Industry responds to Australian Critical Minerals Strategy
Federal resources minister Madeleine King has released Australia’s long-awaited Critical Minerals Strategy.
The new strategy introduced by the government focuses on six key areas to drive economic growth and capitalise on Australia’s natural resources. These areas include targeted support for strategically important projects, attracting investment and international partnerships, engaging with First Nations communities and ensuring benefit sharing, promoting Australia as a leader in environmental and social governance standards, unlocking investment in essential infrastructure and services, and fostering the growth of a skilled workforce.
The government plans to direct A$500 million of new investment into critical minerals projects through the Northern Australia Infrastructure Facility.
Additionally, the strategy will establish a process to update the critical minerals list, ensuring it remains relevant and aligned with the industry’s needs.
Minister King highlighted the tremendous potential of the Critical Minerals Strategy in developing the sector and creating new downstream industries that will contribute to Australia’s economy and global emission reduction efforts for years to come.
“The new Critical Minerals Strategy outlines the enormous opportunity to develop the sector and new downstream industries which will support Australia’s economy and global efforts to lower emissions for decades to come,” King said.
“While the potential is great, so too are the challenges. The Strategy makes it clear our natural minerals endowment provides a foot in the door, but we must do more to create Australian jobs and capitalise on this unique opportunity.”
According to independent modelling, an increase in exports of critical minerals and energy transition minerals could result in over 115,000 new jobs and a boost of $71.2 billion to the gross domestic product by 2040.
If Australia invests in downstream and refining capabilities, job numbers could rise to 262,600. The GDP could also see an additional increase of $133.5 billion by 2040.
Australia faces intense international competition for critical minerals investments. The US and European Union have already announced incentives to diversify supply chains and decarbonise their economies.
In response, the Australian government is collaborating with industry and international partners to connect Australian projects with emerging markets. This will include countries such as the US, UK, Japan, Korea, India, the EU, and its member states.
The mining industry has expressed its expectations for the strategy. These include streamlined approvals, tax incentives, and support to enhance the competitiveness of downstream processing within Australia.
“It’s disappointing the government hasn’t backed up its rhetoric with meaningful investment to make battery chemical processing cost competitive in Australia,” Mineral Resources managing director Chris Ellison said.
Iluka Resources has already secured a $1.25 billion non-recourse loan from the government for its Eneabba rare earths refinery. They welcomed the strategy and the prioritisation of rare earth magnets as a critical technology.
“Australia has a once-in-a-generation opportunity to usher in a new era of sovereign capability, value addition, high-skilled jobs and economic growth,” CEO Tom O’Leary said.
“We welcome the government’s efforts to better align policy to support the longevity of Australia’s rare earth resources, and the acknowledgment that coordination will be particularly important as we seek to move further downstream and build truly sustainable supply chains.”
The Minerals Council of Australia praised the release of the strategy. They identified it as a well-considered framework that provides a coherent integration of existing policies.
“While the government’s strategy is a leap forward, providing a coherent framework for integrating already well-developed policy areas, it also highlights the significant work that remains to be done to deliver and implement an integrated Australian industry policy framework for mining processing and manufacturing,” she said.
The Association of Mining and Exploration Companies called for more efficient regulatory approvals for 81 projects. These projects are currently under development in Australia. They emphasised the importance of developing critical minerals, copper, nickel, lithium, and vanadium redox batteries to establish a complete battery supply chain in Australia.
Shadow minister for resources Senator Susan McDonald said the strategy provided no clarity or direction.
“The $500 million allocated from the Northern Australia Infrastructure Facility is simply reallocated Coalition funding that David Littleproud and I announced in December of 2022,” she said.
“Labor’s lethargic approach to the development of this important sector means that Australia risks missing out in the worldwide competition for necessary investment in mining and value-add industries.
“Industry must be incredibly disappointed with this government’s announcement today – yet another example of Labor’s all-talk and no-action approach.”