Government support for critical minerals industry escalates

By Igor Bogdanich, Bryn Hardcastle, George Salter, William Conti
Climate Change Critical Minerals Dealmakers & Investors Mining

Recent announcements by WA and Federal Governments to support critical minerals development 7 min read

The WA and Federal Governments have recently announced significant funding and regulatory support packages to accelerate the development of Western Australia into a critical minerals powerhouse. Both state and federal packages target midstream processing in an effort to capture more value onshore, and leverage WA's natural resources to develop a pit-to-plant critical minerals industry within the state.

This Insight provides an overview of the key features of both:

  • Western Australia’s Battery and Critical Minerals Strategy 2024-2030, as published on 22 May 2024 (WA Strategy);1 and
  • support for the critical minerals industry in the recent Federal Budget.2

Pit-to-plant: key features of the WA Strategy


The WA Government's vision, as set out in the WA Strategy, is to establish an 'internationally competitive, ethical and value-adding battery and critical minerals industry'. Delivering on this vision involves targeting two key areas:

  • upstream production of critical minerals: through ongoing support for WA's exploration and mining capabilities; and
  • midstream processing capability: through capturing a growing share of the midstream processing market (eg the refining and processing of critical minerals, including the manufacturing of battery chemicals and active materials).

Downstream processing (eg battery manufacturing) is also included as a 'target opportunity' in the WA Strategy. However, this appears more aspirational than an area of key focus and commitment of resources. This is, in part, due to intense international competition in this area and the challenges WA (and Australia more generally) has in being cost-competitive in downstream manufacturing compared to other lower costs jurisdictions internationally.

While it appears the door remains 'open' to downstream processing from a policy perspective, it is encouraging to see the WA Strategy identifies, and prioritises, the upstream and midstream elements of the battery mineral value chain where WA has a natural competitive advantage (at least insofar as the upstream sector is concerned).

Can it deliver certainty and stability to industry?

Success in developing WA's critical minerals industry, including capturing an increased share of the midstream processing market, will in part be dependent on WA's ability to provide a stable, cost-competitive and ultimately sponsor-friendly environment for developing and operating these projects. The key concerns for sponsors looking to develop critical minerals projects (both upstream and midstream) include:

  • energy security (both in terms of supply certainty and the cost of procuring electricity either from existing networks or through remote generation);
  • access to infrastructure (including the ability to access common user infrastructure to lower capital costs for the project);
  • regulatory approvals (timelines, bottlenecks, stability); and
  • Traditional Owner engagement.

In a positive sign for industry, these key topics are identified (directly or indirectly) as part of the six focus areas that will guide the WA Government's policy decisions through to 2030:

  • Unlocking investment in enabling infrastructure and project-ready land.
  • Accelerating research and skills development.
  • Attracting investment through strategic partnerships and incentives.
  • Ensuring robust and efficient ESG frameworks.
  • Engaging with, and sharing benefits with, Traditional Owners and communities.
  • Continuing to support strategically important projects.

In addition, the WA Strategy has identified the following as key priorities in the near term (2024-2026):

  • Implementation of robust and more efficient approvals systems.
  • Planning and investment in common user infrastructure.
  • Providing targeted financial support for strategically important projects or industries.

These focus areas and key priorities are certainly front of mind for industry, and the ability of the WA Government to follow through and implement necessary reforms and deliver investment in these areas will be key to delivering on WA's potential as a critical minerals powerhouse.

While the WA Strategy is a welcome addition to the critical minerals policy landscape, industry will be looking for tangible support from the state government to take full advantage of the opportunity that presents itself for WA. Industry participants have long bemoaned the time frames for approvals and projects to come to fruition, while recognising the need to have ESG as a guiding light. Time will tell whether the WA Government's policy pronouncements become regulation and direction.

Critical minerals and the Federal Budget

The critical minerals industry was among the substantial winners in the recent Federal Budget, with the Government committing an estimated $7.1 billion over 11 years from 2023/24 to support the refining and processing of critical minerals. Some of the key funding commitments to the critical minerals industry coming out of the Federal Budget are summarised below.

Critical Minerals Production Tax Incentive

The headline announcement for the critical minerals industry was the introduction of a Critical Minerals Production Tax Incentive to support onshore downstream refining and processing of Australia's critical minerals. The incentive will provide a 10% refundable tax offset for eligible costs of processing critical minerals in Australia and will be available from 2027/28 to 2040/41.

The support is intended to provide critical minerals projects with a cash incentive to incur the eligible processing costs that might otherwise be incurred overseas. To access the incentive, a project must take its final investment decision (FID) by 2030, with the incentive applying for up to 10 years per project.

Industry players will be waiting for more information to emerge in relation to the Critical Minerals Production Tax Incentive which has, to date, been relatively short of detail.

Other support for the critical and battery minerals industry

Other notable announcements from the Federal Budget include:

  • $1.2 billion investment in priority critical minerals projects, including under the Critical Minerals Facility and through the Northern Australia Infrastructure Facility.
  • $566.1 million to support Geoscience Australia in mapping out Australia's critical minerals, strategic materials, groundwater and other resources essential for the transition to net zero.
  • $10.2 million in 2024/25 to establish the Critical Minerals National Productivity Initiative, to work with state and territory governments to develop pre-feasibility studies for critical mineral common-user processing facilities.
  • $523.2 million over seven years from 2024/25 to establish the Battery Breakthrough Initiative, promoting the development of battery manufacturing capabilities through production incentives.
  • $20.3 million over five years from 2023/24 for industry and research collaboration, including workforce training for battery research, manufacturing, transport and recycling.
  • $5.6 million in 2024/25 to support the Australian Made Battery Manufacturing Precinct to drive battery manufacturing in Australia.

What to expect next?

The recent announcements by the WA and Federal Governments are significant, and provide a clear statement of support at both a state and federal level for the development of WA's critical minerals industry. Other state governments have also been outwardly supportive of their critical minerals industry (see our Insight: Queensland's new critical minerals strategy unveiled).

However, as with all policy, implementation will be key, and industry will need to digest whether this support suffices to offset the rising costs and regulatory bottlenecks currently impacting the critical minerals industry (and the energy and resources industry more broadly) in WA. This is a key factor for the energy transition, too, given the path to net zero is paved with critical minerals: Critical minerals list expands and new strategic materials list.


  1. 'Western Australia's Battery and Critical Mineral Strategy 2024-30', available here.

  2. 'Budget 2024-25', available here.