The New South Wales Government has today (18 October) committed to a $250 million royalty deferral initiative for critical minerals projects to ease financial pressures and attract investment to the state.
The royalty initiative will be an opt-in scheme where the first five years of royalties are deferred and will apply to critical minerals projects that can start production between 1 July 2025 and 30 June 2030.
It predominantly covers minerals listed on the Commonwealth Government’s Critical Minerals List and where the proponent has a market capitalisation under $5 billion.
Additionally, the government is investigating the implementation of a rapid assessment framework for mining projects as part of its new Critical Minerals and High-Tech Metals Strategy.
Currently there are 12 critical minerals mining and processing projects in NSW that are ready for investment, according to the NSW Government.
They require around $7.6 billion in capital investment and are expected to generate about 4,600 jobs during construction and 2,700 ongoing jobs.
Minister for Natural Resources Courtney Houssos says critical minerals projects typically have long lead times for development, and require a higher capital investment.
“The new royalty deferral scheme will assist mine proponents to attract investment and move faster to production,” Houssos says.
“We want NSW to be moving further down the supply chain. Extracting minerals is a critical first step, but we can generate strong economic returns and support more jobs by getting into processing and advanced manufacturing.”
This includes investigating opportunities to pilot common-user refineries and supporting investment in domestic manufacturing.
The Association of Mining and Exploration Companies (AMEC) welcomes the news, saying the commitment of $250 million in royalty deferral will provide a “massive boost” to the critical minerals industry in NSW.
Priority metals identified in the revised strategy include rare earths, silver, scandium, copper, and cobalt.
CEO Warren Pearce says it is difficult to secure investment and receive appropriate approvals for new projects at the best of times, but doing so in emerging sectors — like critical minerals — is an added challenge to overcome.
“This is why today’s announcement is so important. Recognising these companies need assistance at the ground level, to get projects up and running and create jobs both in the construction and operational phases,” he says.
“It’s a forward-thinking strategy that assists companies when they need it most, but sows the seed to reward taxpayers down the track. This is a clever and innovative way of getting more investment in critical minerals projects.”
AMEC has been a staunch advocate for these types of initiatives, as well as greater certainty for the industry around approvals, the planning process, and co-existence with other land users.
NSW hosts 21 of the 31 nationally declared critical minerals.
The Critical Minerals and High-Tech Metals Strategy identifies priority minerals and metals that have important uses in the electrification of the economy and the manufacturing of clean energy products like solar panels and batteries.
The International Energy Agency estimates that over the next 20 years, the world will need six times the amount of critical minerals currently mined to reach global net-zero carbon emissions.
This means copper production will need to double, rare earths and cobalt production will need to grow threefold, and the world will require 30 times more nickel.
“The decision to review the approvals and planning process is absolutely necessary,” Pearce says.
“These processes are often unnecessarily drawn out, costly, and without certainty. To see the focus on this area is very encouraging.”
The Critical Minerals and High-Tech Metals Strategy focuses on the five main areas of encouraging exploration, incentivising production, developing future-ready skills, establishing resilient supply chains, and engaging local communities.
NSW Premier Chris Minns says the strategy is about backing regional jobs and manufacturing jobs, and taking advantage of the critical minerals boom.
“We want to make sure we fully realise the opportunities that critical minerals and high-tech metals have for NSW,” Minns says.
“We’ve got the metals and minerals the world needs, and NSW is open for business.”
Write to Angela East at Mining.com.au
Images: iStock
