Labor’s 2025 Election Victory Sets the Stage for Australia’s Critical Minerals Push – But Will Graphite Finally Get Its Moment?

Harry Minnis
7 May 2025

Key Highlights:

• Labor’s re-election unlocks A$1.2 billion for a strategic reserve and A$7 billion in production tax credits to support critical minerals.
• Policies aim to boost domestic graphite processing and investor confidence amid low prices.
• Australian graphite companies expected to benefit from stronger government backing.

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The Australian Labor Party’s strong re-election has cleared the runway for two big-ticket policies that could reshape the country’s critical minerals landscape: a A$7 billion production tax incentive and a A$1.2 billion strategic reserve. The response from the mining sector has been largely positive, and for good reason.

Prime Minister Anthony Albanese’s policies are aimed at turning Australia from a supplier of raw material into a strategic player in the battery and clean tech supply chain. For too long, Australia has dug up minerals and sent them offshore for processing, missing out on both value-add and jobs to other nations, a practice that, in turn, has enabled other countries to establish a monopoly over the battery supply chain.

And now, nowhere is the shift toward domestic processing and strategic control more urgent, than in graphite. Although graphite is essential for lithium-ion batteries, it rarely gets the spotlight. China currently processes more than 80% of the world’s graphite, and recent geopolitical tensions have exposed how fragile that concentration is. For mining companies, particularly those with a focus on graphite, Labor’s win could be the break they’ve been waiting for.

The proposed A$1.2 billion strategic reserve could help close a critical funding gap. Graphite developers are finding it tough to raise capital, with prices slumping despite strong long-term demand forecasts. Set to begin in mid-2026, the reserve will stockpile key minerals like graphite to stabilise supply and pricing. It’s designed to act as a buffer against market volatility and boost investor confidence in new projects. Meanwhile, the A$7 billion production tax credit, offering a 10% rebate on processing costs, is slated to kick in from July 2027.

Renascor Resources (ASX:RNU), is developing the vertically integrated Siviour graphite project in South Australia, stands to benefit directly from these policy shifts. The company is positioning itself as a low-cost supplier of purified spherical graphite (PSG) and has already secured a A$185 million loan facility from the Australian Government’s Critical Minerals Facility.

Asked what the proposed Critical Minerals Strategic Reserve could mean for Renascor, Managing Director David Christensen said “As the world builds resilient, ex-China critical mineral supply chains, it is important that Australia takes advantage of its substantial endowment of globally competitive critical mineral projects to both expand our mining base and move into higher-valued refining activities. The proposed critical minerals reserve, together with the Critical Minerals Facility and the Critical Minerals Production Tax Incentive, are important elements of ensuring that Australian projects have an equal opportunity to compete with other ex-China projects in this fast-growing sector.”

Another Australian graphite player that stands to benefit from the government’s push for in-country value-add is International Graphite (ASX: IG6). Based in Western Australia, the company is one of the few ASX-listed companies actively developing a fully integrated mine-to-market graphite supply chain, with plans for both upstream production at Springdale and downstream processing at Collie.

Commenting on the opportunity for Australia to establish a secure and competitive graphite supply chain, CEO Andrew Worland said “Australia has all the mineral endowment and the capability of developing downstream IP and expertise to dominate western global supply chains. No jurisdiction can compete with the stability and security it offers investors and consumers. The strategic reserve and production tax credit appear excellent ways to drive a level of offtake certainty and cost competitiveness that will drive in-bound investment and thoroughly differentiate ourselves from alternate jurisdictions.”

The need for policy support is becoming urgent. Without targeted incentives, more graphite companies, and even those already in production, could face serious setbacks. Canadian graphite miner Northern Graphite recently warned that it may place its Lac des Iles operation in Quebec, North America’s only producing graphite mine, under care and maintenance by the end of 2025 if it fails to secure expansion funding.

Against that backdrop, Australia’s strong government support under Labor’s re-elected administration marks a step in the right direction. Policies like the A$7 billion production tax credit and the A$1.2 billion strategic reserve could be the difference between projects stalling and being shelved or progressing. With graphite prices already severely suppressed, developers are finding it difficult to secure meaningful offtake agreements. Many suppliers are sitting on the sidelines, unwilling to lock in long-term contracts at the bottom of the market. In this environment, even high-quality Australian graphite projects face real risk of delay or failure without government intervention to reduce financing risk and build confidence in the sector.

If Australia gets this right, it won’t just be mining graphite – it will have the opportunity to shape not only the graphite supply chain, but the broader battery supply chains of the 21st century. Graphite might not have the hype of lithium or rare earths, but without it, the global energy transition comes to a halt. The question now is: will Australia lead, or keep riding shotgun in supply chains controlled by other countries?

This article is not sponsored, and none of the companies mentioned have paid for inclusion. The views expressed are for informational purposes only and do not constitute financial advice.