How IP is Powering the Critical Minerals Boom
Introduction: The IP Edge in Critical Minerals
As Australian patent attorney’s working closely with innovators in the critical minerals sector, we see firsthand how intellectual property (IP) is becoming the cornerstone of competitive advantage in this rapidly evolving field.
Australia is uniquely positioned to lead in the global critical minerals landscape. But this leadership won’t be secured by geology alone, it requires strategic innovation, well-protected IP, and a clear understanding of the challenges and opportunities ahead.
Australia’s Role in the Critical Minerals Sector
Critical minerals are essential to the energy transition and to modern technologies. With significant deposits of lithium, nickel, rare earth elements, and copper, along with established mining expertise, Australia already plays an important role in global supply chains. Under the Net Zero scenario, this role is expected to grow.
Refining Bottlenecks: A Technical and Strategic IP Challenge
A significant technical bottleneck in the critical minerals sector lies in refining and processing capacity, which is heavily concentrated in a few countries – particularly China.
China processes around 70% of global graphite and 90% of rare earth elements. These processing bottlenecks remain even with diversified raw material sources. For example, while Australia mines 55% of lithium globally, China refines 65% into battery-grade material. This creates serious supply chain vulnerabilities, as shown in 2023 when China banned antimony exports to the U.S.
The Australian Government’s Critical Minerals Strategy 2023–2030 outlines a plan to expand downstream processing and strengthen supply chain resilience. But doing so means solving complex technical challenges, from advanced separation techniques to sustainable refining processes.
Here’s where IP becomes indispensable. Patents and trade secrets can be used to protect the technologies that underpin new refining processes, separation techniques, and recycling methods. For companies, a well-structured IP strategy can protect proprietary processing technologies, create licensing opportunities, increase valuation, block competitors, and reduce infringement risks. At the national level, stronger IP control will support domestic ownership of critical technologies, reduce reliance on foreign technologies, and strengthen Australia’s position in global supply chains.
Tracking Innovation: Patent Trends in Critical Minerals
Since 2010, there has been a steady increase in international patent filings relating to critical minerals technologies. The innovation hotspots include:
- lithium recovery and processing
- battery materials
- extraction and refining of metals such as nickel, aluminium, and rare earth oxides
Recent trends also show growing activity in advanced processing systems, novel extraction techniques, and AI-driven exploration tools.
Chart: Insights to the relative priority countries of origin.
Map: Geographic distribution of patent filings in critical minerals technologies.
Despite increased investment in critical minerals, Australia’s global share of related IP has not grown in recent years. In contrast, Chinese entities continue to lead in securing IP rights in this area, as in other strategically sensitive technologies.
Sustainability as a Competitive Driver
Critical minerals extraction and processing can cause significant environmental impacts, including land degradation, water stress, and hazardous waste generation. Recycling rates for key minerals remain below 1% because they are embedded in complex products and current recovery methods are expensive and inefficient. The lack of effective recycling and reuse systems means supply depends almost entirely on new extraction, increasing pressure on ecosystems and raising long-term sustainability concerns.
Encouragingly, more innovators are now patenting technologies that reduce environmental impact, including:
- innovative extraction methods
- energy-efficient recycling processes
- cleaner mineral processing systems
The Rise of Licensing and Strategic IP Deployment
Licensing has become a major driver in bringing critical minerals innovations to market. Instead of going it alone, companies are licensing their extraction or processing technologies or entering joint development deals. This approach can accelerate scale-up, save capital, and provide access to wider distribution channels or manufacturing capacity.
Companies are using patents strategically to protect technologies in high-demand areas, like electrochemical lithium extraction or rare earth separation. Licensing these IP portfolios can become a key revenue stream and competitive differentiator, especially for startups or research spin-offs. Smaller or mid-tier miners can also reduce capital risk by opting to license proven IP instead of developing expensive processes in-house.
