A $7 billion critical minerals push

The Federal Government is close to securing approval in the Senate for a $7 billion tax incentive package aimed at bolstering Australia’s critical minerals and rare earths industry.

Federal Minister for Resources Madeleine King spoke to ABC’s 7:30, saying the incentive would create jobs, strengthen supply chains and position Australia as a global leader in mineral processing.

“The production tax credits for critical minerals and rare earths is a tax support and incentive to help companies process and refine critical minerals and rare earths here in Australia,” King said.

“That’s important because critical minerals and rare earths go into modern technologies that we use every day, like mobile phones, laptops, batteries, but also for green energy technology, like solar panels and wind turbines, (and) defence applications.”

King said that many of the companies potentially involved in the incentive are not large corporations.

“It will be taxpayers money going into this scheme to incentivise the production of these minerals here in Australia,” she said.

“I think the Australian people, and particularly there are parts of this country that have more of these critical minerals and rare earths – Queensland in particular, but also Western Australia – and the citizens of those great mining states understand how difficult some of these projects are because they live and work in them all the time.”

Pressed on why the money should come from taxpayers, King said the sector operates under competitive international market conditions, making it difficult to secure investment without government support.

“What it is about (is) addressing the challenges that critical minerals and rare earths processing have due to international market pressures,” she said.

“Whilst these minerals and rare earths are in demand, their production and their pricing is dominated by an international market that is not clear, it is entirely opaque.”

King said the justification for her is to create a new industry in Australia that will create new jobs and will diversify supply chains.

“We should be competing in the processing of minerals, critical minerals, and rare earths here in Australia,” she said.

“We should be competing and being involved in that, and this is what it takes. Just like it took government involvement to start the iron ore industry.”

The tax incentives come with community benefit principles, including commitments to well-paid and secure jobs.