Australia’s defence sector has taken centre stage at Avalon 2025 – touted as the largest aerospace and defence expo in the Southern Hemisphere.
Avalon 2025 is a biennial event held in Victoria from 25-30 March and it comprises three industry-only days, followed by a combined industry and public day as well as weekend public air show. A pilot involved in a crash at the airshow on Friday remains in a critical but stable condition in hospital.
Victoria’s Minister for Industry and Advanced Manufacturing Colin Brooks says the state’s defence industry generates more than $8.4 billion each year and employs 24,000 people. It includes many homegrown success stories like Cablex, Corvus Technology Solutions, Marand, Ronson Gears, and SYPAQ, which were in attendance at Avalon 2025.
Brooks says the Victorian Government is backing the defence industry through its Economic Growth Statement, it has set a strong vision for Victoria’s prosperity, opening the doors to business to encourage growth in critical sectors like advanced manufacturing and defence.
Western Australia’s Defence Industries Minister Paul Papalia adds that the Avalon 2025 expo provides the opportunity to showcase not only his state but also the country’s defence strengths on the global stage and for small-to-medium enterprises (SMEs) to meet with key international industry players.
“Our government together with industry is helping to shape the future of national security,” Papalia says.
The expo provides an opportunity for Australia’s defence businesses to make connections with global industry leaders as well as showcase the latest in technology and innovation. Wedgetail Aerospace, a defence drone service provider, and Innovaero, a company developing remote piloted aircraft systems in Western Australia, were among the local exhibitors.
All up, the Western Australian Government led a delegation of 34 local SMEs across the defence, aviation, aerospace, and space markets. Papalia adds that it’s an important event given Western Australia is enriched with a suite of minerals and metals critical to the defence industry.
The states, like the nation, are on the offensive when it comes to defence-critical raw materials.
Best defence is good offence
Australia’s list of 31 critical minerals contains minerals essential to the country’s modern technologies, economies and national security, specifically the priority technologies set out in its Critical Minerals Strategy. The list of minerals are those for which Australia has geological potential for resources, are in demand from strategic international partners, and are vulnerable to supply chain disruption.
Australia’s list includes critical minerals such as high-purity alumina, antimony, gallium, graphite, indium, lithium, manganese, nickel, REEs, tungsten, and vanadium, among others.
There’s many in the junior exploration space focused on such minerals. These include ABx (ASX:ABX), American Rare Earths (ASX:ARR), Astute Metals (ASX:ASE), Black Canyon (ASX:BCA), Burley Minerals (ASX:BUR), Cazaly Resources (ASX:CAZ), Critica (ASX:CRI), Firebird (ASX:FRB), Iltani Resources (ASX:ILT), Impact Minerals (ASX:IPT), Kingsrose (ASX:KRM), QEM (ASX:QEM), Solis Minerals (ASX:SLM), and Victory Metals (ASX:VTM), among others.
In December 2024, NATO published a list of 12 defence-critical raw materials that form the backbone of military hardware. These include aluminium, beryllium, cobalt, gallium, germanium, graphite, lithium, manganese, platinum, rare earth elements, titanium, and tungsten.
These critical minerals are indispensable for the jet engines of fighter aircrafts and the semiconductors in missile guidance systems, among other applications. Yet for many Western nations an underlying issue or concern is that China controls the lion’s share of global processing capacity for many of the aforementioned 12 raw materials.
According to a GlobalData’s strategic intelligence report, China has been securing control over the supply chains of many key materials for a number of years. Between 2019 and 2024, China invested some US$34 billion in mining-related foreign direct investment projects, focusing on securing access to everything from cobalt to graphite, to lithium, and nickel.
Homegrown manganese
China is on track to maintain its high purity manganese sulphate (HPMSM) supply dominance by the end of this decade, but reports suggest its share could decline by 2030 as more projects in other regions come online. As such, Manganese is one of NATO’s 12 defence-critical raw materials.
