Australia is shifting from stockpiling to a production-based strategic framework for critical minerals, prioritizing rare earth production incentives and market interventions over warehoused inventories.

The initiative could be replicated for other minerals like lithium, cobalt, silicon, gallium, titanium, tungsten, copper, and silver, contingent on political will and institutional capacity.

Key success metrics include production volumes, market share, cost-effectiveness, taxpayer value, private investment leverage, and resilience improvements.

Risks involve market manipulation, price volatility, regulatory shifts, and technical/worker capacity challenges, with mitigations through competitive allocation, milestones, and international collaboration.

The core tool is a contract-for-difference with a price floor and ceiling, delivering price certainty to producers while limiting public exposure via capped losses and revenue sharing.

The plan features risk-sharing between government and investors, prioritising supply security, strategic stockpiling, and performance-based production requirements.

The plan includes a government-backed price floor for rare earths to stabilise investment and reduce exposure to volatile international markets, signaling a broader security-focused approach to critical minerals.

Milestones project initial selections in mid-2026, contract finalization by late 2026, and full-scale operations anticipated between 2027 and 2030, with ongoing performance monitoring and potential expansion.

The framework integrates joint financing, risk assessment, coordinated pricing benchmarks, and shared efforts in geological mapping, processing tech development, and quality standards.

A competitive reverse-auction process will allocate projects, prioritising technical feasibility, financial capacity, alignment with defence and clean energy, and downstream value-added potential.

Fiscal exposure for the CMSR is projected at AU$2-4 billion over a decade in modest scenarios and AU$10-15 billion under extended price suppression, reflecting capped risk.

The approach aligns with broader Western trends seen in US and EU strategies, emphasizing government-backed support to secure critical mineral supply chains.