A trade deal between Australia and the United Arab Emirates (UAE) is on the horizon, resulting in billions of dollars of investment into Australian critical minerals industries.
Australian trade minister, Don Farrell, believes quick negotiations are the key to seeing capital flow to the country as soon as 2025. Farrell will arrive in Abu Dhabi at the start of March for a second round of discussions.
At COP28, the UAE announced it will establish a US$30B climate-focused investment fund.
Beyond Australia, other state-owned companies and funds from the capital have been linked to green energy investments worth A$200B globally.
Farrell didn’t specify the capital that would be allocated to Australian projects, but confirmed the UAE made it very clear it was keen to invest in Australian critical minerals and processing.
“Firstly, it’s a sign of goodwill between the two countries that we have signed an agreement. But secondly, it smooths the way for that investment.” Farrell told the West Australian in an interview. “I’m confident that with some goodwill we can make progress, and either by the end of the year, have an agreement or have a pathway to an agreement.”
Australia’s critical minerals reserves have been a focus for many countries as they aim to diversify supply chains in the current green energy transition, “I think you’ll find that there will be lots of countries around the world who won’t want all their eggs in the one basket and that will look to diversify the relationship.” the Senator said.
Farrell further noted that the UAE appreciates the need for more than one country to supply green products, evident by comments made referring to Australia as ranking second to China for critical minerals supply chains.
US Secretary of Commerce Gina Raimondo last year told Australian Prime Minister Anthony Albanese that countries like Australia and America should work faster to develop their critical minerals industries, given China’s jump start.
The European Union also wanted in on Australia’s critical minerals reserves, but that collapsed in October with Canberra saying the EU did not offer enough market access for its agricultural products.
However, Farrell anticipates trade negotiations with the UAE will be simpler, saying some of the barriers, particularly in agricultural areas that hampered the EU deal, were not an issue in the latest discussions.
During his week-long visit to Abu Dhabi, Senator Farrell will also meet his Chinese counterpart, Wang Wentao, and attend the World Trade Organization conference to push for changes, including fixing the dispute settlement system and creating new mechanisms for appeal.