One ASX-listed company focused on this crucial commodity is Black Canyon, which in February 2025 completed benchtop scale beneficiation testwork on composite reverse circulation drill chip samples from the W2 prospect at the Wandanya Project. Black Canyon says there is potential to produce high-quality manganese concentrate after completing a benchtop scale beneficiation testwork program within Wandanya in Western Australia.
Firebird Metals is another junior focused on manganese. Firebird is moving closer to its goal of a stage-two, low-cost manganese-based cathode material operations, with the granting of a mining lease for its Oakover Project in Western Australia. The lease is conditional on receiving approval from the Department of Energy, Mines, Industry Regulation and Safety for a mining proposal.
Firebird’s aim is to secure a natural cost advantage in lithium-manganese-iron-phosphate (LMFP) cathode production, particularly by integrating manganese sulphate from its proposed production plant in China.
Rare earths in their element
Rare earths in particular are important to the global defence industries. Demand for REEs is soaring with the International Energy Agency’s Global Critical Minerals Outlook 2024 report showing global demand for magnet REEs nearly doubling between 2015 and 2023. It could double again by 2050, in large part driven by the growth of defence and clean energy technologies.
Rare earths are a group of 17 elements growing in importance given their strategic applications and unique catalytic, metallurgical, nuclear, electrical, magnetic, and luminescent properties. They are used in everything spanning lasers and military equipment to key components in EVs, batteries, and other electrical appliances crucial to achieving net zero emissions.
Heavy rare earth elements (HREEs) are vital to a clean energy future, with vast applications within defence technology. Elements such as dysprosium, terbium, and yttrium are used in high-performance magnets, lasers, as well as aerospace components.
At a time of aggressive protectionism and deglobalisation, they will play a foundational role in national security systems. HREEs are mined primarily in Australia, China, and Myanmar, although processing infrastructure remains heavily centralised in China. Australia has at least 4% of global REE reserves and is positioned to capitalise on this growing market, according to the CSIRO.
Critica is positioning its Jupiter Project as what it says is Australia’s “premier” clay-hosted rare earth element resource after conducting a maiden resource estimate. Jupiter has access to considerable infrastructure by being strategically located in an existing mining precinct in Yalgoo, Western Australia. Jupiter’s inferred resource totals 1.8 billion tonnes @ 1,700 parts per million total rare earth oxide (TREO), including 500 million tonnes @ 2,200ppm TREO at a 1,800ppm cut-off grade.
Having completed a Scoping Study for its North Stanmore Rare Earth Project in Western Australia, Victory Metals (ASX:VTM) is also poised to soon be a supplier of critical minerals. With a 31-year mine life and 72% of the resource being in the indicated category and 28% inferred, the project has an estimated net present value (NPV) across multiple pricing scenarios including $1.212 billion (post tax) with 52% internal rate of return (IRR) and $1.777 billion (pre-tax).
Victory will engage a corporate advisor to finalise and implement an optimal financial structure with the focus on securing government grant funding and forming a strategic partnership with offtake, joint venture or partial asset sale type arrangements.
ABx is another emerging REEs developer in the midst of assembling a series of pieces to connect the company across the rare earths supply chain. ABx’s strategy is to produce a mixed rare earth carbonate (MREC) enriched in dysprosium and terbium – the two heavy rare earths with the highest value and most acute supply risk.
American Rare Earths (ASX:ARR), like Victory Metals, is one of the more advanced junior players on the ASX in the REEs space after confirming the economics, scalability, and strategic importance of its Halleck Creek Project in the US, following a Scoping Study.
The study highlights Halleck Creek will have a 3-million-tonne-per-year base case offering a NPV using a 10% forward discount rate (NPV10) of US$558 million and an IRR of 24%. The project is expected to have a low-risk capex of US$456 million, with a 2.7-year payback period.
The Scoping Study shows the project has “billion-dollar potential” with a 6-million-tonne-per-year scenario delivering a NPV10 of US$1.171 billion and an IRR of 28.4%. The latter scenario would require a capex of US$737 million, with a 1.8-year payback period.
