The global trade and investment environment for critical minerals is rapidly changing and Australian critical mineral explorers, developers and producers need to understand the implications for their businesses and the impact on individual projects of a range of possible scenarios.

In a special report released on Monday, coinciding with the yearly Diggers and Dealers in Kalgoorlie, Deloitte said countries and industries across the world were locking in supply of minerals critical to delivering the transition.

Australia, and particularly Western Australia, is a major player in the extraction of critical minerals. It is also one of the most prospective jurisdictions to supply the world’s mineral needs.

In 2023 Australian mines delivered 54% of the world’s raw lithium production. Australia (and specifically Western Australia and Queensland) also delivered over 20% of the world’s alumina, 15% of the world’s rare earths concentrate, and was a top-five producer of nickel, cobalt and platinum group metals.

“The trade and investment environment is changing in response to limited diversification of global supply and increasing demands for ESG value chain transparency.

“Australian miners have some significant advantages to position for a world where there are greater ESG requirements on mined or processed minerals or where there is a broader trade war. In fact, it can be argued Australia would be critical to any such scenario, “ said report author, Deloitte energy and climate transition lead partner Matt Judkins.

“Currently, however, our comparative advantages, such as strong environmental and regulatory settings,  are not valued in the global demand-supply dynamic.

“Industry and government must consider how to ensure this value is recognised in the global trade environment for minerals critical to the energy and climate transition.

“This will be essential to ensure Australia’s critical minerals sector is best positioned to become a commercially sustainable supplier.

“With so much economic upside, there is a significant opportunity for Australian developers to take advantage of the changing global landscape by aligning projects to support diversification of the value chain for critical minerals through the extraction, refining and production as the climate transition gathers pace.”

It is estimated that for the world to reach net zero, investment of about $9-trillion a year will be required each year until 2050, including to support the transition of global energy and industrial sectors to net zero.

“This is an unprecedented level of capital investment, and a significant proportion of this investment will flow into critical minerals extraction, and processing of these minerals into useable chemicals and end-product development,” Judkins said.

“Many countries have developed their own critical minerals lists. Mineral extracting countries like Australia are focused on the demand side, and the economic opportunity for Australia providing the world the minerals it needs for the energy transition, as opposed to resolving supply chain and security issues for Australian industry

“To really understand the role of critical minerals in the energy transition requires an understanding of the entire product value chain, from mining through to chemical processing and end product development, not just the source of the mineral itself.”