar chart plots the percentage share of the total pool of 907 projects against the percentage share of the 117 projects in the investable universe for each of those nine minerals. It also plots the ‘other’ grouping of a further nine minerals, representing 15% of the projects in the investable universe.

Base metals projects (copper, nickel, zinc) and lithium represent a greater share of the total project pool than of the investable universe. The reverse is true for the remaining five minerals. Vanadium, graphite and tin are particularly over-represented in the investable universe relative to the total project pool, suggesting stronger development momentum than their overall occurrence might imply. REE, cobalt and ‘other’ show a more modest over-representation.

The need for (production) speed

Allied nations are actively seeking to secure critical minerals and onshore mid- and downstream processing. It is no longer enough to know how many projects Australia has in its investable universe – we need to know what stage of development these projects are at.

Projects in the investable universe are heavily weighted towards earlier phases of the post-exploration mining lifecycle:

• 36% are at scoping study stage (42 projects)
• 53% are at pre-feasibility study (PFS) stage (62 projects)
• Only 11% (13 projects) are at DFS stage.

Two findings stand out:

• Almost three quarters of projects (74%, 675 projects) are in the exploration and reserves development phase (i.e. not yet commenced a scoping study). Australia must find ways to fast-track these projects to expand the universe of investable projects
• Only 11% (13 projects) are at DFS phase. Australia must increase the rate at which projects move through the mining lifecycle. Just six projects reached FID in almost four years. None reached FID between July 2022 and February 2026. At this rate, Australia will not meet the immediate needs of allied nations that are putting a premium on speed to production. Nor will Australia achieve its aspiration to develop mid- and downstream facilities.

Small scale defines projects

The following chart plots the internal rate of return (IRR) and net present value (NPV) for the 25 projects for which publicly available post-tax information could be sourced. The bubble size reflects the anticipated capital spend on each project.

That only 25 of the projects in the investable universe have post-tax financial data is telling. Combined with our finding that only 13 projects in the investable universe have reached the DFS stage, it points to the relative immaturity of the Australian critical minerals pipeline.

There are 17 projects clustered to the left-hand side of the chart, none with a post-tax NPV exceeding A$500m. A further seven projects have NPVs ranging from A$500m to A$1.5bn. Generating economies of scale will be difficult for these projects. Some projects will struggle to demonstrate the economics that investors require⁹, especially when factoring in the capital cost of enabling infrastructure. This is reflected in the capex weighted post tax IRR of 27% for 23 of the 25 projects (excluding the highest IRR project and largest NPV project).

Large-scale critical minerals projects are the exception, not the rule. There is a single project (with publicly available post-tax data) with an NPV exceeding A$1.5bn. This is worth monitoring as more projects undertake scoping studies and PFS and publicly release financial estimates.

The evidence is in. Australia is not progressing the development of its critical minerals projects fast enough, at precisely the time allies are prioritising security of supply.

Australia must find ways to fast-track those critical minerals projects with a better value proposition or miss global opportunities. PwC proposes a four-point plan to do exactly that. This plan is technically feasible. What’s unknown is whether Australia has the political will to commit to the necessary actions, deploy funding at the required scale, act within allies’ timeframes, and accept a longer-term horizon for returns that exceeds the political cycle. It’s Australia’s move.

1) Fast track the right projects

A shifting critical minerals landscape demands a shift in mindset

Australia must aspire to more than enabling private investment at the margins. We need a fundamental change in mindset and approach. While the four-point plan does not call for a National Development Plan, such an approach is not without precedent in Australia. But government approaches to industry development efforts, funding, sovereign Memorandums of Understanding (MoUs) with trading partners and ongoing regulatory streamlining must be recalibrated and scaled to the problem.

A two-track system to distinguish contested from uncontested projects

It is time to think critically about how regulatory processes affect the pace of mining project development. There have been several regulatory streamlining efforts by both the federal and state governments over time – with mixed success. Despite these reform efforts, there is no evidence that they have contracted the timelines from mineral discovery to project FID.

Fast-moving projects tend to share characteristics unrelated to regulatory reform. They are in the right mining ‘postcodes’, with resolved native title, limited biodiversity value, and no land use conflicts. Most have strong links to the local community or have experienced proponents and access to funding.

