Australia is actively considering the introduction of a price floor for critical minerals as part of a broader strategy to attract foreign investment and bolster domestic mining and processing capabilities.

Resources Minister Madeleine King said the government is exploring mechanisms that would provide pricing certainty for producers, particularly in sectors dominated by Chinese supply, addressing market volatility that has hindered new investment.

King outlined that potential price floors would be structured through Export Finance Australia and linked with national offtake agreements aimed at encouraging long-term project financing and development.

The policy discussions took place during an international summit on critical minerals in Washington, where Australia highlighted the importance of reducing reliance on single-source supply chains for materials essential to defence technologies, clean energy and advanced manufacturing.

Canberra holds some of the world’s largest reserves of rare earth elements but trails in processing and refining capacity, making it dependent on foreign capital and expertise to build value-adding infrastructure.

This move reflects a strategic effort by the Albanese government to position Australia as a reliable alternative supplier to the global market.

Australia’s proposal coincides with parallel efforts by allies, including the United States, which has launched initiatives to guarantee minimum prices and strategic stockpiles for rare earths to underpin domestic industry.

King noted that pricing certainty would help shield companies and investors from the volatile nature of mineral markets and improve project bankability.

The prospective floor mechanism is also linked with Australia’s A$1.2 billion Critical Minerals Strategic Reserve, aimed at securing essential inputs for high-tech and defence applications and reinforcing economic resilience.

Financial markets responded positively to the prospect of policy support for the sector, with shares in Australian rare earth producers rising as investors interpreted the move as a sign of government commitment to the industry’s long-term viability.

Industry leaders and analysts welcomed the price floor discussions, saying they could unlock greater upstream and downstream investment and enhance Australia’s role in global critical minerals supply chains.

Government officials have stressed that detailed implementation plans are still under development and that any price floor would be designed to complement existing frameworks rather than replace market fundamentals.