Billions of dollars from the United Arab Emirates (UAE) could soon be directed towards Australia’s critical mineral sector, following a newly agreed trade pact set to be finalized in early November. This agreement aims to reduce trade tariffs and grant access to a multitrillion-dollar investment fund, which is crucial for the development of clean energy technologies.
Trade Minister Don Farrell expressed optimism about the impending influx of investment, stating that the agreement would signal to UAE officials that Australia is “open for business.” He anticipates that significant investments will begin flowing in before the end of 2024, potentially before Christmas.
The UAE, traditionally reliant on petrodollars, is now focusing on clean energy investments that require critical minerals essential for battery technologies. Among the 55 “shovel-ready” projects identified for investment is the Kookaburra Gully graphite project in South Australia, managed by Lincoln Minerals. Director Julian Babarczy noted that while there is international interest, he has yet to be approached by UAE officials, but he believes such investment would be significant for the project.
Babarczy emphasized that graphite, used in lithium-ion batteries, is a strategic critical mineral expected to face supply shortages. He also mentioned a separate green iron ore project seeking substantial offshore investment, highlighting the UAE’s interest in developing green steel mills.
Despite Australia’s rich deposits of critical minerals, experts like Professor John Mavrogenes are concerned about the country’s ability to compete with China’s processing capabilities. He pointed out that Australia struggles to process minerals as cost-effectively as China, which sets the wholesale prices for these materials. According to Mavrogenes, if Australia focuses solely on exporting raw minerals, it may miss out on the significant profits associated with downstream processing.
While there is potential for Australian lithium in the market, the overwhelming dominance of Chinese processing poses a considerable challenge. “Australia is in a real quandary,” he stated, indicating that without substantial investment and strategic shifts, the country may continue to lag behind in the global battery race.