Australia has a narrowing window to strengthen its position in global critical materials supply chains, with a new EY Net Zero Centre report arguing that the next phase of value creation will depend less on resource endowment and more on processing capability.
The report, Risk and resilience: Rethinking Australia’s critical materials advantage in a disorderly world, says the geopolitical landscape is reshaping global supply chains, as demand for critical minerals accelerates and countries seek to reduce reliance on concentrated processing hubs.
While Australia is well positioned to benefit from growing demand for lithium, cobalt, nickel, copper and rare earths, the report argues its geological advantages alone will not guarantee long-term competitiveness.
Instead, it identifies processing and refining as the critical leverage point, noting China continues to dominate global refining capacity across most critical materials following years of sustained state-directed investment.
EY said projected demand growth creates an opportunity to diversify supply chains over the next five to 15 years. The report forecasts lithium demand to increase fivefold by 2040, copper demand to triple, and demand for other critical materials to at least double.
The report argues that no single country can secure critical mineral supply chains alone, calling for stronger partnerships between governments and industry to build resilient extraction, processing and manufacturing networks.
It identifies three priorities for improving resilience: recognising the changing geopolitical environment, assessing risks across supply chain leverage points, and building trusted partnerships with like-minded nations.
The report also points to Australia’s 2025 Critical Minerals Strategic Reserve as an example of governments taking a more active role in supporting strategically important projects through measures including government-backed offtake agreements and selective stockpiling.
Among its recommendations, EY urges businesses to pursue higher-value midstream processing opportunities, while calling on governments to reduce investment risk, accelerate project approvals and enabling infrastructure, and develop shared processing precincts.
The report concludes these measures should be implemented over the next one to three years to strengthen Australia’s long-term competitiveness in critical materials supply chains.
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