Financiers urge governments to stop picking critical minerals winners

what happened

Governments should not decide which critical minerals projects receive money, financiers said at the IMARC mining conference in Sydney, according to Reuters. Instead, they argued, public funds should go into shared infrastructure so that the strongest projects can advance on their own merits.

Lenders judge mines on project quality, management and the cost of developing, extracting and shipping ore both when prices are high and when they are low. Mines that fail those tests may struggle to survive when commodity cycles turn, which would add cost to the billions governments are already directing into the sector. Western countries are spending heavily to reduce their reliance on China, which dominates supply of rare earths and similar metals.

Australia has set aside at least A$13 billion ($9.2 billion) across five or more programmes, while the bloc has proposed €10 billion ($11.2 billion) for coming years, part of which may reach Australia, according to the EU's ambassador. Not all participants agreed with the approach: one European official said his government relies on industrial companies to choose projects.

why it matters

For investors, the debate suggests state support may shift from backing individual projects toward infrastructure and price-related guarantees, which could shape which miners attract capital. Financiers stressed that a project must still make economic sense across the full cycle.

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