Tax incentives one piece of the puzzle

The Chamber of Minerals and Energy WA (CME) welcomes the introduction to Parliament of the Federal Government’s Future Made in Australia Bill, which provides substantial incentives for critical minerals processing and hydrogen production.

CME chief executive officer Rebecca Tomkinson says timely passage of the legislation would implement two key budget announcements from earlier this year aimed at capturing more investment to support strategic industries.

“Australia’s resources, including our critical minerals, have a key role to play in the energy transition,” she said.

“This measure recognises the Federal Government’s commitment to supporting industry to level the playing field in what is an intensely competitive global market.

“Passage of the legislation would set an important investment signal for further value adding activities and provide certainty to industry.”

The Bill aims to establish a Hydrogen Production Tax Incentive worth $2/kg of renewable hydrogen produced between 2027-28 and 2039-40 for up to 10 years per project.

It would also establish a Critical Minerals Production Tax Incentive worth 10% of processing and refining costs for designated critical minerals refined between 2027-28 and 2039-40, again for up to 10 years per project.

Ms Tomkinson says the significant incentives are important but represent one part of a much broader puzzle.

“WA is competing against jurisdictions that are rolling out the red carpet for downstream processing, including through fast-tracked project assessments, financial assistance and the provision of turnkey industrial land,” she said.

“Access to low-emission, reliable and internationally competitive energy prices are another important factor for businesses determining the best location for value-adding industry.

“It is therefore vital that government support extends beyond production tax credits.

“To capitalise on opportunities presented by the net zero transition, it is more important than ever that both State and Federal policy settings are aligned in support of the resources sector.”

Ardea Resources (ASX: ARL) managing director and chief executive Andrew Penkethman says the Federal Government’s support for the Australian resources sector through initiatives such as the Production Tax Incentive, will assist the company in being even more cost competitive with its global peers.

“Ardea is advancing the Kalgoorlie nickel project — Goongarrie Hub definitive feasibility study to support the development of a large-scale, long-life nickel-cobalt operation which based on the July 5, 2023, pre-feasibility study, will produce an average of 30,000t of nickel and 2,000t of cobalt for 40 years,” he said.

“Projects of this scale are rare and provide the opportunity to operate throughout several commodity price cycles producing nickel-cobalt with high ESG standards to provide critical minerals to help power the energy transition.

“Australia needs a united front for the resources sector to continue to thrive and to be able to keep contributing to the Australian economy for the benefit of the entire nation.

“Initiatives such as the Production Tax Incentive will assist the Australian resources sector and in turn will help create new job opportunities in the communities within which these critical mineral projects are located and provide positive social and economic flow on effects.”