How The Australian Government Supports Australian Rare Earth Projects

[John]

I thought I might do a quick post on how the Australian Government invests into rare earth mines/projects. This analysis only goes back 4-5 years. But it also highlights the different Govt agencies, their roles and how they work together (in theory). . NOTE: It does not cover the State or Local council assistance that is provided. That might be a new post.

Examples of Federal Support for Rare Earth Companies (NdPr Focus)​

Over the past five years, the Australian federal government has actively supported companies in the rare earths sector – especially those producing neodymium-praseodymium (NdPr) for high-strength magnets – through grants, loans and strategic investments. Notable examples include:

• Lynas Rare Earths – Received an A$14.8 million grant (July 2021) under the Modern Manufacturing Initiative (Department of Industry) to commercialise a new refining process for high-purity rare earth carbonate at its Kalgoorlie processing plant. This grant covers about half the cost of implementing the new refining process and helps Lynas expand downstream processing in Australia.
• Iluka Resources – Secured a A$1.25 billion federal loan (April 2022) through the government’s Critical Minerals Facility (administered by Export Finance Australia) to establish the Eneabba Rare Earths Refinery in Western Australia. This refinery – Australia’s first fully integrated rare earth separation plant – will produce Nd, Pr, Dy and Tb oxides for use in EVs, wind turbines, and electronics. In December 2024, an additional A$400 million loan was approved to cover cost overruns, bringing total government loan support for Iluka’s project to A$1.65 billion.
• Hastings Technology Metals – Obtained a Northern Australia Infrastructure Facility (NAIF) loan of A$140 million (Feb 2022), later increased by A$80 million to A$220 million (Jan 2023), to finance its Yangibana rare earth mine and processing plants in WA. This funding (approved by the NAIF board and federal minister) supports construction of the NdPr-rich Yangibana project, which will deliver mixed rare earth carbonate and is expected to supply ~6–8% of global NdPr demand.
• Arafura Rare Earths – Backed by a combined government financing package of up to A$840 million (announced March 2024) to develop the Nolans NdPr mine and refinery in the Northern Territory. This includes debt funding from Export Finance Australia and NAIF, covering roughly half of Nolans’ capital cost and enabling Australia’s first fully integrated rare earth mine/refinery. In addition, the National Reconstruction Fund Corporation (NRF) made a $200 million cornerstone investment in Arafura (Jan 2025) to help the company secure remaining finance for Nolans. Nolans is slated to supply about 4% of world NdPr demand by 2032.
• Australian Rare Earths Ltd – Awarded a A$5 million grant (Dec 2024) under the International Partnerships in Critical Minerals program to build a demonstration plant for extraction of rare earth elements (including NdPr) from its Koppamurra ionic clay project in South Australia. This grant supports feasibility work on novel rare earth sources and involves collaboration with international partners, highlighting Australia’s efforts to diversify global supply chains.

Numerous other critical minerals projects – e.g. vanadium, graphite, battery materials – have likewise received federal support in this period. In total, the government’s commitments to rare earth and critical mineral firms have expanded significantly, aimed at breaking China’s supply dominance and developing an ex-China supply chain.

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[John]

....Continue from above​

Federal Agencies, Programs and Departments Supporting Rare Earths​

Australia’s federal support for the rare earths sector is delivered through a network of government departments, specialized offices, financing agencies and funding programs. Key players and their roles include:

