The Association of Mining and Exploration Companies (AMEC) led a delegation of mining and energy companies yesterday that focused on progressing discussions of a production tax credit (PTC) with the Federal Government.
The PTC would see miners receive 10 per cent off their tax bill for the production of refined critical mineral products. It is inspired by a similar US Government scheme introduced through the Inflation Reduction Act (IRA).
The IRA is considered to be the largest climate investment in US history. The legislation encourages innovation by giving firms various demand- and supply-side incentives to invest in developing and deploying clean energy technologies, while helping the country transition to net-zero.
AMEC engaged Mandala Partners last year to economically model the introduction of an IRA-style PTC into Australia.
The consulting firm concluded that a 10 per cent tax credit for downstream materials producers would reduce the production cost disadvantage faced by Australian projects compared to the US.
Companies that engaged in yesterday’s discussions included IGO, Australian Vanadium, QEM, Pilbara Minerals, Tesla and Wyloo Metals, with the latter’s chief executive officer Luca Giacovazzi previously voicing support for the PTC.
“(Yesterday’s) meetings provided an opportunity to relay the real struggles facing the industry at the moment,” AMEC chief executive officer Warren Pearce said.
“It also sends a strong message to the Federal Government that the time for action is now. The upcoming Federal Budget provides (the) Treasury with a lever to pull that will reinvigorate the critical minerals sector and help Australia compete further downstream.”
Alongside the discussions, AMEC has released a report, ‘Production Tax Credit for value-add processing of Australia’s critical minerals’, which details how implementing a PTC will enable Australia to go from having critical minerals strategies to delivering them through the creation of thousands of new jobs and a high-value industry for the country.
“The PTC report focuses on what Australia can do to compete with nations that are moving the dial on incentives,” Pearce said.
“A PTC could help other minerals required to pull the supply chain puzzle together; Lithium, rare earths, vanadium, graphite, cobalt and many more – who without support, simply can’t compete on a global scale to pursue new projects and set Australia up for the energy transition.
“If Australia truly wants to seize the opportunity of the global energy transition, of which the critical minerals industry is the backbone, then a PTC is an important part of the answer.”
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