IP as a Magnet for Investment and Partnership
In today’s innovation economy, IP is not just protection – it is also a currency. A robust patent portfolio or defined trade-secret strategies can:
- signal to investors that a company has something unique and defensible
- strengthen negotiating positions, allowing companies to secure better terms in supply agreements, joint ventures, or technology-sharing arrangements
- provide a barrier to entry, making it harder for competitors to replicate critical methods.
Common IP Pitfalls in Critical Minerals Innovation
There are a number of common IP pitfalls can substantially undermine both the commercial and strategic value of a business.
These include:
1. Unclear Ownership
R&D often occurs in collaborative settings, which may lead to ambiguity surrounding IP ownership, joint ownership (which may restrict commercialisation), or even difficulty in managing confidential information or trade secrets.
To mitigate these risks, businesses need to implement clear contractual frameworks that define background IP, assign project IP explicitly, and incorporate strong IP governance practices such as innovation capture systems and confidentiality training.
2. Premature Disclosure
Early disclosure can destroy novelty, making it impossible to secure patents later. Premature disclosure can also alert competitors to emerging technologies, giving them a head start in developing alternative solutions or filing competing patents.
Essential safeguards include strict internal disclosure protocols, robust non-disclosure agreements (NDAs), and mandatory internal IP reviews before any external communication.
3. Freedom to Operate Risks
The critical minerals sector relies heavily on patented technologies. Without a proper freedom-to-operate (FTO) analysis, a company may invest heavily in technology only to face patent infringement claims, costly redesigns, or litigation.
Comprehensive FTO searches, conducted early and supported by technical IP expertise, help mitigate this risk.
4. Inadequate IP Due Diligence in M&A Transactions
In acquisitions and strategic investments, weak IP due diligence can strip value from otherwise groundbreaking technologies. Unclear ownership, unenforceable patents, or restrictive licence terms can limit the use of critical processes or block commercialisation altogether.
In the critical minerals sector, where IP may be tied up in joint ventures or subject to government funding conditions, thorough IP audits are essential before closing a deal.
Strategic Opportunities for IP in Critical Minerals
Stakeholders in the critical minerals sector have opportunities to align their IP strategies more closely with business goals by:
- Integrating IP Planning into Early-Stage R&D
Ensure patents and trade secrets are considered during project design, not as an afterthought. Align R&D priorities with technologies that have the highest commercial or strategic potential.
- Linking IP to Investment and Funding Strategies
Use IP portfolios to attract venture capital, private equity, or government funding. Highlight patented or protected technologies as key assets in investment pitches.
- Aligning IP with Partnerships and Joint Ventures
Clearly define ownership, licensing, and usage rights when entering collaborations. Structure agreements to maximise commercial leverage while protecting core technologies.
- Incorporating IP in Risk Management
Conduct freedom-to-operate analyses to avoid infringement and potential litigation. Use IP to block competitors and protect supply chain advantages.
- Developing a Long-Term IP Roadmap
Plan IP filings and strategy over the lifecycle of the business, from exploration to downstream processing and recycling. Coordinate IP activities with product development, commercialisation, and international expansion.
Conclusion: Innovation Alone Isn’t Enough
Rapid growth in the critical minerals sector brings a distinct set of legal and strategic challenges. Protecting IP is more than filing patents; it’s about maintaining a competitive edge, facilitating cross-border collaboration, and navigating a complex global IP landscape. This is especially important in an industry where technological advantage and proprietary know-how can determine long-term success.
By developing a strong IP strategy, companies can continue advancing new technologies while doing so with clear strategic direction.
For More Information
Each of our critical minerals specialists have a background in Chemistry or Engineering. You can be assured that when you are talking to us, we understand your technology and will combine this knowledge with a flexible, forward-thinking approach to providing IP advice that is aligned with and supports your commercial strategy.
Should you require assistance protecting your own critical minerals innovation, please contact:
Brendan Peachey, Principal, Wrays – brendan.peachey@wrays.com.au