Australia’s ruling Labor government has pledged to establish a strategic reserve of critical minerals, with an initial investment of AUD 1.2 billion ($766 million), if re-elected in the upcoming national election.

Prime Minister Anthony Albanese said Thursday that establishing a critical minerals strategic reserve would help boost the country’s economic resilience. 

Under the plan, the government would buy, own, stockpile, and sell the country’s critical minerals, including rare earths. It’s unclear, however, whether the plan would cover all 31 minerals on Australia’s critical minerals list.

“It will mean we can deal with trade and market disruptions from a position of strength,” Albanese says. “Because Australia will be able to call on an internationally-significant quantity of resources in global demand.”

Specifically, the plan aims to introduce two new mechanisms: national offtake agreements and selective stockpiling. Under the former, the government would sign voluntary offtake deals to buy critical minerals from Australian miners or have the option of buying them at a certain price. It will also establish stockpiles of “certain key critical minerals” produced under the offtake agreements.

“In a time of global uncertainty, Australia will be stronger and safer by developing our critical national assets to create economic opportunity and resilience,” the Prime Minister adds. “To leverage our natural resources is in our national interest. I will ensure that Australia continues to produce and benefit from the resources that are essential to our national interest.”

Australia’s national elections are scheduled for 3 May, Kallanish notes.

Commenting on the plans, Tania Constable, ceo of the Minerals Council of Australia,  says: “While we acknowledge that a reserve may increase Australia’s chances of limiting the impact of US tariffs, this initiative is certainly not without domestic risk and may impact the commercial viability of operations through continued downward pressure on commodity prices.”

She adds that the objective and merits of such reserve “remain unclear” and must be evaluated against other opportunities to leverage the mining industry.

Canberra’s proposal comes as China this month limited the export of seven rare earth elements and magnets, amid the ongoing trade war with the US. Although Australia has significant rare earth reserves, refining takes place mainly in China.