The European Union expects a wave of investment into Australia's critical minerals sector as it diversifies supply chains away from China, the bloc's ambassador to Australia said on Tuesday, with a 5.5 percent EU tariff on critical minerals set to go once a March free-trade deal is ratified.
The European Union expects a wave of investment into the Australian critical minerals sector as it pushes to diversify its supply chain away from China, the bloc's ambassador to Australia, Lawrence Meredith, said on Tuesday.
Australia and the European Union struck a free-trade agreement in March after eight years of negotiations, removing tariffs on almost all goods and easing EU 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.
Meredith called the change a game changer. Talks are also very close on a memorandum of understanding with the European Investment Bank, which would act as the bloc's funding vehicle, he said.
EU policy proposals have laid out as much as 10 billion euros ($11.2 billion) for critical raw materials within a larger 409 billion euro competitiveness fund, as the bloc debates its budget for 2028 to 2034. The bloc is looking initially at the minerals Australia will prioritise for its strategic reserve: gallium, antimony and rare earths.
Australia said on Tuesday it would refresh its critical minerals strategy to place greater emphasis on refining and processing, as competition for investment intensifies. The EU also expects to invest along the supply chain, including in processing, Meredith said.
Meredith said 2026 had been a transformational year for Australian-EU relations, pointing to the free-trade deal, a security and defence partnership, and Australia's expected entry next year into Horizon Europe, the EU's flagship research and innovation funding programme. The EU plans to mobilise 800 billion euros into defence under ReArm Europe by 2030, demand that also runs through critical minerals.
People Sentiments Public Mood: Positive
- Ambassador Lawrence Meredith called the tariff removal a game changer
- Meredith said 2026 had been a transformational year for Australian-EU relations
- Meredith said he was very confident relations would go to the next level in 2027