'Australia has the potential to be a renewable energy superpower, and with our enormous mineral wealth, we can help the world make the switch to net zero too.'[1]
- The Hon Chris Bowen, MP, Minister for Climate Change and Energy.
Australia’s critical minerals sector has been transformed in 2024 by regulatory overhauls, strategic funding initiatives, and shifting global priorities. Critical energy transition minerals (CETMs) have emerged as the linchpin of the energy transition. Australia, endowed with vast reserves of these CETMs, is positioning itself at the forefront of the global energy transition.
King & Wood Mallesons’ Lorenzo Pacitti, Sector Lead Mining & Resources, comments:
'This year has seen unprecedented M&A activity in CETMs, including opportunities arising from global disruption in critical minerals supply chains. The exponential demand of AI on power, and consequentially on CETMs, will need to be factored into and supported by all sources of capital investment to meet demand and to achieve net zero.'
In our final critical minerals insight for 2024, we explore the most recent regulatory developments and policy initiatives, including foreign investment reforms, the Future Made in Australia initiative, and commitments aligned with the 2024 UN Climate Change Conference (COP29), building on the past year’s developments.
Unwrapping recent gifts from the Federal and State governments
Over the past month, the Federal and State governments have continued to focus on leveraging Australia’s potential to become a critical minerals superpower:
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Our summary
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Critical Minerals Production Tax Incentive
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The Future Made in Australia (Production Tax Credit and Other Measures) Bill 2024, which includes the Critical Minerals Production Tax Incentive (CMPTI), was introduced to Parliament on 25 November 2024.[2] The CMPTI, to be delivered as a refundable tax offset, is a $7 billion component of the Future Made in Australia plan aimed at supporting the critical minerals processing sector. The Bill successfully passed the House of Representatives on 29 November 2024 and is currently under consideration in the Senate.[3] The Bill may be passed through the Senate in early 2025 (ahead of the 2025 Federal election), with the CMPTI then becoming effective from 1 July 2027. For further details please see here. |
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Investment in CETM projects
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The Federal Government announced at the start of December its further investment of $21 million in five critical minerals projects, supporting vanadium, graphite, and rare earth production and processing operations.[4] The new grants mean the Federal Government has funded approximately $40 million in projects involving international industry partners across Queensland, South Australia, and Western Australia since the program opened in February 2024. In a very significant recently-announced initiative, the Federal Government is also providing up to $475 million to Iluka Resources’ Eneabba Rare Earths Refinery project in Western Australia.[5] This facility will process minerals essential for technologies like wind turbines and electric vehicles.[6] These investments are designed to diversify global supply chains for critical minerals and rare earth elements, reinforcing Australia’s position in these markets.[7] |
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Driving decarbonisation
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The Federal Government announced in early December a $US75 million partnership between Clean Energy Finance Corporation and Resource Capital Funds which will focus on decarbonising mining operations for lithium, nickel, and copper — minerals vital for electrification and battery production.[8] |
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Victorian Critical Minerals Roadmap
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The Victorian Government’s Victorian Critical Minerals Roadmap, released on 9 December 2024, is built around four key themes: mapping the opportunities, modernising the regulatory regime, critical minerals production and processing in Victoria, and sharing the benefits of Victoria’s minerals. Key initiatives include the establishment of the Victorian Critical Minerals Coordination Office to streamline approvals, and simplifying regulations while maintaining high environmental and social standards.[9] |
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Western Australia
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On 27 November 2024, the WA Government announced a $150 million support package which aims to support WA’s struggling critical lithium industry over the next two years. Government fees for downstream processing of lithium will be waived by Government Trading Enterprises (including electricity and water providers) for up to 24 months, as will port charges and mining tenement fees for lithium miners in the ramp-up phase of production. The State will also establish a $50 million interest-free loan facility, available to help lithium miners sustain operations.[10] The State’s Exploration Incentive Scheme continues to support explorers targeting critical minerals, with 17 out of 50 successful applicants for drilling grants targeting battery minerals such as lithium and rare earth elements.[11] |
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Queensland Critical Minerals Prospectus
