Goldfields mine developer and explorer welcome Federal Budget’s 10-year, $7b critical minerals investment

Two companies heavily invested in critical minerals mine development and exploration in the Goldfields have welcomed a 10-year, $7 billion investment in this week’s Federal Budget. Federal Treasurer Jim Chalmers announced the critical minerals production tax incentive in the 2024-25 Budget on Tuesday night, which will give a 10 per cent refundable tax offset for the eligible costs of processing critical minerals in Australia. Alliance Nickel managing director and chief executive Paul Kopejtka said to stimulate Australia’s critical minerals industry the Federal Government needed to invest in and actively support companies working to contribute towards a clean energy future. “We have seen good examples of that recently, including our own NiWest nickel-cobalt project near Leonora being awarded major project status to help streamline the approvals pathway to development and become Australia’s next green nickel producer,” he said. “Alliance is particularly pleased with the announcement of a 10-year, $7 billion production incentive targeting the critical minerals sector that will see a 10 per cent refund on processing and refining costs for Australia’s critical minerals industry including, importantly, for future battery nickel projects such as our NiWest project.” Asra Minerals managing director Rob Longley said every dollar invested to advance the critical minerals sector in WA and Australia was a win for junior exploration companies such as Asra. “We’re actively looking for Australian Government-listed critical minerals such as lithium and rare earth elements in WA’s Goldfields region that speed up the pathway to decarbonisation and greener economies,” he said. “The road to net zero literally runs through our resources sector, with Australia home to nine of the 10 critical minerals needed for lithium batteries and an abundance of other minerals required to build EV components.” The Association of Mining and Exploration Companies, which pushed for the production tax credit, also welcomed the investment. Chief executive Warren Pearce said it showed how serious the Government was about the energy transition and decarbonising the Australian economy. “A critical minerals production tax incentive is the cornerstone of the Future Made in Australia strategy and sends a clear message to Australians and the world that Australia means business,” he said. As part of its advocacy, AMEC had been working closely with Federal resources minister Madeleine King for more than a year. “Australia is already so much more than a dig and ship country,” Mr Pearce said. “This announcement strengthens the economics to ensure we can value-add to our critical minerals, which are highly sought after across the globe. “It will generate new projects in new industries that will drive further economic growth, thousands of new jobs and continue to deliver our high standard of living.” The critical minerals production tax incentive will provide a 10 per cent tax credit to companies undertaking downstream processing that value-adds to raw minerals. There are already companies looking to do this, with a tax credit an important lever to encourage action. “This is a proven mechanism that will reward those willing to take a risk in establishing new and costly industries, that if successful, will deliver a significant return on investment for Australia,” Mr Pearce said. “To be clear, this incentive is a zero-risk approach for Australia to take. If companies don’t produce a value-added product, they don’t receive a tax credit. It’s as simple as that.” He explained a production tax incentive ensured the Australian Taxation Office only returned cash to a company if and when it entered into production. This made it a safer measure compared to direct grants or accelerated depreciation schemes that could see money lost and potentially leave projects half-finished if market sentiment changes. “With the world positioning itself for the future net-zero economy, this policy setting gets us back in the game,” Mr Pearce said. “A couple of years ago Australia was attracting major new investments, with new value-adding projects set up in lithium, for example. “Then, an influx of massive market interventions like the US Inflation Reduction Act began and we watched that investment move elsewhere. “It’s such an obvious opportunity for us and we can’t let it slip away. “Australia can’t afford to sit on the sidelines while other countries put measures in place to secure their future. “This is a global race to decarbonise the economy, and Australia is finally at the start line. “Doing nothing simply isn’t an option.”