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Mining sector fuels federal budget surplus, spurs critical minerals initiative

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By Colin Hay - 
2024 Federal budget mining industry critical minerals

Australia’s mining industry has been recognised as key to the federal government achieving its second consecutive budget surplus.

Minerals Council of Australia (MCA) Chief Executive Officer Tania Constable says the 2024-25 Federal Budget has once again highlighted the significance of mining to the Australian economy.

“Tonight’s budget surplus is a direct result of the robust contributions from the mining industry,” Ms Constable said in a media statement following the budget release.

“The mining industry contributed over half of all the company tax collected from large companies and continues to play a crucial role in funding the government services we all rely on.”

Critical minerals a big winner

The MCA has welcomed news that the 2024-25 budget is providing significant support for the further development of Australia’s rich endowment in critical minerals.

The budget announcement included the addition of a 10% production tax credit totalling $7 billion over the decade for all 31 critical minerals to drive critical minerals processing in Australia.

The government is also allocating $10.2 million for pre-feasibility studies to develop critical mineral common-user processing facilities to enhance Australia’s capacity to process critical minerals sovereign capability and economic resilience and $5.8m for a critical minerals trade enhancement initiative.

WA backs plans

Elsewhere, the Western Australian government has welcomed the almost $20b in funding support for critical minerals processing and resource exploration announced in the budget.

“I congratulate the federal government for its foresight and vision in assisting WA in becoming a world leader in the downstream processing of critical minerals and the production of renewable hydrogen which will be essential in transitioning the globe to a low-carbon economy,” Premier Roger Cook said.

“These commitments represent a big vote of confidence in the future of WA’s powerhouse resources sector and acknowledge its ongoing importance to the national economy.”

“I welcome the inclusion of all 31 critical minerals as qualifying for a production tax credit, which is something that industry has been calling for.”

More needed

While welcoming the production tax credits and other measures, Ms Constable says more needs to be done.

In light of the treasurer’s warning about global uncertainty shaping this budget and noting that the critical minerals credits will have no immediate impact on the budget, the MCA will continue to work with the government and treasury to better understand the long-term benefits this policy could offer.

“At a time when Australia grapples with decaying productivity and looming long-term structural fiscal deficits, the government is imposing regressive policies on the sector that dampen the investment growth critical to achieving our economic potential.”

“Unfortunately, this budget only scratches the surface of what is needed to ensure the Australian minerals industry remains competitive.”

Exploration investment

The budget has also acknowledged that exploration is crucial to ensuring the future of Australia’s resources sector.

The government’s Future Made in Australia program will include a $566.1m payment over ten years from 2024-25 for investment in a new Resourcing Australia’s Prosperity program.

To be run by Geoscience Australia, Resourcing Australia’s Prosperity will progressively map Australia’s highly prospective regions critical minerals, groundwater and resources needed for the transition to net zero.

The government has also allocated $448.7m over 11 years to continue an ongoing partnership of nearly 50 years with the US Geological Survey in the Landsat Next satellite project.

It says this project will map the changing surface of the Earth and support mining exploration.