The Missing Link in Australia's Critical Minerals Strategy: The Case for Establishing A Sovereign Resources Fund

Russell Smyth and Joaquin Vespignani

No 2025-05, Working Papers from University of Tasmania, Tasmanian School of Business and Economics

Abstract: Australia possesses the highest per-capita endowment of critical minerals and other natural resources in the world. These minerals are essential for decarbonising the global economy. Australia stands out for having among the most sustainable and responsible mining practices globally. Paradoxically, though, while countries with comparatively limited potential for sustainable critical mineral production are investing heavily in the sector, Australia risks falling behind. This underperformance is partly due to the weak connection between resource rents and the tangible benefits experienced by the population. To address this challenge, we propose taxation reform coupled with the establishment of a sovereign resources fund that allocates a substantial share of mining sector revenues directly to individual pension accounts and future education funds. This approach would ensure that the economic gains from resource extraction are more transparently and equitably shared with all Australians, while enabling the country to expand sustainable mineral production and play a leading role in the clean energy transition.

Keywords: Critical Mineral; Resources; Sovereign Resources Fund (search for similar items in EconPapers)
JEL-codes: O13 Q32 Q48 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2025
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Published by the University of Tasmania. Discussion paper 2025-05

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Working Paper: The Missing Link in Australia's Critical Minerals Strategy: The Case for Establishing A Sovereign Resources Fund (2025)
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