Government's strategic roadmap to give these ASX miners a boost

Some ASX miners are likely to benefit from the federal government's $1.3 billion plan to process more critical minerals on our shores.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

sdf

Some ASX miners are likely to benefit from the federal government's $1.3 billion plan to process more critical minerals on our shores.

These ASX shares can thank the US-China trade war and COVID-19 for this new tailwind. These events have convinced Prime Minister Scott Morrison to develop a 10-year roadmap for critical minerals, reported the Australian Financial Review.

It's become painfully apparent that Australia and the world have become too reliant on China for raw materials used in electronics and advanced manufacturing.

The Chinese government could restrict the supply of these minerals to gain the upper hand in any trade dispute. Another global pandemic could also bring key industries to their knees.

ASX mining shares that could get new government funds

The irony is that Australia has some of the world's biggest deposits of these commodities. Our miners mostly dig them up and send them overseas to be processed into higher value products used in electric vehicles, advanced weapons, telecom equipment and green tech.

The Australian government wants to capture more of the value chain and acknowledges that it will need to invest alongside industry to achieve this.

This is good news for the likes of the Lynas Rare Earths Ltd (ASX: LYC) share price and Iluka Resources Limited (ASX: ILU) share price. The former mines rare earths while the latter mineral sands.

Australia joins others in funding critical minerals

There is a global trend for governments to contribute to such projects. The US and South Korean governments are only a few examples.

But rare earths and mineral sands are unlikely to be the only commodities that our government would like to support.

ASX lithium and nickel miners may also be able to tap into federal government grants as these are used extensively in batteries.

Such a move could support the IGO Ltd (ASX: IGO) share price, Galaxy Resources Limited (ASX: GXY) share price and Pilbara Minerals Ltd (ASX: PLS) share price.

10-year roadmap details

The AFR reports that our prime minister will reveal details of the 10-year roadmap tomorrow. The plan will help position Australia as not just a global resources powerhouse, but also a leader in manufacturing and value-added processing.

The initiative is seen as a way for the Morrison government to win over voters in coal mining regions of Australia, while pacifying city voters concerned about climate change.

Much of the $1.3 billion in funds could be used to develop processing facilities in the Hunter and Central Queensland.

Motley Fool contributor Brendon Lau owns shares of Lynas Rare Earths Ltd and Iluka Resources Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

A young man wearing glasses writes down his stock picks in his living room.
Opinions

2 amazing ASX shares I wish I'd bought earlier

I think these stocks are performing incredibly well.

Read more »

Person handing out $100 notes, symbolising ex-dividend date.
Share Market News

$20,000 invested in CBA and these ASX 200 shares 5 years ago is worth

Did these shares deliver the goods for investors? Let's find out.

Read more »

a business person checks his mobile phone outside a Wall Street office with an American flag and other business people in the background.
Share Market News

Is the 'sell America' trade back?

Institutional investors appear to be at odds with retail investors.

Read more »

Unsure man analysing data on laptop.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a disappointing end to a disappointing week for investors this Friday.

Read more »

Six smiling office colleagues stand in a row and look at the camera.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why ANZ, Clarity, IGO, and Pilbara Minerals shares are dropping today

These shares are ending the week in the red. But why?

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Share Gainers

Why Betr, Centuria Capital, GR Engineering, and Mach7 shares are pushing higher

These shares are having a good finish to the week. But why?

Read more »

woman holding 'hiring' sign in shop
Broker Notes

How much upside does Macquarie tip for Seek shares?

The broker recently reviewed Australian job ad volumes for May.

Read more »