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Highlights
- Australia is the world’s leading producer of lithium and holds a significant position in the production of iron ore, lead, zinc, nickel, and gold.
- Critical metals are the most important components required for the development of emerging economies like China and India.
- Australia aims to expand its critical metal market share by establishing a loan facility for the projects.
The mining industry has been one of the most important pillars of the Australian economy. The country is the world's leading producer of lithium. Moreover, the country also holds a position in the top five producers of iron ore, lead, zinc, nickel, and gold globally. The country's mining sector accounted for nearly 10% of the total GDP in 2020 and continues to be a major contributor to the nation’s growth.
Australia, the powerhouse of minerals, has more than 350 mines operating in the country, with more than 30% of them located in Western Australia, 25% in Queensland, and 20% in the NSW region.
Also Read: How is Tesla shaping battery material investment in Australia
Australia’s position in critical metals sector
Critical metals are the most important components required for the development of emerging economies like China and India. However, the countries may face supply deficits of critical metals due to geopolitical issues, trade policy or geological scarcity.
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Australia is a significant supplier of critical metals globally. The country’s demand for critical metals is relatively less, and most of the production is exported.
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The country is already amongst the leading suppliers of bauxite, zinc, lead, manganese, copper, and numerous other commodities worldwide. Additionally, the country ranks second in the world in production of uranium, lead, ilmenite, and zircon.
Expansion of critical metal market share
The mineral-rich nation now aims to expand its critical metal market share by establishing a loan facility for the projects. Scott Morrison, Prime Minister of Australia, said that the country would establish an AU$2 billion loan facility for critical material projects and fund those to help fill the financial gaps in the development of projects.
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Australia has already conquered the battery metal mining sector and is the leading exporter of lithium globally amid burgeoning demand for electric vehicles. Lithium is used for the manufacturing of lithium-ion batteries, which is the powerhouse of contemporary EVs. The facilitation of loan facilities is expected to encourage miners to discover new exploration sites and prioritise onshore refining of minerals.
Must Read: Here's how the iron ore rally could benefit Australia's 2021 Federal Budget
The funding facility will also help establish the mining sector of the country and aid miners to enhance and establish new trade relations.
Bottom Line
Australia has already been ranking among the leading nations with respect to its metals and mining industry. Now, establishing a loan facility for critical material projects would help the country enhance its stance while expanding its critical metal market share and assisting in the development of projects.
