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Australia’s Resources Minister Madeleine King said tax breaks for lithium and other critical minerals projects are ‘on the table’ after Tesla Chairman urged the country to offer tax credits to producers.
“Australia can be more than a ‘dig and ship’ nation,” Tesla chair Robyn Denholm told a conference in Canberra on Tuesday.
The executive mentioned the Inflation Reduction Act as a “proven mechanism” for delivering the necessary investment and suggested a tax credit of “less than 10%”.
On Wednesday, King said such tax breaks were a live policy option, the Financial Review reported.
“We know how useful the production credits are proving through the Inflation Reduction Act in the US,” said King. “That’s proven to be, and will be, an extraordinary policy for the US, driving clean and green technology development, as well as critical minerals partnerships. So, it’s certainly on the table.”
In June, Australia released a Critical Minerals Strategy, which includes a target of luring A$500 million ($320 million) in foreign funding for energy transition projects.
“The longer we wait, the greater risk we have of this opportunity passing us by as other countries – without necessarily as much underlying minerals – leapfrog us into capturing the most valuable parts of the battery supply chain,” said Denholm, an Australian.
Tesla has spent over A$4.3 billion on Australian minerals in 2023, more than triple the A$1.3 billion it spent in 2021.
Although Australia produces more than half the world’s lithium, the vast majority is shipped to China, which has a stranglehold on downstream processing into battery-grade chemicals. While three lithium refining projects are being developed in Australia now, the country needs 30 more to “compete on the world stage,” Denholm said.
(With files from Bloomberg)
