Govt establishes A$2bn critical minerals loan facility

Prime Minister Scott Morrison said the fund would help fill finance gaps in critical mineral resource developments to get them off the ground and would help secure the vital supplies of resources needed to drive the new energy economy and support the resources jobs of the future.

“The commercial dimensions of the critical minerals market mean it is a difficult place to get established. We want to ensure that Australia’s resources producers do get established so they can link up with others in our supply chains in a free and open Indo-Pacific,” the Prime Minister said.

“Critical minerals are a strategic area for governments too because they are fundamental to the future energy economy. These projects also mean jobs in construction, infrastructure development and ongoing roles for the mining sector.”

Australia has among the world’s largest recoverable reserves of the critical minerals used in advanced technologies, such as renewable energy, aerospace, defence, automotive and electric vehicles in particular, telecommunications and agri-tech.

Minister for Trade, Tourism and Investment Dan Tehan said Australia was well placed to become a reliable supplier of critical minerals to ensure supply in its region and support jobs and businesses in Australia.

“The global growth in demand for critical minerals to be used in the production of the latest technologies represents an incredible opportunity for Australia to utilise its natural resources and world-leading mining know-how to become a leader in the extraction, processing and supply of critical minerals,” Tehan said.

“Australian critical minerals will help other countries in the Indo-Pacific and beyond to accelerate their industrial reforms and transition to low-carbon technologies and that benefits Australia and our partners.”

Minister for Resources and Water Keith Pitt said the government’s new A$2-billion Critical Minerals Facility would ensure Australia remains at the forefront of emerging new opportunities in the global resources sector.

“Australia is already among the world’s top suppliers of some of the world’s most sought-after critical minerals and we know there is enormous potential through our untapped reserves,” Pitt said.

“The lithium industry alone, which is essential to develop new battery technology, is forecast to be worth A$400-billion globally by 2030 and initiatives like this will mean Australia is well placed to grab its share of the market.

“The new facility comes on top of other initiatives like the government’s A$225-million Exploring for the Future Fund to support new resources exploration across the country.”

The A$2-billion Critical Minerals Facility will be managed by Export Finance Australia and report to Tehan. It will operate on the National Interest Account for ten years or until finance equivalent to A$2-billion has been provided. The new facility will be an important pillar of the government’s overarching Critical Minerals Strategy being led by Pitt.

The Association of Mining and Exploration Companies has welcomed the funding commitment, with CEO Warren Pearce saying it showed the government was serious about developing the critical minerals industry.

“It will help develop critical mineral projects needed to supply the demand from emerging technologies, Australia’s export partners and to provide the minerals needed for the rapidly growing renewable energy industry.

“Continuing the trend of the last few years, a large focus of investment interest is in growing renewable sources of energy, particularly those offered by Australia’s vast critical minerals potential.

“Federal government providing large, low-interest loans as a cornerstone investment is one of the best ways to help companies secure the balance of the funding they need to get projects off the ground,” Pearce said.

“This fund will help the development of new mines and demonstrates the commitment of the federal government to advance its critical minerals industry, resulting in increased employment, increased local investment, and greater diversification of Australia’s economy.”