Aukus pact, rare earth production will keep Australia self-reliant, Albanese says

Australia will welcome investments by China in critical minerals on merit although it will seek to boost and retain manufacturing in the sector at home, Prime Minister Anthony Albanese said.

He made the comments on Tuesday at the National Press Club in Canberra, where he also declared the Aukus alliance the "single biggest leap in our defence capability in our history" during a wide-ranging speech highlighting the importance of shoring up the country's security, self-reliance and sovereignty.

Next month, the government is set to unveil the first details of the pact between Australia, Britain and the United States signed in 2021, revealing in particular the nature of the nuclear-powered submarines ordered through the deal.

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But Albanese said Australia's national security lay not only in defence but also in its international engagement in the Asia-Pacific, and reaffirmed his government's efforts towards "stabilising" the country's relationship with its largest trading partner, China.

Relations between Beijing and Canberra have been frozen since 2020 following years of tensions, but there have been signs of a thaw since Albanese came into power in May 2022.

When asked if Australia would be open to not just trade but more foreign investments from China, particularly in the critical minerals sector - ambitions expressed by Beijing's ambassador in Canberra Xiao Qian last month - Albanese said all proposals would be considered on merit.

China is the world's leading processor of many raw critical minerals including lithium and rare earths.

"Australia has very much a direct interest in making more things here and improving our sovereign capability. That's my starting point," he said.

Canberra has been reviewing its critical minerals strategy, with early discussions on the policy showing a key focus on boosting the downstream processing of these critical minerals domestically, and in doing so, creating jobs.

"Why aren't we making more batteries here? We have almost half of the world's lithium deposits. I think we should be making so many more things here in order to protect our national sovereignty," Albanese said.

"Rare earths and critical minerals are part of the National Reconstruction Fund. It is about taking those things here, providing financing for Australian-based businesses to invest and value-add here," he said.

Albanese said economic resilience was an important part of Australia's national security, as was defence.

He promised in his address that the country would have "the resources it needs to defend our nation and deter potential aggressors".

The Albanese government's first budget promised more defence spending but officials had deferred spending decisions pending a defence strategic review, which was recently completed.

While the government had not revealed details of the review, Albanese referred to a section of the document on Tuesday.

"Australia has a strong and deep alliance with the United States, a professional defence force and defence organisation, and an enviable international reputation as a capable country in military, peacekeeping and humanitarian and disaster relief," he said, reading from the review.

The right investments can help Australia maintain the strength of this capability and Aukus sits at the top of that list, Albanese said.

"Yet Aukus is about much more than nuclear submarines, or even technological interoperability," he said. "Aukus is about the future."

Albanese said Australia would maintain sovereignty over how and where the eight new submarines under Aukus would be deployed.

Responding to how he had dealt with Asean and Asia's anxiety over the Aukus pact, Albanese said he and his cabinet, in particular foreign minister Penny Wong, had pursued engagement with the region since taking office.

Countries such as Malaysia and Indonesia had previously expressed worries about the impact of Aukus on the security of the Asia-Pacific region, and during the Asia-Pacific Economic Cooperation forum last year, Philippine President Ferdinand Marcos Jnr told Albanese that the region had become outsiders.

Reeling off a list of recent diplomatic visits and meetings with the countries in the region, Albanese said his government had renewed international relations after the previous Scott Morrison government "dropped the ball".

This article originally appeared on the South China Morning Post (SCMP).

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