The Association of Mining and Exploration Companies (Amec) has welcomed fresh detail on the Australian federal government’s proposed Critical Minerals Strategic Reserve, while pressing the case for a market-based support mechanism to underpin the initiative as it moves toward implementation.

Amec said the government’s announcement marked an important step forward in establishing the Critical Minerals Strategic Reserve (CMSR), with an initial focus on rare earths, gallium and antimony.

Treasurer Jim Chalmers, Resources Minister Madeleine King and Trade Minister Don Farrell on Monday outlined plans for legislation to be introduced when Parliament resumes in 2026, granting expanded powers to Export Finance Australia (EFA) to administer the reserve. The government is targeting commencement of the CMSR in the second half of 2026.

Amec CEO Warren Pearce said the industry had been closely engaged with government on the design of the reserve. However, key elements of the framework were still to be finalised, particularly around how the reserve would operate in practice.

Amec has been advocating for the adoption of its proposed Rare Earths Production Scheme (REPS) model as a cornerstone of the CMSR. Developed with input from consultancy Mandala Consulting and ten Australian rare earths developers, the REPS framework is designed to support both heavy and light rare earth projects while limiting fiscal exposure for taxpayers.

Under the REPS model, government support would be delivered through a contract-for-difference mechanism with a price collar, providing revenue certainty during periods of low prices while allowing upside to flow back when market conditions strengthen. Amec says the approach mirrors the logic of the Capacity Investment Scheme used in the energy sector, with a focus on derisking investment rather than direct subsidisation.

“Our recommended model centres around rare earths and provides a mechanism that meets the objectives of government, helps support the growth of rare earths projects in Australia, while also minimising risks to taxpayers,” Pearce said.

Amec has also stressed that the success of the CMSR will depend on improvements to state and federal permitting systems, warning that slow or complex approvals could undermine the government’s strategic objectives.

“It is vital the government is able to ensure state and federal permitting processes are appropriate, efficient, streamlined and fit-for-purpose to enable rare earth, gallium and antimony projects to proceed,” Pearce said.

The industry body said it would continue to advocate for the REPS model as the government refines the design of the CMSR and prepares enabling legislation.

Amec added that it stood ready to work with policymakers to ensure Australia captured the full economic and strategic value of its critical minerals endowment, with the REPS model positioned as a practical pathway to turn the strategic reserve from policy concept into operational reality.