The announcement from the Prime Minister and Australian Labor Party, that a re-elected government would create a Critical Minerals Strategic Reserve, is welcome by the Association of Mining and Exploration Companies (AMEC).
Campaigning in Perth, the Prime Minister outlined plans to invest an initial $1.2 billion to establish the reserve, including a $1 billion increase to the existing Critical Minerals Facility. AMEC Chief Executive Officer, Mr Warren Pearce said, “This is a positive step forward that aligns with the Critical Minerals Production Tax Incentive (CMPTI) and will provide a major boost for the developing critical minerals industry in Australia.
“It will provide support to the private sector and assist international investors and partners with the upfront capital costs of new projects.
“In the geopolitical context of today, critical minerals are more important than ever. This policy setting will help Australia leverage our position as a major critical minerals player in the global market.”
Further details of how the Critical Minerals Strategic Reserve will work, how and when it will be implemented, along with what the initial focus will be, requires industry consultation if the Prime Minister is re-elected.
AMEC expects this policy to be followed by in-depth industry consultation, to help identify priority minerals and strategic partners.
“If done right this could help Australian critical minerals projects secure the financing they need to build new mines.
“Critical minerals are vital for national security and our national interest. So, we expect critical minerals most closely related to these areas to be a key focus of this reserve. However, there are a range of critical minerals and critical mineral by-products that should be considered.
“This is key to obtain international investment confidence from our global partners and to secure supply chains of the future,” added Mr Pearce.
Industry is still waiting for a commitment to the Junior Minerals Exploration Incentive (JMEI).
A successful incentive created in 2017, that has driven $404 million in new greenfield mineral exploration activity.
Mr Pearce said, “We’re still waiting on Federal Labor to announce their plan for the JMEI to continue. Clearly, it’s a no brainer to invest in exploration, the lifeblood of the resources industry.
“Australia’s exploration industry is struggling from a dearth of investment. With fears of a global recession worsening the situation, greenfields exploration activity has plummeted.
“The JMEI has traditionally seen bipartisan support from the Federal Parliament. Opposition Leader Peter Dutton committed to build on the previous eight years, with a $100 million commitment over 4 years if elected.
“AMEC will continue to fight for this highly successful program to continue.”
A report from BDO Australia released earlier this year showed that for every $2 spent on exploration activity, more than $6 is raised on capital markets by companies. That money was used for more rigs, for more drill holes and more exploration.
