CANBERRA, AAP – The federal government will set up a $2 billion fund to help finance critical minerals projects.

The loan facility will be used for new projects to get off the ground in the minerals sector.

Critical minerals include resources that are used in technologies such as mobile phones, computer monitors, electric cars and solar panels, such as lithium, magnesium and nickel.

Prime Minister Scott Morrison said the critical minerals would be able to be used in sectors such as defence, renewable energy and agriculture.

“The commercial dimensions of the critical minerals market mean it is a difficult place to get established,” Mr Morrison said.

“We want to ensure that Australia’s resource producers do get established so they can link up with others in our supply chain in a free and open Indo-Pacific.”

Demand for critical minerals is expected to increase significantly in coming years.

The worldwide lithium industry is expected to be worth as much as $400 billion by the end of the decade.

Resources Minister Keith Pitt said the new loan facility would allow for the country to be a larger player in the sector.

“Australia is already among the world’s top suppliers of some of the world’s most sought-after critical minerals and we know there is enormous potential through our untapped reserves,” Mr Pitt said.

The facility will be managed by Export Finance Australia and will run for 10 years, or until the entire $2 billion has been used.

The government said the fund would help secure more jobs in the sector.

There is a strategic reason for the fund – countering the influence of China, which is the world’s largest producer of 18 critical minerals.

It also comes as the government attempts to negotiate a deal with the Nationals for a policy of net-zero emissions by 2050.

Members of the Nationals have publicly said they would not back the plan unless there are guarantees against job losses in regional areas, where mining is a key industry.