Australia supplies 60% of the world's lithium for batteries. New Zealand built two export-first unicorns from total geographic isolation. And in the seabed near Guam, the West may be exploring its actual answer to China's rare-earth refining monopoly. The South Pacific rarely makes the front page of an investment letter — this issue argues that's a mistake.
Not investment advice. Not a recommendation to buy or sell. Research and long-horizon thinking only. Consult a qualified financial advisor before making any investment decision. Figures cited are sourced from Tracxn, Australian and New Zealand government disclosures, and independent reporting current as of writing.
Every letter in this series eventually returns to the same bottleneck: the AI and clean-energy buildout requires physical minerals, and very few countries control enough of them to matter. Australia is one of the very few. Australian lithium production is projected to exceed 330,000 tonnes in 2026, supporting roughly 60% of global battery demand — a single country underwriting the majority of the world's lithium-ion supply chain, from Western Australia's Greenbushes and Pilgangoora operations through to the Pilbara region that has become globally synonymous with the metal.
The more important shift happening right now is what Australia is doing with that position. The government's Critical Minerals Strategy 2023–2030 and "Future Made in Australia" plan include a 10% production tax incentive specifically for processing and refining, not just extraction — a direct attempt to move up the value chain rather than simply exporting raw ore. In February 2026, the government released a Critical Minerals Prospectus profiling 78 investment-ready projects across 60 companies. The strategic logic is explicit: Australia's outgoing Lynas Rare Earths CEO put it directly — the opportunity is no longer just about what comes out of the ground, but how the country uses its mining strength to build the supply chains and technologies of the future.
"The opportunity is there, but it requires coordinated action across industry and government." — Amanda Lacaze, outgoing CEO, Lynas Rare Earths
Set against the comparisons in recent letters, Australia's startup ecosystem looks materially stronger than its population alone would predict. Tracxn counts 13 Australian unicorns as of June 2026 — more than Turkey's four, far more than Malaysia's two, and competitive with Ireland's ten despite Australia having roughly five times Ireland's population working against a similar per-capita comparison. The most recent addition, Firmus, joined the club on September 16, 2025 after a $220 million Series D led by Ellerston Capital. Sydney leads with four unicorns, followed by Melbourne with three and Brisbane with two — a genuinely distributed ecosystem rather than a single-city phenomenon.
New Zealand tells a smaller but distinctive story. With just two unicorns — Halter, an agtech company using smart collars and software for livestock management, and Crimson Education — New Zealand sits well behind Australia in raw count. But the character of New Zealand's unicorns matters more than the number: both were built export-first from day one, a direct consequence of operating from a market too small to sustain a billion-dollar business on domestic demand alone. Halter reached its $1 billion valuation in June 2025 on a $100 million Series D led by Bond Capital, with US dairy farm expansion as the explicit growth thesis rather than an afterthought.
Halter's virtual fencing and animal monitoring platform lets dairy farmers manage pasture and herd movement through smart collars rather than physical infrastructure — a genuinely novel agricultural technology born from New Zealand's deep farming base, but designed from the outset to scale into much larger markets like the United States. The company's backers include Bessemer Venture Partners and Bond Capital, both firms with no specific New Zealand mandate, choosing the company purely on the strength of the product and export trajectory.
This is the part of the South Pacific story that rarely reaches an investment letter, and it connects directly back to the monetization and manufacturing themes running through this series. The Pacific Islands sit at the center of active US-China strategic competition — not a future risk, but a live, well-documented contest playing out through infrastructure financing, security pacts, and now, mineral exploration rights.
A US exploration effort is underway in Pacific seabed near American Samoa, with deposits estimated at 10 billion tons of high-grade nickel, cobalt, manganese, and copper ore — explicitly framed by regional officials as a strategic response to China's existing monopoly on terrestrial rare-earth refining capacity.
Large Chinese state-owned construction and telecommunications companies are already well established across Papua New Guinea, Fiji, Tonga, Solomon Islands, Vanuatu, and Samoa, built through Belt and Road-style infrastructure financing that few Pacific nations could otherwise access at scale.
Following China's 2022 security pact with the Solomon Islands, Australia committed $118 million to fund and train the Royal Solomon Islands Police Force specifically to reduce the country's reliance on Chinese security support — a concrete, dollar-denominated competitive response, not just diplomatic language.
Australia remains the single largest donor to the Pacific region by a wide margin, while China's regional aid spending has, in past comparative data, outpaced even direct US contributions — though China's presence is more visible through large physical infrastructure than through comparable aid totals.
Australia's critical minerals dominance is real and well-documented, but it is also a commodity-price story as much as a structural one. Persistently weak spodumene (lithium ore) prices have already forced several Australian producers into cost-cutting and care-and-maintenance decisions, including Pilbara Minerals placing its Ngungaju plant under care and maintenance in December 2024. Owning 60% of global lithium supply matters enormously over a decade-long horizon, but it does not insulate individual companies from near-term price cycles, and the sector's recent equity performance has reflected that volatility directly.
New Zealand's two-unicorn ecosystem should be read for what it demonstrates structurally, not for its current scale. A market too small to support a billion-dollar company on domestic revenue alone forces export-first thinking from day one — arguably a healthier discipline than markets large enough to let a company grow comfortably on local demand before testing international competitiveness. Whether that discipline produces materially more unicorns over the next decade, or simply remains a structural curiosity at a small absolute scale, is genuinely unresolved.
The South Pacific does not generate the headline numbers that dominate conversations about AI capital or unicorn valuations elsewhere in the world. What it generates instead is something the rest of this letter series keeps circling back to: the physical material the entire AI and clean-energy buildout actually depends on, supplied by a country with a real and growing startup ecosystem of its own, sitting at the literal geographic center of the most consequential strategic competition of the decade. That combination — resource chokepoint, credible tech ecosystem, and strategic relevance, all in one region — is rare enough to deserve more attention than it currently gets.
Long-horizon thinking on capital, technology, and the forces shaping the next decade of wealth creation. Written from first principles. Not consensus. Not noise.