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  • Writer's pictureFlow Australia

Extra $2b to finance critical minerals 'lacks ambition'

An extra $2 billion for the critical minerals supply chain will form part of the Albanese government's plan to support allies and overhaul the economy.

A $2 billion boost to the critical minerals industry has been criticised as a "token" effort that won't win the race for energy transition capital.

Electric cars, wind turbines, smart phones and satellites depend on reliable supplies of critical minerals and rare-earth elements that Australia has in abundance, but China dominates the supply of factory-ready supplies.

Prime Minister Anthony Albanese has announced a doubling of financing for mining and processing projects that will support high-tech manufacturing in Australia and supply chains for US car-makers and battery factories.

He made the commitment during his US visit after the first Australia-United States Taskforce on Critical Minerals meeting.

"My government is committed to transforming Australia into a renewable energy superpower and harnessing the critical minerals we have at home is crucial to achieving this," Mr Albanese told reporters in Washington DC.

The extra $2 billion will double the capacity of the Critical Minerals Facility to support clean energy, manufacturing and defence, Mr Albanese said.

"Australia is committed to building sustainable and secure critical minerals supply chains with the United States - this is central to building a clean energy future and delivering economic growth."

Resources Minister Madeleine King, who is also travelling with the prime minister, said co-operation with US industry and scientific agencies was important.

"The road to net zero runs through Australia's resources sector," she said.

The finance facility, managed by Export Finance Australia, takes on some of the risk that would otherwise be a barrier to expanding from raw materials to downstream processing.

"Coupled with our support for processing, we are well positioned to be a world leading provider of critical minerals, including rare earths elements, and to support global efforts on clean energy transformation," Ms King said.

But opposition leader Peter Dutton said companies also need faster approvals for new projects to attract investment.

"I really welcome the announcement, but the government is not approving any new sites," Mr Dutton told reporters in Kulnura, NSW.

He also warned of "sovereign risk" from changes to workplace laws as trusted partners such as South Korea and Japan take their capital elsewhere.

"Industrial relations changes are sending a shiver down the spine of all of those mining companies and they're now not proceeding with projects, he said.

"So the government, on the one hand, hits the accelerator and then taps the brakes.

The Business Council of Australia welcomed the announcement, with chief executive Bran Black saying it aligns the interests of the US and Australia.

"We can see this as a win-win for both countries and an enormous opportunity for Australian business," he said.

But Tim Buckley, director of independent public interest think tank Climate Energy Finance, said $2 billion was "a mere token response" to the Biden administration's $US1 trillion ($A1.6 trillion) industrial and energy stimulus - the biggest in US history.

"It isn't even a down payment, it is so lacking in courage, conviction and ambition," Mr Buckley told AAP.

Mr Albanese and US President Joe Biden are expected to announce plans to co-operate on technological innovations, including artificial intelligence, space, clean energy and critical minerals.

Meanwhile, plans for the state dinner at the White House have been changed, with a performance by legendary US band The B52s for Australia's part-time DJ prime minister shelved amid global tensions.

"The band will attend the dinner as guests, and the president's own Marine Band and the Army and Air Force Strolling Strings will provide instrumental music for the dinner," First Lady Jill Biden told reporters.


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