Australia Faces Tough Choices in Lithium Sector Shift

Foreign money flows into Australia’s lithium sector as local players fight to retain control of the energy transition.

2 Apr 2025

A wave of international investment is reshaping Australia’s lithium industry, underscoring its strategic role in the global transition to electric vehicles and clean energy. Foreign bids for local assets have intensified, prompting fresh debate over how much control the country should retain over its critical minerals.

Four Indian state-owned entities, Khanij Bidesh India Ltd., Coal India, Oil India, and ONGC Videsh, are seeking a combined 20 per cent stake in the Mount Holland and Andover lithium projects in Western Australia. The proposed deal, estimated at $600mn, highlights a growing trend among import-reliant nations to secure upstream supply rather than rely solely on market purchases.

The timing is critical. A recent fall in lithium prices has slowed development of new mines, creating an environment where foreign capital is welcome but not without scrutiny. Policymakers in Canberra are now reviewing investment rules to balance economic openness with national security.

Local producers, including Pilbara Minerals and Arcadium Lithium, are responding with more cautious strategies. Rather than relinquishing ownership, companies are forming joint ventures that allow them to retain influence while attracting external funding. These groups are also increasing investment in domestic processing, seeking to add value locally and reduce reliance on raw exports.

“The dynamics are shifting. This isn’t just about mining lithium. It’s about who builds the value chain and owns the future of energy,” said a Perth-based mining consultant.

Officials have stressed that foreign partnerships remain welcome, but must not compromise Australia’s longer-term industrial and strategic goals. Investment decisions in the lithium sector are now seen as having wide-reaching consequences, potentially shaping the direction of global energy supply chains.

With demand for battery minerals expected to remain strong, Australia’s role as a supplier of lithium is evolving into that of a gatekeeper. As international interest deepens, the choices made now are likely to determine the country's position in the clean energy economy for decades to come.