EU Expects Major Investment Wave in Australian Critical Minerals

The European Union expects a wave of investment in Australian critical minerals, its ambassador to Australia said on Tuesday, as the bloc works to cut its reliance on China for the materials that go into batteries, magnets and defence equipment.

Lawrence Meredith, the EU ambassador, said in Sydney that the bloc will be investing heavily in critical minerals, and that Australia is one of the most likely partners because the EU wants to spread its supply beyond China. His remarks were reported by Reuters on Tuesday, October 27.

Australia and the European Union struck a free trade agreement in March after eight years of talks. The deal removes tariffs on almost all goods and gives EU buyers easier access to Australian critical minerals. Once both sides sign and ratify the agreement, expected early next year, a 5.5 percent EU tariff on critical minerals will be removed.

Money and a bank deal are close

Talks are very close for Australia to sign a memorandum of understanding with the European Investment Bank, Meredith said. The bank would act as the bloc's funding vehicle for the investment push.

EU policy proposals set aside as much as 10 billion euros, about 11.2 billion dollars, for critical raw materials. The money sits inside a larger competitiveness fund of 409 billion euros, as the EU debates its budget for 2028 to 2034.

What Europe wants first

The bloc is looking first at the minerals Australia will put at the centre of its strategic reserve: gallium, antimony and rare earths. Gallium goes into chips and radar. Antimony is used in ammunition and flame retardants. Rare earths go into magnets for electric vehicles, wind turbines and weapons systems.

Australia said on Tuesday that it will refresh its critical minerals strategy, with more weight on refining and processing at home. That shift matters to miners. Digging ore in Australia and processing it in China has been the usual pattern. More processing in Australia would keep more of the value, and more of the supply, outside China.

Meredith said the EU also expects to invest along the supply chain, including in processing, and in other mineral rich countries such as Brazil, South Africa and Canada. He said Australian companies that move faster through early project development would speed up the flow of European money.

Why it matters

China dominates the processing of most critical minerals. A trade deal alone does not change that. A funding vehicle, a tariff cut and a place in the EU budget are the steps that turn a deal into mines, refineries and contracts. For Australia, European demand offers a second large buyer next to the United States and Japan, at a time when competition for investment in new projects is rising.

What happens next

The next markers are the signing and ratification of the trade agreement, expected early next year, the European Investment Bank memorandum, and Australia's refreshed strategy paper. The speed of project approvals in Australia will decide how much of the European money arrives as built plants, and how much stays as announcements.