Australia needs to "step up" and take a leadership role in supplying and refining the critical minerals needed to fuel the world's transition to green energy.
Local mining firms would face fierce competition from rival countries however, the Raisina Down Under event heard on Wednesday, and would need financial assistance and to focus on environmental and worker safety standards to be competitive.
Federal Natural Resources Minister Madeleine King issued the challenge at the gathering, held by the Australian Strategic Policy Institute in Canberra, underlining Australia's need to work with countries in the Indo-Pacific region.
Australia had a long history of mining traditional resources such as iron ore, coal, gas and gold, Ms King said, but must expand its remit to lead the emerging green exports economy.
"An important part of that is Australia stepping up, stepping up to take a leadership role in the development of critical minerals and rare earths industries globally," she said.
"Given the geological gift we have in Australia of a very old continent, making use of those minerals for the benefit of our partners, our friends, industries right around the world, in that transition is vitally important but we do have to step up."
Local mining and mineral processing firms would need financial support such as tax credits to compete with "the dominance of particular players" in the global market, Ms King said, despite the country's raw potential and high global demand.
Critical minerals such as lithium, nickel and cobalt are used to produce batteries needed for energy storage and electric vehicles, while rare earth elements such as neodymium are used in wind turbines.
Australia supplies more than half the world's supply of lithium, but most of the metal is processed and refined in other countries such as China.
An additional challenge for Australia would be maintaining high levels of environmental and safety standards around critical mineral mining, Ms King said, as the cost of these practices was not reflected in mineral prices from all countries.
"That means our products cost more, as mining companies will be really pleased to tell you," she said.
"We should all aspire to have really good environmental practices, worker safety practices."
But Australia would face significant international competition in the critical minerals market, Observer Research Foundation climate and energy director Mannat Jaspal said.
Supplies were currently dominated by a handful of countries, she said, with half of the world's nickel coming from Indonesia, half of the world's cobalt from Congo, and 70 per cent of rare earth materials from China.
"(The) concentration of critical minerals is way more massive and way more extreme that it ever was in the oil and gas period," she said.
"Australia is very rich in many critical minerals like lithium and because of its massive land availability (and) is most possibly a low cost option for a net-zero future."
In addition to critical minerals partnerships, emerging technology should also be a focus for future Australian alliances, Office of National Intelligence director-general Andrew Shearer told the conference.
Managing the risks of artificial intelligence, as well as developing quantum computing and biotechnology solutions, would be vital to ensure the region kept up with other countries and corporations did not overstep.
"Partnerships and coalitions between groups of like-minded countries ... are going to become more central, whether it's around critical minerals... around all sorts of other areas of advanced technology," he said.
