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Critical minerals companies spruik benefits of production tax credit to ease industry crisis

Neil WatkinsonKalgoorlie Miner
Association of Mining and Exploration Companies chief executive Warren Pearce.
Camera IconAssociation of Mining and Exploration Companies chief executive Warren Pearce. Credit: Daniel Wilkins/The West Australian

Critical minerals explorers and miners have spruiked the benefits of the Federal Government introducing a US Inflation Reduction Act-style production tax credit in Australia to help address the current industry crisis.

Goldfields-based Wyloo Metals and IGO were among the firms that accompanied the Association of Mining and Exploration Companies in the mission to Canberra on Wednesday.

AMEC chief executive Warren Pearce said the meetings provided an opportunity for the miners to relay the real struggles facing the industry at the moment, and also send a strong message to the Federal Government that now was the time for action.

“The upcoming Federal Budget provides Treasury with a lever to pull that will reinvigorate the critical minerals sector and help Australia compete further downstream,” Mr Pearce said.

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“If Australia wants to be more than a dig-and-ship country, now is the time to provide incentives required for the energy transition vision.”

AMEC said last year it engaged Mandala Partners to economically model the introduction of an US Inflation Reduction Act-style production tax credit into Australia.

Mandala concluded a 10 per cent tax credit for downstream materials producers would reduce the production cost disadvantage faced by Australian projects compared to the US.

AMEC said the implementation of the credit would create thousands of new jobs and a new high-value industry for Australia.

It said across the globe there had been more than 1500 different incentive programs aimed at securing a piece of the critical minerals supply chain, with the US IRA the most notable, being a trillion-dollar package of incentives to motivate companies to setup downstream processing on their shores.

“Australia has no monopoly on success,” Mr Pearce said.

“Just because we have the minerals in the ground doesn’t mean we are guaranteed to get the investment needed to find, mine and add value to them.

“It provides us with an opportunity, but that is all.

“Right now, these are some of the hard truths that need to be recognised: Australia has lengthy approvals time frames, is an expensive place to do business, and is seeing investment lured overseas by global incentives such as the IRA.

“The PTC (production tax credit) Report focuses on what Australia can do to compete with nations that are moving the dial on incentives.

“Nickel is a canary for the critical mineral sector. Beyond the thousands of local jobs already lost, we now face the real risk that new critical minerals value-adding projects in Australia will simply not happen because our competitors have moved first.

“Today, we put our cards on the table.

“It’s now over to the Albanese Government.

“If Australia truly wants to seize the opportunity of the global energy transition, of which the critical minerals industry is the backbone, then a PTC is an important part of the answer.”

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