Federal budget: critical minerals a focus as Australia seeks to become renewable energy superpower

The Australian economy is expected to outperform all major advanced economies but is slowing in the face of a deteriorating global economy, high inflation, and high interest rates, according to the federal government’s May budget.

Released last night (9 May), the Budget 2023-24, which is titled Stronger foundations for a better future, notes that cost-of-living pressures are squeezing households and slowing domestic demand. Real GDP growth is expected to slow to 1.5% in 2023–24, before recovering in 2024–25. The government says more jobs are being created and the unemployment rate is expected to stay low by historical standards.

In what could be a boon for the mining industry, the federal government announced in the budget that it is making moves for Australia to become a ‘renewable energy superpower’. And it has committed to investing into the critical minerals sector.

“Energy has played an important role in building Australia’s prosperity for decades. Renewable energy can do the same for decades to come – powering the next era of growth across our regions, for both traditional and new industries.”

The government reports in the budget that Australia’s large critical mineral reserves offer opportunities to invest in advanced and renewable technologies needed for the net zero transition.

“Critical minerals are essential inputs to clean energy technologies like electric  vehicles and wind turbines.

The federal government is investing $57.1 million to develop Critical Minerals International Partnerships to secure strategic and commercial partnerships. This investment builds on the $2 billion Critical Minerals Facility and $1 billion targeted to value-adding in resources, under the National Reconstruction Fund.

Also, as part of its Powering the Regions Fund, the $400 million Industrial Transformation Stream will support the growth of new clean energy industries in regional areas, as well as innovative efforts to decarbonise existing industrial activities.

The $400 million Critical Inputs to Clean Energy Industries stream of the Powering the Regions Fund will provide grant funding to support the development of clean energy industries by investing in sovereign manufacturing capability of critical inputs, such as steel, cement, lime, and aluminium. The government says funding allows these industries to maintain production while they work to reduce their emissions, and ensures Australia has secure access to critical inputs for the transition.

The budget invests a further $4 billion in Australia’s plan to become a renewable energy superpower. It positions Australia to be a world leading hydrogen producer by investing $2 billion in Hydrogen Headstart, a new program to support hydrogen production.

The government says it boosts industry-driven innovation by establishing the Powering Australia Industry Growth Centre.

White Cliff Minerals rare earths

“It takes the first steps to unlock $10 billion in new investment in firmed renewable generation and storage by funding the Capacity Investment Scheme’s initial auctions. These commitments bring the government’s total investment to becoming a renewable energy superpower to more than $40 billion.

This budget leverages existing funds to allocate $12 billion to transformational transmission projects and over $1.4 billion to power net zero growth opportunities in our regions. The government is ensuring communities can benefit from the net zero transformation by establishing a new Net Zero Authority.”

The government is also developing a Future Gas Strategy, which will support Australia’s energy system to reach 82% renewables by 2030 and become cleaner, cheaper, and more reliable, while maintaining the country’s international reputation as a ‘trusted’ energy supplier to its longstanding trading partners.

It has also commissioned Jobs and Skills Australia to undertake a Clean Energy Capacity Study to evaluate workforce needs and enable Australia to strategically plan for the skills needed for the transformation to a clean energy economy. JSA is engaging with key stakeholders to inform a final report by mid-2023.

Meanwhile, to help make Australia a leading destination for global green investors, the government is implementing corporate climate disclosure requirements and developing a comprehensive Sustainable Finance Strategy. Key new commitments include establishing an Australian government green bond program, co-funding development of a sustainable finance taxonomy with industry, and resourcing ASIC to target greenwashing in financial markets.

Write to Adam Orlando at Mining.com.au

Images: Australian Government
Author Image
Written By Adam Orlando
Mining.com.au Editor-in-Chief Adam Orlando has more than 20 years’ experience in the media having held senior roles at various publications, including as Asia-Pacific Sector Head (Mining) at global newswire Acuris (formerly Mergermarket). Orlando has worked in newsrooms around the world including Hong Kong, Singapore, London, and Sydney.