The Australian Senate has passed the Critical Minerals Production Tax Incentive (CMPTI), marking a strong commitment to the nation’s critical minerals sector.
The legislation, part of the Future Made in Australia (Production Tax Credit and Other Measures) Bill 2024, aims to stimulate billions of dollars in investment by allowing eligible entities to claim 10 per cent of expenditure for the processing and refining of Australia’s 31 critical minerals.
The term for the incentive is between 2027–28 and 2039–40, for up to 10 years per project.
“The CMPTI is a powerful strategic lever that provides the foundation for the Future Made in Australia ambitions of the country,” Association of Mining and Exploration Companies (AMEC) chief executive officer Warren Pearce said.
“It’s also the largest ever commitment from the Federal Government to critical minerals.”
The tax incentive, developed over a year of industry consultation, will provide a 10 per cent rebate on eligible processing and refining costs for designated critical minerals.
“This will stimulate billions in new investment in critical minerals processing,” Pearce said.
The Chamber of Minerals and Energy of Western Australia (CME) chief executive officer Rebecca Tomkinson welcomed the move, highlighting its potential to boost Australia’s downstream processing capabilities.
“Offering production tax incentives for hydrogen production and critical mineral processing sends a clear message to investors that Australia is serious about seizing the opportunities presented by the global energy transition,” she said.
“We know Australian resources have a central role to play as the world transitions to net-zero, and the passage of this important Bill will help to unlock more of them.”
Beyond bolstering domestic projects, the legislation is aimed at positioning Australia as a more attractive destination for global investment.
With US President Donald Trump recently announcing plans to withhold Inflation Reduction Act (IRA) payments, Pearce sees a key opportunity for Australia.
“This incentive sends a clear signal to the world, saying, if you come to Australia, your costs will be reduced because there’s a guarantee written in legislation.” he said. “While other doors might be closing, Australia’s are wide open.”
With $17 billion in government backing, the CMPTI is expected to support critical projects and create new jobs, particularly in regional areas.
AMEC will work with the Treasury and Australian Tax Office to ensure the implementation of the new policy works for everyone.
Subscribe to Australian Mining and receive the latest news on product announcements, industry developments, commodities and more.
