Australia to propose tax incentives for critical minerals
The proposed law will set up a tax incentive worth 10% of relevant processing and refining costs for 31 critical minerals.
Australian producers of battery metals hope to out-muscle China and become a key supplier to Korea for electric vehicles, they said on Tuesday after a meeting with South Korea’s president in Sydney.
The heads of aspiring metals miners met President Moon Jae-in during a visit in which Seoul and Canberra agreed to ensure supplies of Australian critical minerals exports for South Korea’s tech sector. The Asian country controls a third of the $46 billion market for electric vehicle batteries.
“Customers want to know where cobalt, indeed all their metals, are coming from and be given assurance it’s not coming from somewhere that’s unsustainable,” said Joe Kaderavek, head of cobalt developer Cobalt Blue Holdings Ltd, after meeting Moon.
“China’s been unable to give those assurances so it’s time to have a new supply chain.”
Stephen Grocott, managing director of Queensland Pacific Metals Ltd, which has offtake agreements for nickel and cobalt from South Korea’s POSCO and LG Chem Ltd , said Australian producers hoped to meet environmental credentials demanded by battery customers.
“China’s ESG (environmental, social and governance) credentials are slowly improving but they’ve got a long way to go, and frankly I struggle to see how Indonesian-Chinese production can go into the Western world and still meet customer and consumer expectations,” he said.
South Korea’s industry minister Moon Sung-wook said that closer mineral ties with Australia would curb reliance on China, ensure stable supplies and expedite progress for greener energy.
“Diversifying supply chains of key minerals is becoming an essential policy priority for our stable economic growth, as the reserves and production of some of them are concentrated on certain countries and bring concerns over instable supply and demand,” he told reporters.
A forum will be held next year to foster joint technology development, and the two countries’ exports credit agencies will sign a deal to facilitate trade insurance and project financing, Moon added.
In recent years, US allies have moved to reduce their dependence on China amid heightened concern about Beijing’s control over the critical minerals sector.
After China tightened exports in October of urea, used to cut diesel car and industrial emissions, South Korea had to ration supplies and banned its resale as panic buying by drivers deepened acute shortages that could bring transport and industry to a grinding halt.
South Korea needs critical mineral supplies, having pledged to become a battery manufacturing powerhouse by 2030 as part of a plan to be carbon-neutral by 2050.
Australia supplies 40% of South Korea’s critical mineral imports, which are crucial for many of the components needed to drive the world’s economies to net zero emissions.
Rare earths miner Australian Strategic Materials Ltd , which also attended the meeting with Moon, said it signed a cooperation deal with a South Korean government mining agency to supply critical minerals and metals.
(By Byron Kaye, Hyonhee Shin and Sameer Manekar; Editing by Subhranshu Sahu, Kenneth Maxwell and Susan Fenton)
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