• Department of Industry, Science and Resources (DISR) – The lead federal department for mining and industry policy. DISR oversees critical minerals strategy and programs. The Minister for Resources (within DISR) is responsible for federal initiatives in mining, including rare earths.
• Critical Minerals Office (CMO) – A dedicated office within DISR that serves as the government’s central coordination point for critical minerals. The CMO provides policy advice and facilitates industry growth by connecting rare earth projects with investors, regulators, and government financing programs. It also promotes Australia as a secure, ethical supplier of critical minerals and works with other agencies (like Austrade and DFAT) to attract international investment. (The CMO was established in 2020 as the Critical Minerals Facilitation Office and now drives the Critical Minerals Strategy 2023–2030.)
• Export Finance Australia (EFA) – Australia’s export credit agency (under the Trade portfolio) that provides loans and guarantees to support exports and strategic projects. In 2021, the government created a A$2 billion Critical Minerals Facility administered by EFA. This facility offers debt financing for “strategically important” critical minerals projects that struggle to obtain commercial funding. Through EFA’s facility, companies like Iluka (rare earth refinery) have received massive loans to kick-start domestic processing. EFA can also leverage a Defence Export Facility for projects with defense significance. (EFA works closely with the CMO to identify priority projects and often co-funds alongside NAIF or others.)
• Northern Australia Infrastructure Facility (NAIF) – A government-backed financing agency focusing on northern Australia (under the Minister for Northern Australia). NAIF provides concessional loans for infrastructure and economic projects in the northern states/territories. It has become a major funder of rare earth ventures located in those regions. For example, NAIF approved loans for Arafura’s Nolans (NT) and Hastings’ Yangibana (WA) projects, citing their strategic importance. NAIF loans typically require approval by the Resources/Northern Australia Minister and are part of the federal push to develop regional mining projects.
• Modern Manufacturing Initiative (MMI) – A grant program (2020–2022) under the Department of Industry aimed at building manufacturing capability in key areas. One stream of the MMI targeted “Resources Technology & Critical Minerals Processing.” Through this, the previous government co-funded projects like Lynas’s Kalgoorlie rare earth processing facility. The MMI grants (usually in the $1m–$30m range) helped companies scale up value-added processing onshore. (The MMI has since been replaced by new programs, but its awarded grants are still being delivered.)
• Critical Minerals Development Program (CMDP) – A competitive grants program launched in late 2022 with $50 million to support early to mid-stage critical mineral projects. Administered by DISR (via the Business Grants Hub), it offers grants (typically a few million dollars each) to companies for feasibility studies, pilot plants, or R&D that will advance critical minerals projects toward development. The goal is to accelerate projects that can strengthen Australian supply chains (e.g. refining technology, new rare earth deposits).
• International Partnerships in Critical Minerals Program – An initiative (from 2024) that provides co-funding for Australian critical minerals projects which have alignment with allied nations’ supply chain interests. This program, managed by the Critical Minerals Office/DISR, works in coordination with international partners (USA, Japan, Korea, Canada, etc.) Several grants (totaling ~$40m by end of 2024) have been awarded for joint projects – for instance, Australian Rare Earths Ltd’s demonstration plant – to diversify global sources of rare earths.
• National Reconstruction Fund (NRF) – A federal investment fund established in 2023 to drive diversification and value-adding in Australia’s economy. The NRF has a dedicated $1 billion allocation for the “Value Add in Resources” sector, which includes critical minerals processing and refining. The NRF is operated by an independent corporation (NRF Corporation) that makes commercial investments (equity or loans) in projects. In the rare earths arena, the NRF made its largest commitment ($200m in equity) to Arafura’s NdPr project, highlighting the fund’s role in strategically investing alongside private capital. The NRF coordinates with other funding tools – for example, it might invest where grant/loan programs alone aren’t sufficient – to fill financing gaps for major projects.
• Austrade (Australian Trade and Investment Commission) – Austrade helps promote Australian critical minerals projects to overseas investors and customers. In partnership with the Critical Minerals Office and DFAT, Austrade showcases opportunities like rare earth mines to allies and coordinates government-to-government agreements. (For instance, Australia has signed critical minerals partnerships with countries such as the US, Japan, India, and EU members to facilitate offtake agreements and investment in projects.) Austrade also publishes the Australian Critical Minerals Prospectus, profiling projects (including NdPr projects like Nolans and Yangibana) to attract foreign investment.
• Geoscience Australia (GA) – The national geoscience agency which provides the scientific underpinnings for the sector. GA supports the Critical Minerals Office and Strategy by conducting geological surveys, mapping rare earth and critical mineral resources, and sharing pre-competitive data. By identifying new NdPr-rich deposits and providing technical advice, GA helps de-risk exploration and guide policy on resource development. (GA’s work, like critical minerals mapping and resource assessments, feeds into the government’s investment attraction efforts and long-term resource planning.)
• CSIRO and ANSTO – Australia’s science agencies also contribute: CSIRO hosts a Critical Minerals R&D Hub and works on processing technologies (e.g. efficient separation of rare earths), often in collaboration with industry and the Critical Minerals Office. ANSTO (the nuclear science organisation) has expertise in rare earth processing chemistry and has provided research support to companies like Lynas in developing extraction processes. These institutions ensure innovation and skills underpin the rare earth industry’s growth, complementing the financial support programs.

How These Entities Work Together​

The federal structure for supporting rare earths is highly collaborative. DISR, through the Critical Minerals Office, sets the strategic direction (e.g. publishing the Critical Minerals Strategy) and acts as a hub that coordinates across government. The CMO connects companies with funding pathways – for example, a project in Northern Australia might be steered toward NAIF for infrastructure financing and to EFA’s Critical Minerals Facility for project lending, while also being advised to apply for grant programs or NRF investment for gaps. Ministers for Resources, Industry, Trade, and Northern Australia confer to align these tools (indeed, major funding announcements often involve multiple ministers or even the Prime Minister.

Financial agencies like EFA and NAIF work in tandem: a rare earth project can dual-source funding from both, thanks to policy changes made in 2019 to allow co-lending. They also coordinate with state governments and other federal funds. The newer NRF adds another layer, investing equity into projects that have national significance but require patient capital. Grant programs (MMI, CMDP, etc.) are managed by the Industry department to support earlier-stage or enabling projects, often informed by priorities identified by the CMO or Australia’s international partners.

Overall, the system functions as an ecosystem: policy offices, funding programs, and finance agencies are linked through common objectives and often formal agreements. For instance, the Critical Minerals Office, Austrade, and DFAT ensure Australia’s rare earth initiatives are promoted globally, which in turn helps companies secure offtake agreements (critical for financing). At the same time, the office liaises with defence and science agencies to address strategic needs (e.g. ensuring NdPr supply for defense tech). Each agency retains its specific role (loans, grants, advice), but they coordinate under the national strategy. The result is a multi-faceted support structure: from exploration science, to project financing, to downstream processing and export promotion, the federal government has created interlinked mechanisms to grow a home-grown rare earth (NdPr) supply chain in Australia.

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Has anybody had any direct experience with any of these agencies?


In the future I will have a look at how the State Governments of Australia support rare earth mines.