NSW critical minerals strategy to attract clean energy investment

The NSW Government has announced it will create a $250 million royalty deferral initiative for critical minerals projects and will examine the implementation of a rapid assessment framework for minerals mining projects. The initiatives are the first actions of the NSW Government’s Critical Minerals and High-Tech Metals Strategy.

The government said that currently there are 12 critical minerals mining and processing projects in NSW that are ready for investment. They need around $7.6 billion in capital investment value and are expected to generate about 4600 jobs during construction and 2,700 ongoing jobs.

High initial investment costs for critical minerals projects are a barrier for the industry. The royalty deferral scheme is intended to assist new projects in the early stages of development, ease financial pressures, attract investment to NSW and enhance the economic viability of the sector.

Another immediate action from the strategy is a joint Department of Planning Housing and Infrastructure and NSW Resources assessment to deliver greater certainty to the sector around the planning process for critical minerals projects.

NSW has globally significant resource deposits and 21 of the 31 nationally declared critical minerals. The strategy identifies priority minerals and metals for NSW — including rare earths, scandium, cobalt, copper and silver — which have important uses in the electrification of the economy and the manufacturing of clean energy products like solar panels and batteries.

The strategy outlines the vital role of critical minerals in supporting broader government priorities, including in the clean energy transition and driving domestic manufacturing.

The International Energy Agency estimates that over the next 20 years, the world will need six times the amount of critical minerals currently mined to reach global net-zero carbon emissions. The energy transition will need double today’s copper production, triple today’s rare earth elements and cobalt production, and thirty times more nickel.

Fully realising the opportunity of the state’s critical minerals and high-tech metals deposits means moving further down the supply chain and beyond only extracting and exporting resources. Examples of this in the strategy include investigating opportunities to pilot common-user refineries and supporting investment in domestic manufacturing.

The royalty initiative will be an opt-in scheme where the first five years of royalties are deferred. It will apply to critical minerals projects that can start production between 1 July 2025 and 30 June 2030, predominantly mine commodities listed on the Commonwealth Government’s Critical Minerals List and where the proponent has a market capitalisation under $5 billion.

“Our vision for NSW is to be a global leader in critical minerals and high-tech metals, generating economic prosperity through exploration, mining, processing and advanced manufacturing,” said Minister for Natural Resources Courtney Houssos. “NSW critical minerals projects typically have long lead times for development, and higher capital investment. The new royalty deferral scheme will assist mine proponents to attract investment and move faster to production.”

The full Critical Minerals and High-Tech Metals Strategy, and a two-page summary of the strategy, can be viewed on the NSW Resources website at https://www.nsw.gov.au/criticalminerals.

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