Slow progress in creating financing mechanisms and achieving binding business commitments is holding back India-Australia critical minerals cooperation.
According to industry stakeholders, discussions between Australian miners and Indian conglomerates have stalled over offtake commitments, junior miners can’t get capital without firm purchase agreements, and investors are further deterred by China’s persistent suppression of lithium and cobalt prices.
Japan’s success with government-directed investing in rare-earths producer Lynas Corporation suggests a way forward.
India and Australia have built an impressive architecture of cooperation, but five years after their 2020 comprehensive strategic partnership they must move beyond diplomacy into supply chain outcomes. Multiple memorandums anchor critical-minerals cooperation, and a joint working group links ministries. Australia’s Critical Minerals Office partners with India’s KABIL on project investment; research hubs at IIT-Hyderabad and Monash University foster academic collaboration. The foundations appear solid on paper.
The challenge lies in connecting government-to-government frameworks to business-to-business activity. Mining companies are private entities making commercial decisions. As memorandums of understanding don’t create binding obligations or guarantee offtake agreements, they cannot meaningfully influence commercial decision-making processes.
Financing remains a persistent bottleneck. Junior Australian miners have expressed interest in Indian partnerships, but many discussions have stalled. According to industry stakeholders, previously reported talks between Australian companies and Indian conglomerates have also faced difficulties around offtake commitments.
Mining projects demand substantial long-term capital, and investors view them as prohibitively risky without firm purchase agreements. China’s pricing strategies for cobalt and lithium have depressed global markets, further eroding investment incentives.
Junior miners take significant risks in exploration and development, often getting acquired once they establish market presence. These early-stage projects need financial support. Current cooperative efforts lack a dedicated joint fund for this purpose, despite frameworks stemming from Australia’s India Economic Strategy.
The partnership also faces competing priorities: India is prioritising securing raw material supply for its industrial base; Australia is emphasising processing and value addition, moving beyond raw material exports. For example, the Future Made in Australia Act committed approximately $7 billion in production incentives and Australia’s Critical Minerals Strategic Reserve, announced in 2025, gives the government direct stakes in resources.
Both priorities are legitimate, but they don’t automatically align. Without explicit conversation about reconciling these emphases, the partnership risks working at cross-purposes.
Japan’s experience offers useful lessons. Following its 2010 rare earths crisis, Japan made direct equity investments in Australia’s Lynas Corporation. An agreement between Lynas and Japan’s Sojitz Corporation guaranteed rare earths for the Japanese market for a decade in return for direct financing to Lynas through the state-owned Japan Oil, Gas and Metals National Corporation, securing minerals supply to Japan while supporting project development. This approach demonstrates how partnerships can transcend symbolism and deliver concrete outcomes.
The India-Australia partnership could benefit from similar thinking. Rather than proliferating broad agreements, both countries might identify three to five priority minerals for concentrated support. Such targeted support could include government-backed financial instruments such as guarantees, first-loss capital, or co-investment vehicles to make projects bankable for commercial entities.
An effective partnership would also benefit from clearer accountability. Current memorandums lack robust monitoring mechanisms to track progress against specific milestones. Without such oversight, it becomes difficult to assess whether the partnership is achieving its objectives.
Strong government-to-government relationships create enabling environments for commercial activity. Academic collaborations build knowledge and ties. These efforts matter. But they need mechanisms that bridge the gap to commercial outcomes.
Geopolitical fractures and supply chain vulnerabilities provide a strategic imperative to cooperate on critical minerals. During her recent visit to India, Australian Foreign Minister Penny Wong reaffirmed the political will was there. What is needed now is focus on implementation: governments creating financial and institutional conditions for actual projects, not just servicing agreements with meetings.
Both countries bring complementary strengths. Australia has resources and technical expertise. India has market demand and growing manufacturing capabilities. With the right mechanisms and commitment to moving from memorandums to markets, this partnership can deliver meaningful outcomes.
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