The promise of a new resources boom is captivating Canberra, the markets, and mining communities from Perth to Townsville. But the RBA has warned that we shouldn't expect a boom to follow recent focus on the rare earth minerals.

Rare earths and other critical minerals—essential to the world’s electric vehicles, wind turbines, and high-tech devices—are being talked up as the next big thing for Australia’s export economy. Politicians are touting the nation’s “once-in-a-generation opportunity” to ride the global green energy wave. New strategies and funding commitments, from the Critical Minerals Strategy to the Future Made in Australia plan, have set the stage for what some hope will be a decades-long windfall. But beneath the headlines and optimism, a more cautious message is coming from the Reserve Bank of Australia: the so-called rare earths boom is far from guaranteed—and if it does materialise, it could be a long wait.

The RBA's assessment: pack your patience

The Reserve Bank’s latest Bulletin, published in October 2025, takes a clear-eyed view of Australia’s position in the critical minerals race. The RBA acknowledges that Australia is already a world leader in producing some of the key minerals set to underpin the global energy transition. Namely lithium, rare earths, and cobalt. These resources are vital for manufacturing batteries, electric vehicles, and renewable energy infrastructure, placing Australia in a potentially lucrative position if global decarbonisation accelerates .

But the RBA is explicit about the long odds and slow timelines. Most new projects in the pipeline are years away from delivering meaningful output.

Developing a new mine, especially for rare earths, is not a quick process: exploration, approvals, construction, and ramping up to commercial production often takes a decade or more. Even as government policies and private capital are lining up, the RBA points out that the real economic impact of these investments will only materialise if global demand stays strong and if Australia remains globally competitive.

In the near term, growth is likely to remain subdued as the sector contends with market volatility and project delays. For all the talk of an imminent boom, the central bank’s verdict is that the critical minerals opportunity is real—but patience and realism are needed .

Boom or trickle?

There’s no shortage of obstacles standing between Australia and a genuine rare earths boom. As the RBA emphasises, the path from mineral discovery to large-scale production is long and complex, often taking a decade or more. Major rare earths and critical mineral deposits tend to be geologically concentrated, meaning only a handful of viable projects can realistically make it to production.

Even then, Australia faces stiff competition from other resource-rich nations and, crucially, from China, which dominates global processing and refining capacity.

Adding to the challenge, many Australian projects have been stalled or scrapped in the past year as prices for lithium and nickel tumbled from their 2022-highs.

Lower market prices have forced several companies to delay investment decisions or temporarily shut mines, illustrating how sensitive the sector is to global demand and investor sentiment. This volatility isn’t going away: as the RBA notes, the future for rare earths and other critical minerals will hinge on the pace of the global energy transition, the roll-out of electric vehicles, and the willingness of governments (especially the US and EU) to back green technology with real dollars.

Geopolitics and policy instability only add more layers of uncertainty. The RBA points out that recent moves (like US tax credit rollbacks, Chinese export controls, and new tariffs) could easily shift the demand curve or disrupt supply chains.

Meanwhile, advances in battery and clean tech could rapidly change which minerals are most valuable, or how much is needed. In short, while Australia is well placed to benefit if the stars align, the central bank’s warning is clear: expecting a rare earths jackpot anytime soon is risky.

This is a sector that could take years—if not a full decade—to deliver on its promise, and it’s entirely possible the hype could run ahead of the hard economic reality.