Australia has the graphite the world needs, but it still relies on others to process the material. With more than 90 percent of the world’s battery-grade graphite refined in China, Australia is rich in critical minerals but poor in supply chain self-reliance. That must change, and northern Australia is the place to start.
Graphite is the unsung hero of the global energy transition. It forms most of a lithium-ion battery by weight, and demand is forecast to increase fivefold by 2035. But graphite’s value isn’t limited to clean energy. It’s also a foundational component in advanced defence systems, including hypersonic weapons, drones, secure communications and equipment battery storage. Despite the material’s strategic importance, Australia lacks a commercial-scale capability to refine raw graphite into spherical, purified graphite—the kind used in battery anodes. Instead, we export raw graphite and import its processed form at a significant premium. That’s a strategic liability.
China’s decision in 2023 to restrict exports of gallium and germanium in response to Western technology controls made clear that influence over critical-minerals supply is now a tool of geopolitical leverage. Graphite could be the material whose supply China next seeks to exploit. Australia cannot afford to remain dependent on a single processor nation for graphite. The answer isn’t simply a diversification of supply; it’s domestic value-adding. The Northern Territory is where we have a compelling opportunity to make that shift.
The territory contains significant graphite-bearing geological formations, particularly in the Pine Creek Orogen, the Tanami Region and the Aileron Province. Until recently, these areas had received little exploration attention. That changed in 2022 when Kingsland Minerals discovered a major graphite deposit at Leliyn, about 200 kilometres south of Darwin. When its size was confirmed in 2024, the graphite deposit became the largest known in Australia, with a maiden inferred resource of 194.6 million tonnes at 7.3 percent total graphitic carbon.
What makes this more than just another promising discovery is its location and early results. Leliyn is situated within 40 kilometres of a mining town with sealed roads, gas, rail infrastructure and access to Darwin’s port. Metallurgical testing has confirmed the deposit’s ability to produce graphite concentrate with greater than 94 percent purity, a commercial-grade product suitable for processing into battery anode material.
Importantly, only 25 percent of the known 20-kilometre graphitic rock at Leliyn has been drilled. The remaining 75 percent remains untested, offering considerable potential. But Leliyn should not be seen as an isolated commercial opportunity. It is a signal. The discovery demonstrates that the Northern Territory’s graphite potential is real, scalable and economically relevant. If Australia is to develop a domestic graphite processing capability, it should start where the geology, infrastructure and industrial policy already align.
Other states show it’s possible. Queensland fast-tracked a $1.23 billion graphite mine and processing facility last week, reinforcing Australia’s battery anode supply chain and the national shift to independent production.
Developing a graphite processing plant linked to projects such as Leliyn and near Darwin’s Middle Arm Sustainable Development Precinct would provide clear benefits. The first is domestic capability. Having the capacity to refine spherical purified graphite onshore removes a major vulnerability in defence and clean energy supply chains.
The second is economic value. Refined graphite sells for significantly more than raw material. By processing in Australia, we would retain more value, more jobs and more expertise.
The third is strategic alignment. Japan, South Korea and the United States are searching for non-Chinese sources of refined graphite. Rather than aiming to replace China, Australia should focus on diversifying through trusted partnerships. A facility in Darwin would place us squarely in that trusted partner group—particularly as cooperation through AUKUS and the Quad deepens supply chain resilience.
The ripple effects are even greater. Darwin could become a northern hub for the processing of critical minerals. The Northern Territory government is already investing heavily in enabling infrastructure at Middle Arm. Projects such as Leliyn can serve as a foundation for further exploration, industrial development and foreign investment. They can also drive regional economic diversification and Indigenous participation in mining, logistics and advanced manufacturing.
Australia has a strategy, but not yet a solution. While Australia’s 2023 Critical Minerals Strategy laid important groundwork, it’s not enough. We need targeted, coordinated action. That means establishing public-private risk-sharing models to unlock midstream processing. Streamlining regulatory approvals. Investing in infrastructure ahead of demand, not in response to it. And above all, ensuring our processing policy is integrated with national defence, energy security and trade priorities.
Australia has discussed moving up the value chain for a decade. The time for talk is over. The Leliyn discovery shows what’s possible when exploration, infrastructure and intent converge. It presents a case study of the opportunities in northern Australia. But the real question is whether Australia can move from isolated projects to an integrated graphite processing industry. If it can, we stand to gain not only economic value but genuine supply chain sovereignty.