When India invests in Aus, it will secure own supply chain: Madeleine King

We want to work with like-minded partners like India, who is a strategic partner through QUAD, says Madeleine King, Minister for Resources and Minister for Northern Australia

Critical minerals are one of the core discussion agendas during the visit of Australian ministerial delegation led by Prime Minister Anthony Albanese in India this week. Taking forward the Australia-India critical minerals partnership signed last year, Australia is now opening investment doors for Indian companies in rare earth and critical mineral mining and export. In an exclusive interview, Madeleine King, minister for resources and minister for Northern Australia, shares with Shreya Jai investment strategies both countries can look at to build a robust critical mineral supply chain. Edited excerpts:

How is the India-Australia critical mineral partnership shaping up?

After last year, when India-Australia entered into a critical mineral investment partnership, both governments are looking to do due diligence into projects together, to assist the private sector and see how it might choose to invest in Australia. India and the world need the resources sector to get to net zero. We have a traditional resources sector and an emerging sector of critical minerals with the largest supply of lithium, cobalt and rare earth materials. We want to work with like-minded partners like India, who is a strategic partner through QUAD. When India invests in Australia, it invests in securing its own supply chain. That will also include mineral extraction, processing and a few steps along that supply chain and a part of that will go into India’s battery manufacturing supply.

China is also establishing its own supply chain for owning and exporting critical minerals. Where is Australia placing itself?

The pandemic demonstrated that economies need to secure their supply chain and not place too much reliance on any one market. Australia has always depended on open and fair trade. International trade and commerce are of vital importance to us. Though we have excellent partnerships with China in iron ore and coal, we can be competitors in the critical mineral space. China has invested a lot in that and we think we should be doing the same thing.

What prospects would Indian investors have in the Australian critical mineral sector?

Once we identify the potential projects, we would know how they best fit with the investment plans of private companies in India. Both the governments can support this through capital investment and (financing) lines for private firms. We are both open market economies and have large businesses, which employ a large number of people. And, that is exactly what we need. Within the $15-billion National Reconstruction Fund (NRF), $1 billion is committed to value-adding the resources through not just extraction but processing.

What incentives can Indian investors expect from the Australian government in critical minerals?

We are still looking at projects under the investment partnership. Some of these projects will be eligible for low-interest loans from the Australian government. There are funds available to any project that meets certain requirements. These are lines not grants. Once projects are identified and investors want to take them up, the government will give support as the next step. There could be a critical mineral facility that is value adding to NRF. Or, the location of the project, may make it eligible for Northern Australian Fund. We are hopeful that projects that are being worked upon by Indian and Australian companies under the critical mineral partnership should find themselves eligible for such funds.

What is the status of Indian investment in critical minerals?

There are talks underway with the Indian government and companies. These companies would need to do their due diligence. There is some interest from Indian companies on cobalt. Instead of just taking the offtake, Indian companies must get involved at the ground level – mine development, operations, and investing as an equity partner.

The critical mineral sector is devoid of any global standards. Will Australia take the lead in that and what can investors expect?

There are currently no international standards. Yet, on critical minerals, India and Australia can work on that. There are sensible rules and guidelines around ethical sourcing of critical minerals and these are the standards we are looking at. We have got a very mature mining sector. We are meeting very high environment, social and governance (ESG) targets. Australian miners are the highest paid in the country, where safety and environment rules are very strict. Critical minerals will cost more to produce in Australia given the high standards and there might be a premium on that.