Contested projects tend to involve genuine conflicts. For these projects, streamlining is not the panacea. It’s time to distinguish between process issues and sustained conflicts, and between contested and uncontested projects. No amount of process streamlining will address underlying conflicts at a project level.

Both contested and uncontested projects deserve regulatory scrutiny so we fast-track projects where we can and apply appropriate caution and conditions where we can’t. The industry would benefit from a system that distinguishes between contested and uncontested projects, enabling the latter to move through the approval process much faster. This two-track approach would accelerate straightforward projects while freeing up resources for the more complex ones.

Upfront strategic decisions about land use

Upfront decisions about land use are needed, even if they come at the political cost of closing off future optionality. Australia must acknowledge that some deposits will never be developed. This would relieve pressure on regulatory agencies and provide greater certainty about the likelihood of projects proceeding prior to the commitment of significant time, resources and capital.

Of the 900+ projects in the pipeline, some will have few or no contested attributes. These are the candidates for a fast-track system that can deliver greater velocity to FID safely and with social approval.

2) Think precincts, not projects

Critical minerals projects can look sub-scale or marginal through a bulk commodities lens (i.e. remote, contested, or unable to sustain the cost of enabling infrastructure). It remains a challenge to find investors willing to allocate capital to such projects.

A bespoke model is required to attract capital to new project types of a different scale and complexity. A shared economic platform incorporating multiple projects and common user infrastructure within a precinct could improve economics and de-risk capital and operations. Importantly, it would also create optionality that requires identification and quantification, or risk underestimation by conventional measures of value. It would also help to close the structural funding gap experienced by junior mining companies that - without a balance sheet - are reliant on external capital.

This is a model that has worked successfully in other sectors, including oil and gas, and has been pursued in efforts to commercialise green hydrogen and carbon capture, utilisation and storage. Now, it’s time to pursue precinct-based aggregation in critical minerals and unlock opportunities that no project could achieve alone.

Develop mining precincts with shared infrastructure

Given the relatively small scale of critical minerals projects, developing a precinct with shared infrastructure creates real value. There are coordination costs, and some processing must remain bespoke (for example, ore-specific processing). But shared infrastructure creates economies of scale across three addressable categories:

• Genuinely common infrastructure including electricity generation and storage, water supply, logistics (road, rail, ports), fuel, and general waste management
• Potentially shareable infrastructure including water treatment and recycling, acid supply, tailings storage (pending chemical compatibility), and environmental monitoring
• Co-located infrastructure including bespoke processing plants that benefit from common services.

To pursue precinct-style development, three things must be addressed:

i. Commercial preferences of individual companies. These can include the desire to retain control over processing, capture the full margin across an integrated value chain, protect IP, and retain autonomy over development timeframes

ii. Incentives for precinct participants. Government investment in genuinely common elements, or the creation of ‘investable product’ for sovereign and superannuation funds, can reduce the capital intensity of developments in exchange for higher operating costs via infrastructure charges

iii. A clear cost-benefit proposition. The economic benefits of a precinct must outweigh the coordination costs. These benefits include lower energy costs, amortisation of infrastructure costs across several users, workforce pooling, service clustering and avoidance of duplication.

Energy sharing could kick-start precinct design

Energy sharing is the lowest-risk, least-contested element of a precinct model and an ideal starting point – especially where mid- and downstream processing are part of the precinct master plan and investment logic. It can demonstrate the aggregation benefits and provide the foundation for further shared infrastructure over time.

A government-underwritten clean energy Power Purchase Agreement (PPA) for a critical minerals precinct is a more rational use of public funds than propping up ageing industrial facilities (unless the funds are part of the cost of facility transformation and adaption). A new industry would emerge capable of generating value-added export earnings, creating new jobs, and directing investment to the regions, with the benefits spread across several companies rather than subsidising any single one.

Such a model would require:

• Multiple parties operating in a defined area
• Electricity demand aggregated into a single PPA or suite of PPAs
• Construction of renewable energy and firming assets to serve the precinct
• A federal government-underwritten PPA, preventing market failure caused by junior miners that are unable to sign bankable PPAs and unlocking further mining investment.

Under this model, demand certainty unlocks low-risk investment in energy supply projects by developers. Miners secure long-term energy at a competitive price, and government gets security of minerals supply and decarbonised mining and processing operations.

