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Australia’s growing critical minerals partnership with Japan could open new opportunities for junior miners, but GHD national critical minerals lead Sam Taylor believes the key to unlocking investment lies in understanding what Japanese customers need.
Speaking to Australian Resources and Investment following the Australia–Japan Critical Minerals Dialogue in Tokyo in early October, Taylor said the relationship was increasingly focused on developing Australia’s midstream processing capabilities rather than simply securing supplies of raw materials.
The opportunity, he argued, is for Australian companies to undertake additional processing before supplying Japanese manufacturers, capturing more value domestically without necessarily developing complete downstream industries.
“Japan doesn’t want the concentrate for a lot of the critical minerals like tungsten, antimony, etc. They want one extra step of refinement,” Taylor said.
He said finding a middle ground between the supply capabilities of Australian producers and the demand requirements of Japanese end-users underpinned the dialogue talks.
“Japan doesn’t have that diversified early midstream capability. They’re far more focused on the end of that midstream and the downstream. I think really pinpointing that point of what I’d call handoff or value integration was really coming through in the discussions.”
The dialogue followed the Australian and Japanese governments’ decision in May to elevate critical minerals cooperation as a core pillar of their economic security relationship.
Under their joint statement, the governments committed to strengthening investment, diversifying supply chains and identifying strategically important mining, refining and manufacturing projects.
Australia has outlined up to $1.3 billion in government support, including non-binding letters of support, for critical minerals projects involving Japan. Japan has provided approximately $370 million through the Japan Organization for Metals and Energy Security (JOGMEC), with further support planned as projects progress.
Finding the right processing opportunity
Taylor identified antimony and tungsten as particularly promising examples of how Australia and Japan could develop complementary supply chains.
Australia is developing domestic antimony metal production capabilities through upgrades to existing smelting infrastructure, while Japan has established expertise in converting the metal into higher-value industrial products.
“Japan needs it in that next form, which is antimony metal. They don’t need the concentrate,” Taylor said.
Tungsten presents a similar opportunity, with Japanese customers requiring additional processing into ammonium paratungstate (APT) rather than raw concentrate.
“Tungsten’s another one; they can’t really take the raw concentrate either. They need to get it into a product called APT.”
For Australian miners, these additional processing steps could increase the value of their products while establishing stronger relationships with Japanese customers.
However, Taylor cautioned against assuming that greater processing always produces better commercial outcomes.
“Getting into high purity might be a surplus requirement; it might be what the Japanese refiners can already do anyway.”
Developing unnecessary downstream capacity could expose junior miners to higher capital requirements, technical risks and narrower markets.
Instead, Taylor believes companies should identify the processing stages where Australia can add value most efficiently while taking advantage of Japan’s established industrial capabilities.
Junior miners need earlier engagement
The changing relationship could also create opportunities for junior explorers seeking strategic partners.
Taylor said Japanese companies were increasingly interested in engaging with miners earlier in project development, helping establish product specifications and commercial requirements before production begins.
“There is appetite from the Japanese to work with junior miners more from the outset … to really help shape that sort of market expectation and that outlook.”
Such engagement could prove particularly valuable for smaller companies with limited resources to undertake technical marketing and establish relationships with potential customers.
Taylor pointed to Lynas Rare Earths as an example of how Australian mining companies can develop greater processing expertise.
“They think of themselves more as a chemical company now than a mining company,” he said.
“I think that’s the sort of mindset that probably needs to flow through a bit more, particularly if a junior is exploring a mineral with use cases that are predominantly chemical inputs at that midstream.”
Lynas is among six strategic projects identified in the governments’ May joint statement, alongside Alcoa’s gallium recovery initiative, Magnium’s magnesium project, Tivan’s Speewah fluorite project, RZ Resources’ Copi project and Ardea Resources’ Kalgoorlie nickel project.
These initiatives demonstrate the breadth of opportunities emerging across Australian critical minerals, although several remain subject to financing, development and regulatory requirements.
Infrastructure could unlock investment
For junior miners, one of the biggest obstacles remains demonstrating that processing technologies can produce commercially acceptable materials.
Taylor identified a shortage of shared pilot and demonstration facilities as a significant constraint.
“The real gap is providing a facility that can do that sort of advanced pilot demonstration scale,” he said.
Investors, he explained, want to see production results meeting their specifications before committing capital.
Yet constructing demonstration facilities can require substantial investment, creating a financing challenge for smaller companies.
Government-supported common-user infrastructure could help bridge that gap.
Taylor also highlighted the importance of reliable power, water, waste management, chemical and reagent supplies, alongside testing and certification capabilities.
Such facilities could enable multiple projects to demonstrate commercial viability without each company bearing the full cost of developing specialised infrastructure.
Investors have a bigger role
Taylor believes the responsibility for developing new supply chains should not rest solely with mining companies and governments.
Japanese customers and investors could play a greater role by providing technical expertise, market intelligence and support for enabling infrastructure.
“Investors need to be more willing to come in,” he said. “They need to provide some of that value uplift or capability uplift.”
He also argued that investors should provide “a line of sight into what their market is”, allowing miners to develop products that meet genuine industrial demand.
For Australian investors, the implications extend beyond identifying companies with promising mineral deposits.
Projects capable of establishing customer relationships, demonstrating processing technology and securing access to shared infrastructure may be better positioned to attract development capital.
Taylor believes Australia’s early midstream processing ambitions are achievable, provided the industry develops a clearer understanding of where mining ends and downstream manufacturing begins.
“That early midstream, I definitely think is attainable and desirable,” he said.
As Australia and Japan deepen their critical minerals relationship, the investment opportunity may increasingly depend on connecting Australian resources with Japanese manufacturing requirements, rather than attempting to replicate every stage of the supply chain domestically.
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