Australia considers tax credit for minerals processing, says industry group

Australia’s government is seriously considering a possible 10% production tax credit that would apply to companies developing processing facilities for critical minerals, Association of Mining and Exploration Companies (AMEC) CEO Warren Pearce said.

The tax credits would extend beyond companies in Australia’s nickel sector to include producers of lithium, vanadium, cobalt, graphite and rare earths, he said to reporters in Canberra, according to a recording of his news conference provided by AMEC.

“Around the world, other countries are making major market interventions that are making it difficult for Australian companies to compete,” Pearce said.

“We want to keep more of the value of our minerals here in Australia.. by building value adding industries,” he said.

Asked if the government had taken AMEC’s advice on board, he said, “We know it’s under serious consideration in the 2024 budget process.”

Australian Treasurer Jim Chalmers and Resources Minister Madeleine King did not immediately respond to an emailed request for comment on the tax credit.

However, King said last month the production tax credit was under consideration, although she could not guarantee it would be enacted.

Companies that are building, or have said they would consider building value-adding plants include Pilbara Minerals, IGO and Mineral Resources. It is unclear whether any production tax credit could be used by companies like BHP that need to refurbish their operations.

The 2024 Federal Budget is expected to be handed down in May.