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The Albanese government is advancing a strategic reserve for rare earths, aimed at safeguarding taxpayers from potential losses in the billions, following a model proposed by ten Australian producers and the mining lobby. The reserve focuses on rare earths vital for defense, excluding ores like lithium.

Supported by prominent mining figures, the initiative seeks bipartisan backing and aims to supply the US and other Western nations with essential materials. The government has committed $1.3 billion to this reserve, which may expand if aligned with US pricing strategies for rare earths.

Producers will compete for supply contracts with agreed floor and ceiling prices, with government support for price dips and revenue from price surges. The strategic reserve's framework is anticipated soon, potentially applicable to other minerals, with a focus on enhancing national security through critical mineral stockpiling.