Australia has announced the creation of a national strategic reserve for neodymium and praseodymium, critical rare earth elements essential for high-performance magnets in electric vehicles and wind turbines. The move underscores growing geopolitical and economic concerns over supply stability in the clean energy transition.
- Australia establishes a 1,200-ton initial strategic reserve for neodymium-praseodymium, expandable to 3,000 tons by 2028
- NdPr is critical for EV and wind turbine magnets; global demand projected to grow at 8.3% CAGR through 2030
- ASX:QNI and Luna Resources expected to contribute up to 40% of initial stockpile via domestic production
- NdPr spot prices rose to $135/kg, up 18% in one month following the announcement
- ASX:QNI shares jumped 7.2%, Luna Resources gained 5.8% on market reaction
- Policy shift reflects growing emphasis on critical minerals as national security resources
Australia is launching a strategic reserve to secure domestic supplies of neodymium and praseodymium (NdPr), two rare earth elements vital for permanent magnets used in electric vehicle motors and renewable energy generators. The reserve will initially hold 1,200 metric tons of NdPr metal ingots, with plans to expand capacity to 3,000 tons by 2028, as part of a broader effort to reduce reliance on foreign sources. This initiative targets supply chain vulnerabilities highlighted by recent disruptions in global rare earth markets. The move comes amid rising global demand for rare earths, projected to grow at a compound annual rate of 8.3% through 2030, driven by EV production and offshore wind deployment. Australia’s domestic output, led by companies such as QNI (ASX:QNI) and Luna Resources, is expected to supply up to 40% of the reserve’s initial stockpile, with additional volumes sourced from strategic partnerships in Southeast Asia and North America. The government aims to ensure uninterrupted availability of these materials for national defense, clean energy infrastructure, and industrial manufacturing. The announcement has triggered market reactions, with ASX:QNI shares rising 7.2% in early trading and Luna Resources seeing a 5.8% increase, reflecting investor confidence in long-term demand for rare earth processing capacity. Commodity traders are also adjusting outlooks, with NdPr spot prices climbing to $135 per kilogram—up 18% over the past month—due to anticipated tighter supply conditions and increased government demand. The strategic reserve initiative signals a broader reorientation in global resource policy, where critical minerals are being treated as national security assets. Countries including the U.S. and Japan have already adopted similar measures, but Australia’s formalized reserve system now adds a structured, state-backed mechanism to stabilize regional supply and enhance industrial resilience.