The federal government is backing the emerging green metals industry with $3 billion worth of commitments, while lobbyists point to missed opportunities for explorers.
The federal government is backing the emerging green metals industry with $3 billion worth of commitments, while lobbyists point to missed opportunities for explorers.
In the federal budget handed down tonight, Treasurer Jim Chalmers outlined that the government will invest $3 billion to support the production of Australian-made green metals.
The support for the production of green metals, like aluminium and iron, will partially come in the form of $2 billion worth of previously outlined aluminium production credits to encourage smelters to switch to renewables by 2036.
Its not yet clear whether local players Alcoa and South32 - which produce alumina for export rather than for further processing into aluminium - will be eligible for the credits coming into effect in FY29.
It comes against the backdrop of the US imposing a 25 per cent global tariff on steel aluminium and rising prices for raw material bauxite, mined in the state's south.
The other $1 billion will be used for a previously touted Green Iron Investment Fund, up to half of which will go towards backing under-administration Whyalla Steelworks in South Australia.
The remaining funds will be open to industry players with both existing facilities or greenfield green iron projects. Among those pursuing green metals ventures in Western Australia are BHP, Rio Tinto, and Fortescue.
South of Perth, BHP, Rio, Woodside Energy and BlueScope are working together on an electric smelter iron making pilot project at Kwinana.
Up north, Fortescue has broken ground on its green iron production plant at Christmas Creek, with strong emphasis placed on the new industry by the mining major.
The previously touted $2 billion expansion of the Clean Energy Finance Corporation was also outlined in the budget. The fund has backed the like of Liontown Resources’ Kathleen Valley lithium mine and the Collie Battery stage two project.
“This will help develop new industries in clean energy manufacturing, green metals, and low carbon liquid fuels, and unlock private investment,” Mr Chalmers said.
The federal government will also spend $750 million on the development of new technologies, and fund pilot and demonstration projects supporting Australia’s green metals industry.
Industry bodies react
The Minerals Council pointed to the federal government “quietly abandoning” the Junior Minerals Exploration Incentive, after stakeholders were pushing to make it a permanent feature in the budget.
“[The] government has sent a clear message: Australia’s mining industry is being ignored at precisely the moment we should be securing our resource future,” Minerals Council chief executive Tania Constable said.
“The decision is a severe setback for exploration investment, undermining investor confidence and weakening Australia's long-term mineral resource pipeline.
“Without this pipeline, there is no downstream processing and manufacturing.”
The Association of Mining and Exploration Companies had been calling on the federal government to extend and double an exploration incentive scheme.
The lobbyist said the budget missed an opportunity demonstrate support for the minerals exploration industry.
AMEC chief executive Warren Pearce said they were expecting both major parties to address measures in the upcoming election to support the sector.
“The JMEI is a proven program that supports junior exploration companies and is a substantial contributor to Australia’s economy and government revenue,” he said.
“Exploration needs support, and we need to see strong commitments from the major parties during this election campaign.
“You can’t have a mining boom or downstream processing, if you don’t make the discoveries in the first place.”
CME chief executive Rebecca Tomkinson welcomed confirmation of the measures but she warned substantial work remained to improve investment attractiveness.
Several of CME’s budget recommendations didn’t make the cut, including slashing Australia’s corporate tax rate to 25 per cent or repealing IR reforms.
“Easing the immediate cost of living burden on struggling families is essential,” Ms Tomkinson said.
“But the best way to deliver long-term, sustainable cost of living relief that doesn’t push the Federal Budget further into deficit is by supporting industry to grow.”