To influence the rate at which critical minerals projects reach FID, competitively priced, firm and contracted power is required within a three-to-four-year horizon. The precinct energy model would need government adoption and quick decision-making to initiate renewable energy generation and energy storage projects in suitable locations.

Immediate steps include identifying suitable precinct targets, quantifying demand, assessing renewable resources and infrastructure gaps, designing the financial mechanism and establishing the policy and legislative framework.

Energy could form the first step to further shared utility investment, such as desalination, and commitments to the allocation of treated wastewater to a precinct in favour of discharge.

3) Transform the investment proposition for sovereign and superannuation capital

From a critical minerals perspective, Australia faces several investment conundrums:

• Taxpayer-underwritten support has largely targeted post-production stages of the mining lifecycle, rather than pre-production project development
• Evaluating sub-scale development options through conventional investment appraisal logic is unhelpful for private sector capital allocation
• More than $3.5trn in superannuation capital is seeking stable, long-duration, inflation-linked returns
• Critical minerals projects need patient capital but are struggling to attract it
• A structural credit gap exists – the companies developing critical minerals are mostly sub-investment-grade juniors.

A creditworthy intermediary could transform volatile commodity exposure into something that looks like infrastructure to sovereign and superannuation (or pension) funds and other pools of institutional and industry capital. It could also aggregate what would otherwise be fragmented supply and send an important demand signal to the industry.

A strategic reserve (or other form of offtake organisation), appropriately structured, could be that intermediary – and the key structural innovation to transform the critical minerals investment proposition. The following features would inject the confidence to secure the passage of more projects to FID, more quickly:

• Revenue support to moderate volatility
• Entry of a AAA-rated credit to improve bankability
• Contracted revenue over a term of ten to 20 years
• An appropriately designed price mechanism to balance risk allocation, address the fiscal cost to government and incentivise sovereign and superannuation investment
• Anchored to a mining precinct development rather than standalone projects, to enhance diversification, scale and liquidity with investment via a Precinct Special Purpose Vehicle (SPV).

The reserve itself could be underwritten by back-to-back contracts with allied nations and/or large, creditworthy end-users, or have allied nations participate directly in the reserve. The objective must be to move beyond MoUs and secure binding purchase commitments.

The strategic reserve would not eliminate risk, but it could transform commodity and credit risk into a structured, government-backed infrastructure-like risk – one that funds are familiar with and that sits within their mandate. This would provide a blended return profile that is infrastructure-like (regulated and contracted charges for precinct infrastructure) and commodity-linked (equity participation in mine operators, with revenues underwritten by the strategic reserve to provide downside protection).

4) Transforming ageing industrial facilities

Our analysis of the investable universe, and the levers of velocity and value, is focused on the upstream. Yet it is vital that downstream primary and secondary processing opportunities are captured – to boost upstream option values, to maintain Australia’s position as a critical minerals partner of choice and secure added value for Australians.

For most minerals, the route to customer is via ship to offshore processing. But there are emerging opportunities for primary and secondary processing to add value in Australia.

Australia has the prospect of upgrading its bulk and base metals refining and smelting operations where they could support critical minerals processing. Given the brownfield nature of these sites, expansion could be achieved without the delays typical of greenfield development. The opportunity to create new employment, rather than merely preserve existing jobs, is also significant.

It’s time to explore a downstream critical minerals processing precinct model built on the adaptation of existing bulk and base commodity processing facilities. We have identified around 15 such facilities. Several are currently receiving government financial support to retain short-term optionality.

The transformation of such sites would:

• Limit the possibility that our mineral potential is constrained
• Improve the underlying investment logic and operability needs for critical minerals projects
• Underpin a longer-term strategy focused on securing the viability of critical minerals processing
• Be an important precondition to increase the speed to production and create diversification in supply chains sought by allies
• Attract established offshore processors with the right incentives (addressing tax, land, energy, workforce/visas and capital) to access metallurgical expertise and build processing capacity in Australia more quickly.

Australia has the endowment, the allies and the opportunity. But it requires a systemic approach to the development of critical mineral value chains. This will require the convening power of government, the financial resources and ingenuity of the private sector, and the demand signal and support from sovereign actors. Progress should be judged on outcomes – what gets delivered – rather than the input logic that currently prevails. Now is the time for a fundamental change in approach to move quickly and create enduring advantage. 

Methodology note 

The PwC study of the Australian critical minerals investable universe used S&P Capital IQ market intelligence data.