PERTH (miningweekly.com) – Australia is well placed to respond to an anticipated increase in demand for critical minerals, a new report by the Office of the Chief Economist in the Department of Industry, Science, Energy and Resources has shown.

The report, titled 'Outlook for Selected Critical Minerals Australia 2021', has forecast growing demand for critical minerals out to 2030, and has highlighted opportunities for Australian production and investment in downstream value-adding processes.

The report examines the outlook for rare earth elements, as well as critical minerals cobalt, graphite and vanadium, which have conventional applications in steel-making but are also crucial for battery and electric vehicle (EV) applications.

The report found the broad market outlook for these minerals is promising, with consumption growth for EVs and the battery storage sector expected to outpace production growth in the coming years. Rare earth elements neodymium, praseodymium and dysprosium are also expected to see consumption growth.

The four critical minerals chosen for this report were investigated owing to Australia’s relatively favourable resource endowment and the prospects for strong market growth. These minerals are featured in the official US, EU and Canadian critical mineral lists, reflecting their importance in terms of future consumption and economic security requirements, the report read.

While these minerals have important uses in conventional applications such as steel production, catalysts, pigments and other uses, these minerals are all used in battery and EV applications, meaning expectations of transport electrification and energy storage advancements could significantly impact the respective markets.

“Australia is blessed with abundant resources and a highly-skilled workforce which is ready to transform these minerals and elements into the kinds of products the world needs,” federal Resources Minister Keith Pitt said.

“Australia has long-established supply chains and is well placed to provide raw materials and potentially refined products to the world.

“Australia is already the world’s top producer of lithium, and the government’s Critical Minerals Facilitation Office is supporting the development of other resources, downstream processing, and helping to diversify global supply chains.

“Australia also has a stable investment environment and stable governance arrangements that make Australia an attractive location for critical minerals investment and development,” the Minister said.

The report noted that the development of Australia’s cobalt, graphite and vanadium resources, as well as lithium, and associated downstream investment, could see the battery value‐‍add supply chain expand in Australia. It noted that domestic lithium refining is rapidly expanding, and that there is potential for rare earths refining and for domestic manufacturing of vanadium batteries and graphite anodes.

Australia is currently the world’s fourth-largest producer of rare earth elements, and hosts 3.4% of the world’s rare earth resources, along with 19% of the world’s known cobalt resources, of which it is the second largest producer in the world behind the Democratic Republic of Congo.

Furthermore Australia also hosts 3% of the known graphite resources, while its vanadium resources are the third largest in the world accounting for 18% of world economic demonstrated resources.