The re-election of the Australian Labor Party over the weekend has put the mining industry at ease given returning Prime Minister Anthony Albanese’s commitment to a Critical Minerals Production Tax Incentive (CMPTI).
The Association of Mining and Exploration Companies (AMEC) says the returned Albanese government ensures that the legislated $7 billion CMPTI will go ahead.
In November 2024, the Australian Government introduced legislation that will provide tax incentives for critical minerals production.
The CMPTI will provide a 10% tax credit for companies committed to the downstream processing of critical minerals here in Australia.
AMEC expects the initiative to level the playing field with global competitors and provide the certainty investors need to commit to major downstream processing projects in Australia.
CEO Warren Pearce says with a mandate now secured, it is time for action on key policy initiatives that will support long-term investment and drive Australia’s international competitiveness, especially in critical minerals.
Meanwhile, the Chamber of Minerals and Energy WA is backing Labor’s $1.2 billion Critical Minerals Strategic Reserve, but also urging the re-elected government to quickly shift its focus to improving investment fundamentals.
Through national offtake agreements, the government will acquire agreed volumes of the minerals from commercial projects, while the selective stockpiling process involves specific critical minerals deemed necessary for national security.
Albanese announced previously that the initial investment includes a $1 billion increase to the existing Critical Minerals Facility which was established in 2021. The Critical Minerals Facility, managed by Export Finance Australia, provides financing to projects that are aligned with the government’s critical minerals strategy.
Chamber of Minerals and Energy WA (CMEWA) CEO Rebecca Tomkinson is calling for a streamlining and acceleration of federal environmental assessments to reverse the “recent decay in Australia’s investment fundamentals”.
“Environmental law reform is long overdue but must deliver on the stated goal of improving outcomes for both the environment and for business,” Tomkinson says.
“The only way to achieve that is through early, open and frequent consultation with all stakeholders.”
According to the Minerals Council of Australia, approvals of exploration licences in places like the Northern Territory are significantly slower than Western Australia, where a streamlined online system allows approvals in 15 days.
“In contrast, NT explorers must complete 200-page applications, with exploration licence approvals on Native Title land averaging 7.7 months,” the organisation says.
“Many explorers have been waiting for over 12 months for their approvals to conduct low risk exploration activities, delaying projects and jeopardising funding.”
However, in an interview with Mining.com.au last month, Tomkinson said duplicative and cumbersome assessment processes were acting as a handbrake on WA’s resources sector and the national energy transition.
“WA has an abundance of the minerals and energy the world needs to navigate both the energy transition and rising geopolitical instability,” she says.
“But we’re not the only place that produces commodities like iron ore, LNG and rare earths.
“Investors have options. As a nation, we need to start acting like we’re serious about competing for their capital.”
Tomkinson says the issues impacting the mining sector include high energy prices, long project assessment times, uncompetitive corporate tax settings and a disconnect between productivity and wages growth.
“While Future Made in Australia supports like production tax incentives and the Green Iron Investment Fund are important and welcome, they cannot compensate for flawed fundamentals,” Tomkinson notes.
“Australia is well placed to capture a new wave of resources investment to underpin another generation of prosperity – but that wave will pass us by completely if we fail to get the basics right.”
In late January, CMEWA released its Federal Pre-Budget Submission which contains more than 90 recommendations.
The organisation put forward recommendations around unwinding recent industrial relations reforms, streamlining approvals, expanding WA’s power network, introducing a green iron production tax credit and slashing the corporate tax rate.
WA’s resources sector accounts for roughly half of the state’s economic activity and capital expenditure, and almost 90% of exports. In 2024, WA resources alone contributed 9% of Australia’s GDP.
AMEC is also advocating for the removal of costly and time-consuming approval duplication processes.
“A convincing win by Labor and a disappointing result for the Greens, shows Australians expect a more balanced approach on environmental issues, one that keeps impacts on our economy in mind,” Pearce says.
Write to Angela East at Mining.com.au
Images: iStock
