AMEC continues push for Australian production tax credit

The Association of Mining and Exploration Companies (AMEC) led a delegation of companies to Canberra as it continues to press the Federal Government for a production tax credit (PTC).  

The delegation included representatives from mining and exploration companies crucial to the critical minerals sector, such as Wyloo Metals, IGO, Australian Vanadium, QEM, Pilbara Minerals, and Tesla.  

AMEC chief executive Warren Pearce says the meetings provided “an opportunity to relay the real struggles facing the industry at the moment”.  

“It also sends a strong message to the Federal Government that the time for action is now.  

“The upcoming Federal Budget provides Treasury with a lever to pull that will reinvigorate the critical minerals sector and help Australia compete further downstream.  

“If Australia wants to be more than a dig and ship country, now is the time to provide incentives required for the energy transition vision.” 

In 2023, AMEC engaged Mandala Partners to economically model the introduction of an US Inflation Reduction Act (IRA) style PTC into Australia.  

It concluded that a 10% tax credit for downstream materials producers would reduce the production cost disadvantage faced by Australian projects compared to the USA.  

AMEC says the implementation of a PTC is a part of a future where Australia goes from having critical minerals strategies, to delivering on them, creating thousands of new job and a new high value industry for Australia.  

Across the globe, there have been over 1500 different incentive programs aimed at securing a piece of the critical minerals supply chain.  

The United States’ IRA is the most notable, with a trillion dollar package of incentives to motivate companies to setup downstream processing onshore.  

“Australia has no monopoly on success,” Mr Pearce said.  

“Just because we have the minerals in the ground doesn’t mean we are guaranteed to get the investment needed to find, mine and add value to them.  

“Right now, these are some of the hard truths that need to be recognised: Australia has lengthy approvals timeframes, is an expensive place to do business and is seeing investment lured overseas by global incentives such as the IRA.  

“The PTC Report focuses on what Australia can do to compete with nations that are moving the dial on incentives.”  

Mr Pearce says nickel is a canary for the critical minerals sector, adding to the thousands of local jobs already lost and the potential for more to follow, the industry faces the risk that new critical minerals value adding projects in Australia will simply not happen because competitors have moved first and protected their local production.  

AMEC says a PTC could help boost production of other minerals required to pull the supply chain puzzle together, including lithium, rare earths, vanadium, graphite, cobalt, and many more.