Key facts
- EU Ambassador Lawrence Meredith expects significant investment in Australian critical minerals.
- The EU aims to diversify supply chains away from China.
- A 5.5% EU tariff on critical minerals will be removed once the FTA is ratified.
- Talks are close for Australia to sign an MOU with the European Investment Bank.
- EU policy proposals outline as much as €10 billion for critical raw materials within a larger €409 billion fund.
- Australia is considered a critical minerals 'superpower' by the EU.
The European Union anticipates a substantial influx of investment into Australia's critical minerals sector, driven by the EU's strategic goal to reduce reliance on China for supply chains. Ambassador Lawrence Meredith highlighted that the upcoming ratification of the EU-Australia free trade agreement, expected early next year, will eliminate a 5.5% EU tariff on critical minerals, a move he described as a 'game changer'. Discussions are also advanced for Australia to sign a memorandum of understanding with the European Investment Bank, which will serve as the EU's financial arm for these investments. The EU has proposed allocating up to €10 billion ($11.2 billion) for critical raw materials within its broader €409 billion competitiveness fund for the 2028-2034 budget period. Australia is among several 'superpowers' in critical minerals, including Brazil, South Africa, and Canada, that the EU is targeting for investment across the entire supply chain, including processing.