The plan released by Resources Minister Madeleine King on Tuesday aims to position Australia to play a leading role in the supply chain for electric cars and renewable energy.
Looking beyond the "dig and ship" focus of the past, the strategy promises targeted support from the federal government to build new industries where value is added to raw commodities.
"The path to net-zero runs through the resources sector," Ms King said.
Strategically important projects will be "de-risked" with government support to attract private finance, and ensure domestic processing and manufacturing projects can access Australian minerals.
The government will support the mining sector across six focus areas, including with communication, co-ordination, regulation and financial support, and focus on minerals that are used in priority technologies.
The plan also calls for vigilance to protect solid sustainability credentials as a major point of difference for Australian exports in the global market.
Supply-chain due diligence and traceability of critical minerals will be increasingly important for Australian critical minerals gaining importance in global markets, the strategy said.
Australia must also balance the impacts of existing energy-intensive extraction, concentration and processing critical minerals projects, with a commitment to net zero emissions by 2050.
"We must do this in a way that supports a sustainable and competitive industry without imposing undue costs or inefficient processes," the strategy document said.
Australia is the world's biggest producer of raw battery minerals, but has a modest share of the global markets for processed minerals and high-purity battery precursors.
The strategy calls for Australia to boost downstream processing and manufacturing by attracting investment from global firms that have developed and proven their technologies.
The Australian Made Battery Plan will use the significant endowment of critical minerals to build a domestic battery manufacturing capability.
"While the potential is great, so too are the challenges," Ms King said.
"The strategy makes it clear our natural minerals endowment provides a foot in the door, but we must do more to create Australian jobs and capitalise on this unique opportunity."
Some $500 million of new investment via the Northern Australia Infrastructure Facility is the first decision taken under the strategy, Ms King announced at Geoscience Australia in Canberra.
Increasing exports of critical minerals and energy-transition minerals could create more than 115,000 new jobs and add $71.2 billion to GDP by 2040.
But she said that could swell to 262,600 jobs and the GDP boost surge to $133.5 billion by 2040 if Australia builds downstream refining and processing capability and secures a greater share of trade and investment.
Australia is the world's largest producer of lithium, the third-largest of cobalt and fourth-largest of rare earths.
Australia also produces significant amounts of metals such as aluminium, nickel and copper, crucial for electric vehicles, batteries, solar panels and wind turbines.
The strategy adds to a wider suite of policies to support the sector, including finance through the $2 billion Critical Minerals Facility and National Reconstruction Fund, and grants for early- to mid-stage projects.
But it falls short of the tax breaks and support available in the US as advanced economies race to secure a supply chain and break China's stranglehold on factory-ready minerals.
Ms King acknowledged international competition for investment in critical minerals is intense, with incentives announced by the US and European Union to decarbonise their economies.
The strategy will also establish a process to update the critical minerals list.
10°C