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

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.