Measures would cover nickel, lithium, vanadium, cobalt, graphite, and rare earths sectors.
The Australian Government is considering implementing tax credits for companies constructing domestic critical mineral processing facilities, Reuters reports, citing the Association of Mining and Exploration Companies (AMEC) CEO Warren Pearce. The measure could be included in Australia’s 2024 federal budget, which is planned to be presented in May, and would set the country up to benefit more from its natural resources. It would provide companies that construct such projects with a production tax credit of up to ten percent, stretch beyond Australia’s nickel and lithium sector, and extend to the vanadium, cobalt, graphite, and rare earths sectors, Reuters added.
Currently, Australia exports most of its natural resources as raw materials to be refined abroad but has recently begun to revert course in an effort to profit from higher prices for processed minerals on the global market. For example, the largest rare earth producer outside China, Lynas, has shipped its rare earth ores to Malaysia so far but commissioned a newly constructed processing plant in Western Australia in December.
The Australian Government is yet to reveal the final details of its 2024 federal budget. Resource Minister Madeleine King said last month that she “can’t make any commitments on the level of that tax credit” but emphasized that the government is pursuing ways to increase Australia’s critical mineral downstream processing industry. In addition to tax credits for domestic production, Australian Treasurer Jim Chalmers advocated for reforms that incentivize sustainable and responsible production practices globally at the G20 talks in Sao Paulo, Brazil. Relying on current supply chains and practices in the critical minerals industry would neglect the economic vulnerabilities of poorer communities, Chalmers said and advocated for implementing more environmental, social, and governance (ESG) standards.
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