Australia Backs Smelters to Secure Critical Mineral Supply Chain

In a strategic move to secure critical mineral supplies and lessen dependency on China, Australia announced a substantial A$135 million support package for two smelters owned by Nyrstar, a Trafigura unit. Faced with rising energy costs and a supply glut from China, the Australian metals processing sector demands urgent investment and innovation.

This financial backing, a collaborative effort between federal and state governments and Nyrstar, aims to stabilize operations in South Australia's Port Pirie and Tasmania's Hobart facilities. While exploring modernization, priorities include fast-tracking an antimony pilot plant and enhancing the production of germanium and indium, critical minerals for energy transition and defense applications.

However, the move to modernize Australia's aging smelters confronts significant capital requirements, placing government and taxpayer support in the spotlight. As Western allies prioritize alternative supply chains, geopolitical risks underscore the urgency, with China's dominance in critical minerals processing posing an unacceptable strategic risk according to officials.