SYDNEY - Chinese Premier Li Qiang will meet business leaders in Western Australia on Tuesday, and is expected to visit a lithium processing plant in the resource-rich state on the last day of his four-day visit to Australia.

Li, China's top-ranked official after President Xi Jinping, will attend a business roundtable event in Perth along with Australian Prime Minister Anthony Albanese.

Li's visit is the first to Australia by a Chinese premier in seven years and marks a stabilisation in ties between the U.S. security ally and the world's second-biggest economy.

Li is scheduled to visit a lithium hydroxide processing plant of Tianqi Lithium Energy Australia, which is 51% owned by Shenzhen-and Hong Kong-listed Tianqi Lithium and 49% by Australian miner IGO.

Western Australia supplies more than half of the world's seaborne iron ore, with China among its top customers, and half of its lithium.

Li's visit raises the issue of whether Australia will continue to accept high levels of Chinese investment in its critical minerals sector, as Western security allies push to reduce reliance on Beijing for the rare earths vital to electric vehicles. Australia last month blocked several Chinese investors from increasing stakes in a rare earths miner on national interest grounds.

Li said on Monday that China hopes Australia will provide "a fair, just and non-discriminatory business environment for Chinese enterprises".

In an opinion article in The West Australian newspaper on Tuesday, Albanese said his government wants to use Australia's critical minerals and rare earths to create more jobs in processing, refining and manufacturing, and sell to a broader range of markets.

"This commitment to revitalising local manufacturing doesn’t mean cutting trade ties or pulling up the economic drawbridge, this is about moving Australia up the international value chain," he wrote.

Australia has encouraged its farmers and producers to diversify export markets beyond its largest trading partner after China imposed blocks on $20 billion in Australian exports in 2020 in a political dispute that has now largely eased.

Three-quarters of Australia's exports to China come from Western Australia, Albanese noted.

"Just as we want to build Australia’s economic resilience by deepening and diversifying our trade relationships, we’re also taking action to ensure foreign inv...