Over the past week, several positive announcements have been made for Australian listed critical minerals mining companies and critical minerals projects within Australia. These announcements foreshadow that these companies and projects could benefit from a number of cross-border and collaborative multi-jurisdictional funding initiatives, which aim to deliver sustainable investment in global critical minerals supply chains.
As discussed in our Critical Minerals Series, Australia’s critical minerals are vital in a range of emerging technologies, the energy transition, AI, and other crucial fields such as medical applications and defence. Given the increasingly “critical” nature of these minerals globally, their supply chains are increasingly under focus, and are currently the subject of intensifying international competition.
In this update, we highlight some very recent public developments which may enable ASX listed mining companies and Australian based critical minerals projects to utilise funding and co-operation opportunities from abroad.
Accessing US subsidised loans and grants
Recently, the US Department of Energy pledged hundreds of millions of dollars of loans and grants to ASX-listed critical minerals companies for projects involving lithium, and for the development of battery-grade manganese refineries, where those projects take place in the United States. [1], [2], [3]
Last week, Australian Prime Minister Anthony Albanese engaged in sideline discussions with US President Joe Biden at the Quadrilateral Security Dialogue held in Delaware. Albanese advocated the classification of Australian critical minerals as “American produced”, where they are sent to US companies for use in battery and other component manufacture, so that Australian critical minerals miners may access subsidised loans through the Export-Import Bank of the United States (EXIM). Mr Albanese said ‘these are complex relationships that we are attempting to put together’, that required time to be resolved.[4] It will be interesting to see if this characterisation is accepted by EXIM.
Minerals Security Partnership takes shape through the establishment of the MSP Finance Network
Separately, on 23 September 2024, the US, Australia, Canada, Estonia, Finland, France, India, Italy, Japan, the Republic of Korea, Norway, Sweden, the UK and the EU (represented by the European Commission), together released a joint statement announcing the establishment of the Minerals Security Partnership (MSP) Finance Network (MSP Finance Network) (Joint Statement). The MSP partner institutions (comprising the development finance institutions and export credit agencies of the partner nations) emphasised that the scope and scale of meeting the rapidly increasing global demand for critical minerals to achieve the clean energy transition is beyond the purview of any single institution.[5]
The Joint Statement summarises the underlying intent and purpose for the MSP Finance Network as follows:
“Creation of the MSP Finance Network reflects a desire to strengthen information sharing, coordination, and collaboration among the network participants. This will drive sustainable investment in global critical mineral supply chains, including by mobilizing private sector capital, in production, extraction, processing, recycling, and recovery projects. The participants also affirmed their commitment to advancing critical mineral projects that are sustainable and adhere to high environmental, social, governance, and labour principles and promote local value creation, with a clear and measurable positive development on local economies and communities. These standards are essential to ensuring that local communities see benefits from the important role critical minerals are playing in the global economy for years to come.” [6]
Impact on Australian critical minerals investment?
Prime Minister Albanese’s push for the US to classify Australian mined critical minerals as “American produced”, and the recent establishment of the MSP Finance Network, reflect what appears to be a concerted international effort to increase and harmonise both private and public funding in the development of critical minerals projects.
Together with the Federal Government’s recent initiatives (refer to our earlier Critical Minerals Insight of 31 May 2024), the ability to secure international funds through EXIM and the MSP Finance Network may bolster and provide greater confidence in Australia’s critical minerals sector.
The Network includes the U.S. International Development Finance Corporation (DFC), Export Finance Australia (EFA), Export Development Canada (EDC), Estonian Investment Agency, European Investment Bank (EIB), European Battery Alliance, Euler Hermes, Export-Import Bank of the United States (EXIM), Finnvera, Finnfund, Nordic Investment Bank (NIB), InfraVia Capital, Banque publique d’investissement, Agence Française de Développement (AFD), Proparco, KfW Group, CDP (Cassa Depositi e Prestiti), SACE, SIMEST, Japan Bank for International Cooperation (JBIC), Japan International Cooperation Agency (JICA), Japan Organization for Metals and Energy Security (JOGMEC), NEXI (Nippon Export and Investment Insurance), Export Finance Norway (Eksfin), Innovasjon Norge, Export-Import Bank of Korea (KEXIM), Korea Mine Rehabilitation and Mineral Resources Corporation (KOMIR), Korea Trade Insurance Corporation (K-Sure), Korea Institute of Geoscience and Mineral Resources (KIGAM), Exportkreditnämnden (EKN), UK Export Finance (UKEF), and British International Investment (BII), plus the European Bank for Reconstruction and Development (EBRD) and the Africa Finance Corporation (AFC).
