Australia should restart domestic helium production. Government action will be needed for it to do so.
Iranian strikes on Qatar’s Ras Laffan gas complex have knocked out roughly a third of the world’s helium supply. The companies that make almost all of the world’s most advanced AI and communication chips, TSMC, Samsung and SK Hynix, cannot do so without helium.
Australia, with one of the world’s largest helium endowments, is one of the few countries that can offer a more reliable supply of the gas.
The extreme ultraviolet lithography systems that pattern every leading-edge chip can’t operate without helium. Only helium has the right physical properties to keep the optical path contamination-free at the wavelengths involved. As feature sizes shrink, each wafer requires more lithography passes and more helium. As helium is used across the production process – including in cooling, purging, and leak detection – demand for the element will only rise.
The semiconductor sector takes around 15 percent of the world’s helium supply. But healthcare uses more: magnetic resonance imaging machines won’t function without helium, which cools their superconducting magnets. Likewise, aerospace needs helium for leak detection and precision welding. Redirecting helium away from these applications is not realistic. De-prioritising non-critical uses, such as weather balloons, would not cover a shortfall on this scale. Reinforcing the reliability of production is the only option.
By becoming a trusted helium source, Australia could gain leverage it has never had in the global semiconductor supply chain. Today, Australia needs the supply chain. With helium, the supply chain would also need Australia. Australian helium need not be the cheapest, but it needs to be one that will still be available if the cheapest source fails.
Only a handful of countries produce helium. The United States and Qatar together supply nearly 90 percent. Qatar is out, and the US needs what it produces. Sales to Western countries by Russia, the third-largest producer, have been curtailed by sanctions. Algeria and Canada produce only a fraction of Qatar’s output. For South Korea and Taiwan, which sourced roughly two-thirds of their helium from Qatar and the Gulf, there is no obvious replacement. Global chip supply is at risk.
Helium is extracted as a byproduct from trace concentrations in natural gas, particularly during production of liquefied natural gas. Liquefaction concentrates it alongside other non-condensable gases. The technology to recover it is proven and in use worldwide: Qatar, the US, Algeria, Russia, Canada and Poland all operate helium extraction facilities linked to their gas industries. Australia’s LNG sector is one of the largest in the world.
In 2018, researchers at Geoscience Australia showed that 14 of the 18 LNG projects then operating or proposed produced waste gas with helium concentrations above the threshold considered suitable for commercial extraction. In 2021, the Future Energy Exports Cooperative Research Centre estimated there were 3.6 billion cubic metres of helium – equivalent to 21 years of global consumption at current rates – in Australia’s demonstrated natural gas resources. In 2022, a peer-reviewed study by the same centre found that a helium recovery plant modelled on Australian conditions would pay for itself in less than three years.
But LNG operators are in the gas business, not the helium business. Without dedicated recovery equipment, they must let their helium vent to the atmosphere. No Australian LNG operators have commercial reasons to invest in that equipment. So a material of strategic value is lost because no one has the incentive to capture it.
In 2023, global helium demand was accelerating, driven by semiconductor manufacturing and AI infrastructure. In that same year, Australia removed helium from its Critical Minerals List, and its only helium production facility, at a Darwin LNG plant, shut down.
Australia should restore helium to the Critical Minerals List. The material was removed in line with allied assessments that supply chains were stable. They turn out not to have been. Without designation on the list, helium production won’t receive resources committed to critical-minerals development. Alongside relisting, the government should commission feasibility studies for helium recovery across Australia’s LNG facilities and domestic gas infrastructure. It should also require helium-recovery assessment as a condition of new production licences, as Qatar did with its Barzan gas plant.
Had Australia been producing helium, Indo-Pacific chipmakers would have had an allied alternative when Qatar was knocked out.
Canberra should ensure they have an alternative when disruption next occurs. It should position Australian helium as a concrete deliverable within AUKUS and Quad semiconductor supply-chain initiatives. Australia is the only allied nation in the Indo-Pacific that could credibly supply semiconductor-grade helium at scale. As mentioned, the US needs the helium it produces. Like South Korea and Taiwan, Japan also needs helium but does not produce it. Cooperation opportunities with India are also emerging: India is one of Australia’s fastest-growing trade partners, and under the India Semiconductor Mission, it is bringing its first semiconductor manufacturing facilities online.
Australia has spent years asking how it can enter the semiconductor supply chain. The answer is beneath its feet, and it is venting into the atmosphere.