The Albanese government’s announcement of a $1.2 billion critical minerals strategic stockpile marks an important step towards securing Australia’s economic future. Yet history warns us that simply building supply is insufficient: market volatility, fragmented value chains and regulatory hurdles can still derail even the most promising ventures. If policymakers and industry leaders are serious about delivering sovereign capability, they must build durable partnerships, plan for market instability and learn from past failures, such as the Pinjarra gallium refinery.
In the late 1980s, the Pinjarra Gallium Refinery in Western Australia represented one of the boldest critical minerals initiatives outside of China. Built by French chemical giant Rhone-Poulenc, the $50 million facility was designed to produce 50 tonnes of gallium per year—more than all non-Chinese production today. It promised to place Australia at the heart of the global gallium and rare earths value chain, just as the modern world’s appetite for advanced materials was accelerating.
Yet, within just a few years, Pinjarra’s promise collapsed. Delays due to environmental permits blocked plans for an integrated rare earths processing facility. Gallium prices crashed amid global oversupply and emerging Chinese competition. Australia’s lack of midstream and downstream refining capacity added crushing costs and complexity. In short, Pinjarra had the ambition—but not the resilience—to withstand the inevitable shocks from operating in niche, high-risk commodity markets.
There are profound lessons for today’s policymakers, especially amid the optimism surrounding strategic stockpiling.
First, building resilience requires more than announcements. It demands long-term, bipartisan policy support that gives investors and operators the confidence to survive temporary market downturns. Pinjarra’s environmental permit challenges delayed expansion, ultimately crippling the site’s economic viability. Today’s policymakers must ensure regulatory certainty and support across election cycles to nurture new critical mineral capabilities to maturity.
Second, small critical mineral markets are highly volatile and supply-side initiatives alone won’t stabilise them. When Pinjarra entered production, gallium prices dropped 20–30 percent almost overnight. The refinery couldn’t offset its costs with higher volumes or diversified products.
The strategic reserve proposed by the Albanese government offers a useful starting point—but it must be tied to longer-term offtake agreements, pricing frameworks and potentially shared public-private risk management mechanisms. Without predictable demand, even world-class production facilities will fail.
Third, we must build integrated, domestic value chains. We can’t just mine and ship raw materials.
Pinjarra’s gallium was shipped halfway around the world to France for purification, then to Canada for testing and finally to customers in Japan. That six-month supply chain was costly, slow and vulnerable. China’s dominance is built on mineral extraction and control over refining, manufacturing and technology. Australia must aim for vertically integrated production clusters, enabling fast, reliable, cost-effective processing and supply at scale.
Fourth, international collaboration must be strategic, not opportunistic. In Pinjarra’s era, Australia had abundant minerals but lacked refining technology, testing labs and global market influence.
Australia must strengthen partnerships with technologically advanced allies such as Japan, South Korea, the European Union and the United States to build real sovereign capability by bringing together resources, expertise and investment.
Finally, and perhaps most importantly, demand certainty matters just as much as supply.
The Pinjarra refinery struggled because no major industrial customer—defence, energy or technology—was willing or able to underwrite long-term demand. Today’s environment is more favourable: defence industries, electric vehicle manufacturers and renewable energy companies are all hungry for secure supply chains. However, the government must play a direct role in bridging the gap between producers and consumers, ensuring that the private sector is not left alone to weather inevitable market storms.
There are parallels here to what the US is attempting with its Defense Production Act and what the EU is doing under its Critical Raw Materials Act. Australia’s proposed strategic stockpile can play an important role. But it will do so only if paired with serious policy around downstream industry, long-term offtake and international partnership.
The risks of complacency are clear. Without integrated planning, we will build strategic reserves that sit idle. Without price and demand stability, critical minerals projects will collapse under the weight of market volatility. Without collaboration across the value chain, Australia risks remaining a raw materials supplier in a world where true economic security lies in advanced manufacturing and technology sovereignty.
The Pinjarra gallium refinery should stand as both a warning and a lesson. We can’t afford to repeat its mistakes.
The critical minerals opportunity will only be realised through foresight, resilience, strategic collaboration and an unflinching commitment to long-term national interests over short-term political wins.
Australia has the resources and strategic location. It must now summon the strategic patience and coordinated leadership needed to build true critical minerals sovereignty.