Australia is moving to secure its supply of essential minerals amid global competition. The federal government’s funding for Nyrstar’s smelters is a strategy to reduce dependence on Chinese processing of essential metals. By supporting domestic facilities, the goal is to ensure a stable supply of minerals such as antimony, bismuth, germanium, and indium, vital to the energy, defense, and high-tech industries.
Federal funding safeguards Nyrstar smelters and strengthens Australia’s minerals strategy
Australia said on Tuesday that it will provide A$135 million ($87.4 million) in financial support for two smelters owned by Trafigura unit Nyrstar, as part of its strategy to become a key supplier of critical minerals to Western allies.
The funding, announced by federal and state governments and supported by investment by Nyrstar, comes amid growing worries about supply chain vulnerabilities tied to China that have ramped up pressure on Western nations to secure access to critical minerals vital for the energy transition and defense.
Support targets modernization and expansion of critical minerals production
High costs and global competition are ongoing challenges for Nyrstar. Energy-intensive operations, labor costs, and competition from Chinese producers continue to place pressures, making government assistance even more important. Funding will allow the smelters to remain operational while pursuing modernization and new critical mineral projects, ensuring Australia can compete as a reliable supplier to Western allies.
Australia aims to position itself as a main player in this shift, but its metals processing sector is under strain from high energy and labour costs, while oversupply from top producer China continues to depress prices.
Strategic review and modernization plans set to boost critical mineral output
Earlier this year, Nyrstar put its troubled Port Pirie lead smelter in South Australia and Hobart zinc processing operations in Tasmania under strategic review, citing high energy prices and lower processing fees. The support package will now allow Nyrstar to maintain operations while it explores modernization of both facilities and accelerates studies to produce critical minerals.
Nyrstar will prioritize the Port Pirie antimony plant and other modernization efforts, aiming to produce essential metals for batteries, ammunition, and electronics. These initiatives align with the government’s goals of reducing geopolitical risks, diversifying global supply, and strengthening Australia’s position in the critical minerals market.
The initial focus will be on fast-tracking an antimony pilot plant in Port Pirie, Nyrstar said. It first told Reuters in May that it was considering production of the metal used in ammunition and lead-acid batteries at the site. But modernizing Australia’s ageing smelters will require significantly more capital, potentially testing the government’s, and taxpayers’, resolve.
China, which dominates global processing of many critical minerals, has over the past year imposed restrictions on antimony and rare earths exports, disrupting supply chains for industries including automotive and defense and underscoring the geopolitical risks of over-reliance on Chinese refining.
Western governments prioritize alternative smelting to counter Chinese dominance
Bolstering an alternative supply chain has become a top priority for Western governments and for the Trump Administration. South Australia Premier Peter Malinauskas warned that without Western intervention, China could hold all the world’s smelting capacity. “That’s an unacceptable risk, particularly in the current geostrategic environment,” he told broadcaster ABC.
Australia’s minister for industry and innovation, Tim Ayres, told the ABC that he expected Port Pirie would be capable of producing 15,000 metric tons of antimony metal. Antimony is an alloy hardener for other metals in ammunition and batteries and is critical for the manufacturing of semi-conductors found in electronics and defense applications. It is also used in flame retardant materials.
By funding Nyrstar and promoting the modernization of smelters, the Australian government demonstrates its commitment to mitigating supply chain vulnerabilities, fostering industrial innovation, and contributing to a broader energy transition and defense readiness, in collaboration with Western partners.
GCN.com/Reuters