WA Chamber of Mines and Energy calls for urgent action to relieve ‘red tape’ on critical minerals industry

Despite being a world-leading lithium producer with millions being spent each year in the search for new reserves of the key battery metal, the Western Australian Chamber of Mines and Energy (CME) says “urgent action” needs to be taken if the state is not going to fall behind its rivals.

In a newly released “Critical Minerals Position Paper”, the CME says the state and federal governments have to make a series of policy and attitude changes to ensure WA takes advantage of its natural critical mineral riches.

The numbers are impressive

According to the WA Department of Jobs, Tourism, Science and Innovation, the state is by far the largest lithium supplier in the world, accounting for 54% of global supply in 2022, followed by Chile (27%).

The state also accounted for 100% of Australia’s lithium production in 2022.

In 2022, lithium carbonate equivalent supply from Western Australia rose 31% to 390,000 tonnes.

The value of the state’s battery and critical minerals sales rose 117% to $15.3 billion in 2021-22 and the WA battery and critical minerals industry contributed $363 million in royalties in 2021/22, an increase of 84% from 2020/21.

Currently WA’s battery and critical minerals are mainly exported to China, other markets in Asia (Japan, South Korea), Europe (Norway, Germany, Spain) and the United States.

It is estimated value of exploration expenditure for battery and critical minerals in Western Australia rose 55% to $673 million in 2021/22.

That number is expected to have jumped dramatically over the past 12 months thanks to the current lithium and rare earth element exploration “boom.”

Lithium is not the only battery metal that WA is a powerhouse in.

The state is the fifth largest nickel supplier in the world, accounting for 6% of global supply in 2021.

Western Australia accounted for 99% of Australia’s nickel production in 2021.

The state is also the third largest cobalt supplier in the world.

Red tape needs cutting

According to the CME paper, the pathway to net zero goes straight through Western Australia.

“Collaboration between all tiers of government is needed to address project development bottlenecks, enhance our state’s attractiveness as an investment destination, and fully realise WA’s potential in the global critical minerals supply chain.”

The CME has identified “red tape” as a major disincentive for “upstream” explorers and miners and potential “downstream” processors.

The Chamber also called for more openness in identifying local and international business opportunities which local miners may be able to take advantage of.

According to CME chief executive officer, Rebecca Tomkinson, Australia’s policy makers must make a number of important decisions to ensure the nation’s critical mineral assets play a key role in the global clean energy transition.

“Right now is the time to capitalise on the opportunities in front of us,” she said.

“The prospect of a rapid rise in demand for critical minerals poses questions about supply, with bodies like the International Energy Agency saying we are going to need a whole lot more mining of these commodities to support the deployment of solar panels, wind turbines and electric vehicles needed to meet the targets set by the Paris Agreement.”

Ms Tomkinson said recent global trade disruptions and geopolitical tensions have highlighted the critical need for stronger supply chain sovereignty.

“We are now seeing bilateral and multilateral trade frameworks aimed at diversifying supply sources of critical minerals and associated inputs to the advanced manufacturing process.”

She said to capitalise on the shared critical minerals ambitions of the state and the commonwealth, policy efforts should be focused on areas of WA’s competitive strength as a tier-1 mining jurisdiction.

Policy recommendations

The CME called on governments to address a number of challenges and made a series of recommendations it believes will help remove the hand brake slowing down the development of WA’s critical minerals capabilities.

These include action by government to identify and communicate market opportunities flowing from the incentives and legislation in other jurisdictions and addressing cost competitiveness for capital investments through measures such as grants and tax incentives.

The CME also suggested there needs to be a continuing focus on Australia’s areas of competitive strength, with policies put in place that recognise the importance of upstream supply to the nation’s downstream ambitions.

“Western Australia is already a world leading jurisdiction for the upstream production of critical and battery minerals globally, a factor that will continue to increase in importance to our nation’s trade partners,” Ms Tomkinson said.

“But Australia is a high-cost environment by international comparison and State and Federal policy initiatives supporting the further development of the sector fall short of the scale on offer in jurisdictions such as Europe and the United States of America.”

“Globally, the investment landscape is competitive and within Australia, regulatory uncertainty, delays and costs associated with project development continue to weigh on the viability of critical mineral operations – from new project development to expansion of existing assets.”

According to the CME, WA has an enormous opportunity to have a world-leading, sustainable, value-adding critical minerals sector, but the window to capitalise on global critical minerals demands to unlock the state’s potential as a major participant in the supply chain is narrow.

“WA is already a critical minerals powerhouse; we host almost all the commodities on Australia’s critical minerals list, as well as others that will support the global energy transition, but it is clear that several challenges remain and success is not guaranteed.”

“To capitalise on the potential share of economic value to be captured domestically, a continued commitment to both sustainable, competitive upstream raw materials production and downstream processing infrastructure is crucial,” Ms Tomkinson said.