Mineral Resources has stepped up its calls for increased government support for processing of ‘critical minerals’ in Australia saying it is needed to match subsidies on offer elsewhere.
Mineral Resources has stepped up its calls for increased government support for processing of critical minerals in Australia, saying it is needed to match subsidies on offer elsewhere.
The Perth-based mining company has highlighted the US government’s Inflation Reduction Act, which offers generous incentives to encourage minerals processing in that country.
In a pre-budget submission, Mr Ellison said it was becoming increasingly difficult to convince international partners and investors of the economic value of building battery chemical facilities in Australia when so much was on offer elsewhere.
“Without substantial action by governments – including tax incentives, direct grants, prioritising approvals and international bilateral deals – our country will miss out on this enormous opportunity,” he said.
“The opportunity is right in front of us, but if we blink we will miss it.”
Specific proposals include direct grants of between 20-30 per cent of a project’s capital cost, instant or accelerated tax write-off for battery chemical projects, investment in enabling infrastructure and approvals facilitation, as well as fast-tracked government loans and approvals processes for battery chemical facilities.
Mr Ellison has previously suggested Australia should pursue opportunities for downstream processing of lithium, nickel, rare earths and other so-called critical metals, all the way to battery manufacturing.
Most industry analysts suggest the best opportunity for Australia is intermediate processing, such as producing cathodes.
That would build upon investments already being made in three lithium refineries in Western Australia, by Chinese company Tianqi, US company Albemarle Corporation and Perth’s Wesfarmers (via Covalent Lithium) to produce lithium hydroxide.
“Each of these projects has been plagued by delays, technical challenges and significant capital cost blowouts,” Mr Ellison wrote in the submission.
However, his submission did not refer to whether similar issues arose with projects being built overseas.
Mineral Resources is a big producer of spodumene concentrate, which is the key feedstock for lithium refineries.
It recently agreed to spend $1 billion buying a stake in refineries its joint venture partner Albemarle is building in China and elsewhere.
However, Mr Ellison has often spoken about his company’s desire to build its own refinery in Australia.
The federal government already provides extensive support to the sector via a number of loan schemes, including the $4 billion Northern Australia Infrastructure Facility, the Clean Energy Finance Corporation and the Australian Renewable Energy Agency.
It has also provided grants through the Modern Manufacturing Initiative, the $2 billion Critical Minerals Facility, the $200 million Critical Minerals Accelerator Initiative and the $50 million Critical Minerals Development Program.
Mr Ellison’s company says more is needed.
“Current arrangements are welcome, though akin to bank project finance,” it said in relation to the government loans schemes.
“Given urgency of global market, fast-tracked finance should be provided.”
The federal government is developing a new Critical Minerals Strategy, to be released later in 2023.
Persuant to that, Resources and Northern Australia Minister Madeleine King hosted a ministerial roundtable in Perth this month.
“Ministers agreed that the development of our critical minerals sector is a national priority, which will lead to new economic opportunities, particularly for regional Australia, and will help produce the materials needed to lower emissions in Australia and around the world,” she said afterwards.
