Australia to boost critical minerals sector in upcoming budget

Australia is gearing up for a significant boost to its critical minerals industry in its upcoming budget, with Treasurer Jim Chalmers labeling it a “golden opportunity” in an interview with Bloomberg.

Emphasising the need to attract both global and domestic investments, Chalmers aims to strike a balance between addressing inflation and fostering economic growth.

The critical minerals sector is pivotal in Australia’s strategy to tap into the global shift towards green energy, particularly in supplying battery minerals to reduce reliance on Chinese sources for solar panels and electric vehicles.

At the core of the budget is the “Future Made in Australia” programme, akin to the US’s Inflation Reduction Act, designed to stimulate high-tech and green manufacturing.

While specifics remain undisclosed, Chalmers hinted at a mix of tax incentives, grants, and structural adjustments to mobilise private investments. Unlike the US’s heavy government expenditure, Australia’s approach prioritises augmenting private investment.

Australia’s strengths in resources, industrial base, and skilled workforce are highlighted by Chalmers as factors attracting investment. The government has already allocated significant funds for resource exploration, with more support likely in the pipeline. Despite anticipated consecutive surpluses, concerns linger over China’s economic outlook, prompting efforts to diversify trade relationships, particularly towards the growing markets in the Association of Southeast Asian Nations (ASEAN) region.