Australian Government provides $243m to aid key domestic critical mineral projects
China accounts for up to 80% of all global critical mineral production.
Australia’s critical minerals sector looks set to receive a major boost with a $243 million initiative from the Federal Government announced this week.
Prime Minister Scott Morrison said the government’s initiative is designed to address China’s current market dominance of 70-80% of global critical minerals production and “hold” over these supply chains.
“The world is becoming a more uncertain place and we want to secure Australia as a reliable partner for local and global businesses that need the critical minerals we have right here,” Mr Morrison said.
In the midst of the Ukraine-Russia crisis, China has continued to capture the world’s supply of critical metals globally by refining these minerals cheaply, often to the detriment of the environment so the additional funds for projects such as these are timely.
Australia has significant volumes of critical minerals in the ground with no historical production capacity, but as a result of the government’s push, domestic companies will now have the opportunity to build facilities locally.
Arafura Resources
Under the Federal Government $243 million funding boost, Arafura Resources (ASX: ARU) will receive $30 million to go towards a separation plant at its Nolan’s project that will be just the second of its kind in the world, outside of China.
The plant will reside in Aileron, Central Australia and Arafura managing director Gavin Lockyer says the sky’s the limit in terms of investing in rare earth projects such as theirs.
“Rare earths are critical to the manufacture of electric vehicles and wind turbines, with demand growth forecast to be exponential in coming decades.”
“Australia has a window of opportunity to invest in strategically important rare earths projects such as Nolan’s and maximise the local jobs and investment benefits of the clean energy revolution,” he said.
Sitting at a current share price of $0.235 – up 20% for the week, the future of Arafura is promising with its Nolan’s project set to pave the way for future rare earth projects.
Poseidon Nickel
Poseidon Nickel (ASX: POS) has partnered with Pure Battery Technologies to construct an integrated nickel manganese cobalt battery refinery hub in the Kalgoorlie region of Western Australia.
Poseidon is a nickel-focused exploration and development company which sits on a resource base of around 400,000 tonnes of nickel and 180,000 ounces of gold.
The Federal Government has allocated $119.6 million of the $243 million funding towards this project, which is expected to create 380 construction jobs and a 175 initial permanent jobs from 2023.
Pure Battery Technologies managing director and chief executive officer Bjorn Zikarsky says the investment will help put Australia on the map.
“The facility will have the capacity to double its production within five years of being operational and will place Australia at the forefront of sustainable, environmentally-sound refining practices,” he said.
The Hub will also be the first of its kind in Australia.
Australian Vanadium
Australian Vanadium (ASX: AVL) has risen about 40% this week after the company’s project received $49 million from the government.
The funds will go towards processing high-grade vanadium from a Western Australian mine in Meekatharra and delivering it to a plant powered by clean hydrogen.
Australian Vanadium’s managing director Vincent Algar says the grant is significant for the company and it will allow for future opportunities.
“We look forward to working with our partners to bring the Australian Vanadium project into production and further develop downstream opportunities for green steel and the vanadium redox flow battery market,” he said.
After reaching the plant, the mineral will be made into energy-storing batteries to supply to the growing domestic and overseas markets.
The project aims to kick-start an Australian green fuelled vanadium industry.
Alpha HPA and Orica
Of the $243 million funding, $45 million is set to benefit Alpha HPA (ASX: A4N) and Orica (ASX: ORI) through a partnership to create a high purity alumina facility.
The project aims to supply high purity aluminium materials to de-carbonising industries of LED Lighting and eMobility.
Orica’s managing director and chief executive officer Sanjeev Gandhi says the boost enables the project to go ahead, which will reap extreme environmental benefits.
“As we continue to transition to a lower carbon economy, private-public collaboration will be critical in allowing us to forge a pathway towards decarbonisation,” he says.
In light of the news, Alpha HPA stock price has risen 11.48% for the week to last trade at $0.602.
Orica’s share price of $15.29 is 8% higher for the week.
Economic benefits
The government funding is also expected to benefit the local economy with potential future export opportunities resulting from the projects.
Federal Minister for Industry, Energy and Emissions Reduction Angus Taylor says the news is significant for the Australian economy.
“These projects are not only game-changers for the local region with the creation of new jobs, they will also open up incredible export opportunities.”
He said the projects will help Australia capture even more of the global supply chain.