Critical Minerals Strategic Reserve

In 2025, the Government of Australia announced the creation of a Critical Minerals Strategic Reserve (CMSR) to strengthen the country’s economic security, supply chain resilience, and role as a reliable supplier in global critical minerals markets, including for clean energy, advanced manufacturing and defence applications.

The CMSR is a supply management mechanism through which the government, via Export Finance Australia (EFA), can secure rights to production (e.g. via offtake agreements), aggregate supply, support projects financially, and selectively stockpile minerals, with the ability to on-sell these volumes to domestic users or international partners in response to demand or disruptions. The reserve targets an initial subset of critical minerals with vulnerable supply chains and strong Australian production potential, including rare earth elements (e.g. neodymium, praseodymium, dysprosium), gallium, and antimony, selected based on their importance for clean energy technologies, advanced manufacturing, and defence applications.
 
By providing tools such as stockpiling, price stabilisation mechanisms, and guaranteed offtake, the CMSR aims to de-risk investment in projects where private finance is constrained by market volatility, mitigate supply shocks, and address market distortions. The initiative was backed by USD 1.2 billion in funding under the 2025-26 federal budget, with operations expected to commence in the second half of 2026, and supported by a dedicated taskforce within the Department of the Prime Minister and Cabinet.

The legal basis for the reserve was established in 2026 through the Export Finance and Insurance Corporation Amendment (Strategic Reserve) Act 2026, which amended the Export Finance and Insurance Corporation Act 1991 to introduce a new Strategic Reserve function and enable the government to direct EFA to undertake financial and contractual activities underpinning the reserve’s operations.

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