The nation's first high-purity alumina processing facility will be established in Queensland after Labor earmarked $400 million in loans to Australian company Alpha HPA.
The project, which is expected to create 490 jobs during construction and a further 200 upon completion, will allow Australia to process alumina, commonly used in electric car batteries and superconductors.
Prime Minister Anthony Albanese said the scheme would allow the industry to expand.
"The better way is for us to value add right here to create jobs here, and you create value here," he told reporters in Gladstone on Wednesday.
"These projects will help secure good and secure jobs in manufacturing and clean, reliable energy."
Regional Australia is powering jobs and our economy with the resources and skills in demand as the global economy transitions.— Anthony Albanese (@AlboMP) And it's the people who live here who make it happen, like the workers at APLNG. Their work is crucial to the Gladstone economy and our national wealth. pic.twitter.com/gxlvhXM0V7April 17, 2024
The announcement comes after the prime minister detailed his Future Made in Australia plan to promote local manufacturing and safeguard the nation's control over resources and critical minerals.
He said the loan would also help to increase the amount of exports of critical minerals, particularly to southeast Asia.
"If we get this right, we can position ourselves so that our economy not only is able to supply domestically, but we are able to export, particularly in the growing economies to our north," he said.
"We speak about the proximity of opportunity, because we are so close to the fastest growing region of the world."
The prime minister also downplayed concerns the loans would lead to jobs in the industry being reliant on government funds.
"This is an investment by government in the confidence that we have about Australia to grow," he earlier told ABC Radio.
"It will place Australia as one of the main non-HPA suppliers, that have been overwhelmingly (coming) from China. It will be a really exciting process."
The government has also conditionally approved $185 million for Renascor Resources to help fast-track stage one of its Siviour Graphite Project in South Australia to deliver purified graphite - also used in lithium-ion batteries required for renewable technologies.
Anthony Albanese says the investment in the critical minerals sector will boost jobs and the economy (Lukas Coch/AAP PHOTOS)
Stage one of the project will create 150 construction jobs and 125 jobs once operational in Arno Bay on the Eyre Peninsula, while the second stage is expected to create a further 225 construction jobs and more than 120 positions once it's operational in Bolivar, near Port Adelaide.
Resources Minister Madeleine King says the projects will help diversify global supply chains and lower emissions around the world.
"The road to net zero runs through Australia's resources sector," she said.
"Australia's critical minerals and rare earths are key to building renewable technologies such solar panels, batteries and wind farms, as well as defence and medical technologies."
The federal government's manufacturing push has been likened to the Inflation Reduction Act in the US, which provides US$624 billion worth of funding to accelerate America's transition to net-zero emissions.
The Association of Mining and Exploration Companies chief executive Warren Pearce welcomed the government's announcement of the loan.
"The government is taking a more forceful and active role to make sure Australia can compete in an international market. It's game on," he said.
"Backing in Australian companies not only supports the here and now, but gives confidence to others looking to innovate and make further investments in our critical minerals industry."
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