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This updated prospectus showcases Queensland’s premier critical minerals opportunities and investment case to stimulate advancement in the critical minerals sector. Details of government support provided to critical minerals projects is set out in the prospectus, along with a listing of programs, initiatives and strategies that critical minerals projects can utilise to obtain government assistance and funding – including under the $315 million Queensland Critical Minerals Strategy and the $170 million Critical Minerals and Battery Technology Fund.[12] The prospectus also sets out details of critical minerals projects ready for investment, known critical minerals deposits, supporting infrastructure and logistics networks, and Queensland’s diverse mining and resources industry. The prospectus emphasises Queensland’s foundation of ESG stewardship. With Queensland’s new government sworn-in during November 2024, we look forward to further critical minerals announcements and initiatives in 2025 and beyond. |
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NSW Critical Minerals and High-Tech Metals Strategy 2024–35
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On 18 October 2024, the NSW Government released its 11-year strategy for critical minerals and high-tech metals that will underpin the energy transition. The strategy is focused in the short-medium term on co-investing in the Federal Government’s Critical Minerals Exploration Program (and other collaboration with the Federal Government), introducing a deferred royalty scheme, and partnering with ANSTO to investigate the opportunity for a common user rare earth elements refinery in NSW.[13] |
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Globally, there has been increased interest in regulating CETMs, including:
- UNSG Panel: The UN Secretary-General’s Panel on Critical Energy Transition Minerals released a report outlining 7 voluntary guiding principles to address challenges within the critical energy transition mineral value chains, as the transition is estimated to “almost triple the demand for critical energy transition minerals by 2030 and quadruple it by 2040”.[14] COP29 in Baku convened a ‘High-Level Meeting on Resourcing the Energy Transition with Justice and Equity: Advancing the recommendations of the UN Secretary-General’s Panel on Critical Energy Transition Minerals’, with speakers including the UN Secretary-General, and this forum will reconvene at COP 30 in Brazil.
- G20: The G20 Rio de Janeiro Leaders’ Declaration supported reliable, diversified, sustainable and responsible supply chains for critical minerals and noted the work of the UNSG Panel.[15]
- UK and US: The UK and US signed an agreement for civil nuclear collaboration at COP29 in Baku.[16]
- Nuclear energy capacity: Six additional countries (meaning a total now of 31 countries) have signed the joint ministerial-level declaration ambitiously pledging to triple global nuclear energy capacity by 2050, from the 2020 level.[17] The US announced it would increase its nuclear generation fleet by 200 GW between now and 2050.[18]
Australia's critical minerals sector - What else happened in 2024?
The new initiatives above close out a very active year in the critical minerals space. We have canvassed this past year the foundational aspects of Australia’s critical minerals sector, the increased demand AI will place on copper and renewable energy (and therefore CETM), the role of uranium and nuclear energy in supply chains globally, and international partnerships.
Our series of insights over 2024 highlighted:
Foreign investment regime reforms
Significant reforms to Australia's foreign investment regime, particularly focused on critical minerals, were announced in May 2024. Key points included increased scrutiny for critical minerals, with a focus on national security concerns due to the strategic importance and supply chain vulnerabilities of these resources. Read more.
The central role of copper to AI and net zero
Copper plays a vital role in artificial intelligence and renewable energy due to its high conductivity and use in semiconductor chips and data centres, and AI itself drives higher power demand (consequentially driving greater need for CETMs). Read more.
Uranium, the energy transition & the nuclear fuel global supply chain
Australia’s vast uranium reserves and strong regulatory frameworks position it as a critical player in the global nuclear fuel supply chain. Read more.
Opening the doors to international funding for Australian critical minerals
Establishing the Minerals Security Partnership Finance Network has opened doors to international funding for Australian critical minerals projects. This initiative, backed by the US, EU, and other global partners, promotes sustainable investments across the critical minerals supply chain. Read more.
Looking ahead to 2025 and beyond
Australia’s critical minerals sector is at an inflection point, with the global escalation of CETM investment, supply chains and opportunities, against a background of increasing regulatory attention. Within both the Australian and global contexts we expect 2025 will focus on energy security, decarbonisation, roads to net zero, power demands of AI and the resilience of global supply chains – all of which require CETMs.
The UN Secretary-General’s Panel on Critical Energy Transition Minerals acknowledged that the global energy transition is estimated to 'almost triple the demand for critical energy transition minerals by 2030 and quadruple it by 2040'.[19] Clearly, an amplification of current investment targets is required to meet the demand for CETMs to support both the energy transition and power-intensive AI. Australia is very well-placed, with deep sector expertise and a stable political and regulatory environment, to support and be a preferred location for the transformation of the CETM sector.
There is an increased emphasis on a ‘just’ energy transition, particularly in international forums, which we expect will continue at COP30 in Brazil. A ‘just’ energy transition will require all industry participants and investors to prioritise environmental, social, and governance principles in all CETM projects and investments.
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