Meanwhile, Ragnar Metals (ASX:RAG) has committed to exploration in Sweden since the country is consistently ranked in the top 10 of the Fraser Institute’s Annual Survey of Mining Investment Attractiveness.
Consultants specialising in rare earth deposits in Scandinavia have been engaged by Ragnar to visit the company’s Melsjon prospect (now called Melson) and other REEs occurrences to advance its technical understanding of the mineralisation sites, with work starting in October 2024.
Tight supply: Tungsten and titanium
Among the critical minerals listed by NATO, tungsten is emerging as one of the most strategically significant. China controls some 85% of the global tungsten supply – leaving Western defence manufacturers exposed.
Tungsten is one of the five refractory metals – the others being niobium, molybdenum, tantalum, and rhenium – and such metals exhibit extremely high resistance to heat and wear. Tungsten is also conductive and resists corrosion.
Yet, despite its military importance, the US has almost no domestic tungsten production, and Australia only has a handful of such mines in operation. China, Bolivia, Germany, Russia, and Vietnam are primary tungsten producers.
Group 6 Metals (ASX:G6M) has been progressing the Dolphin Tungsten Mine, which was initially discovered over 120 years ago near the town of Grassy on the southeast coast of King Island, the most western large island in the Bass Strait between Victoria and Tasmania.
First operated between 1917 and 1992, Dolphin was mined intermittently until the 1990s when low tungsten prices led to mine closure. Until the 1970s, mining was open pit before operations transitioned to underground. The project is touted as the Western world’s highest grade tungsten deposit.
Meanwhile, titanium — extracted from mineral sands — has gained increasing attention due to its critical applications in aerospace, medical technology, and pigment production. With demand on the rise, McLaren Minerals (ASX:MML) is leveraging its recently acquired sulphate ilmenite project to capitalise on Western Australia’s mineral wealth.
Formerly known as Allup Silica, the company underwent a strategic transformation to align with its new focus, transitioning from silica sands to heavy mineral sands specifically targeting titanium minerals.
McLaren is conducting a drilling program at its namesake project to support mine planning, as well as confirm high-grade zones. iDrilling Australia has begun the 6,000m aircore drilling program at the McLaren Titanium Project in Western Australia, which is expected to take six weeks to complete, as reported by this news service.
Another crucial mineral in the defence sector is gallium, a component in advanced radar systems, missile guidance and electronic warfare. With China accounting for more than 98% of global gallium production, the export restrictions imposed in 2024 have left US defence manufacturers scrambling.
While alternative sources exist, Western nations are lagging years behind in building independent gallium supply chains. The consequences of this could be profound, analysts say, with potential disruptions to the production of radar systems, electronic warfare capabilities, and next-generation defence technologies.
As reported by Mining.com.au on 26 March, Victory Metals produced gallium in its final mixed rare earth carbonate product from its North Stanmore heavy rare earth and critical mineral project in Western Australia.
Victory believes the upgrade to the MRE to incorporate gallium might demonstrate to the market the scale of gallium through the North Stanmore system. The company is advancing discussions with prospective downstream partners across technology, defence, and energy sectors that recognise the importance of diversified supply.
Critical legislation
The Avalon 2025 expo comes at a critical time for Western Australia and the country. Australia has legislated change to secure supply and production of these aforementioned minerals and metals.
In November 2024, the Australian Government introduced legislation that will provide tax incentives for critical minerals production. The law will set up a tax incentive worth 10% of the relevant processing and refining costs for the nation’s list of 31 critical minerals.
The inquiry received wide industry support, with an acknowledgment that the Critical Minerals Production Tax Incentive (CMPTI) has potential to benefit and further motivate companies with current and future projects in Australia.
It is the second time a Western Australian stand had prime position at the Avalon 2025 expo floor with 16 co-exhibitors, 14 rovers, and four in the science and innovation zone.
In 2023, the expo exhibited nearly 800 companies with more than 248,000 attendees and official delegations from almost 40 nations. This included the US Ambassador to Australia and the Australian Chief of Air Force.
Write to Adam Orlando at Mining.com.au
Images: Black Canyon, Critica & Stock
