Australia wants to compete with China in producing and refining resources vital to the next phase of high-tech manufacturing around the world, according to Minister Madeleine King, backing the country’s bid to build its critical minerals capability.

When asked about the possibility of greater Chinese investment in the sector, Resources Minister King said while Australia was receptive to proposals, the government sought to build up the domestic industry. 

“The reason we want to make sure that we hold more critical minerals capabilities here, in refining, in processing, and further down the line, is to compete with China,” King said in a phone interview on Tuesday. “That’s not a bad thing.”

Since coming to power in May 2022, Australia’s center-left Labor government has ramped up investment in minerals including lithium, cobalt and titanium, which are vital for global green energy infrastructure and the defense manufacturing. 

King’s remarks come days after Australia expanded its list of resources deemed crucial to its energy transition and national security needs. Australia has some of the world’s largest reserves of the critical resources, sparking interest from nations keen to diversify their supply chains given China’s substantial head start in processing.

In recent months, Australia has boosted cooperation with countries including the US on critical minerals. However as relations between Beijing and Canberra warmed, China has pushed for greater access for its investors, including in the mining sector.

Ambassador Xiao Qian said in October he wanted to see a more hospitable environment for Chinese investors while top diplomat Liu Jianchao warned during a November visit that his country’s firms didn’t see “a clear future” for investment.

About half of the government’s A$4 billion ($2.6 billion) financing facility to build up the critical minerals capacity has already been spent, and there may be a need for further state funding, King said.

The department was looking into strategic critical minerals hubs across Australia to concentrate mining and refining in specific areas, where they could share infrastructure assets, she said.

The minister said the expense of individual companies constructing roads and rail infrastructure to service their operations could dramatically push up the cost of projects.