Morrison backs ‘new energy economy’ with $2b billion fund

Scott Morrison will establish a loan facility to support Australia’s critical minerals sector in a bid to tap into what he says is one of the world’s largest recoverable reserves of the minerals used in advanced technologies. 

The Prime Minister issued a joint statement with Trade, Tourism and Investment minister Dan Tehan and Minister for Resources and Water Keith Pitt announcing the initiative on Tuesday. In the statement, Morrison said the fund would help projects get off the ground that would otherwise experience difficulty launching because of the “commercial dimensions of the critical minerals market”.

“We want to ensure that Australia’s resources producers do get established so they can link up with others in our supply chains in a free and open Indo-Pacific,” the Prime Minister said.

In June, The Mandarin reported on a new global resources statement produced by the Australian government to promote the local critical minerals sector to investors.

Advanced technologies such as renewable energy, aerospace, defence, automotive and electric vehicles all depend on critical minerals for essential product components. 

As the global demand for clean technology applications grows, the Australian government is hoping for the continued need for high powered magnets and batteries which use critical minerals to operate.

“Critical minerals are a strategic area for governments too because they are fundamental to the future energy economy,” Morrison said, referring to a projection that the critical minerals sector will grow exponentially over coming decades. 

“These projects also mean jobs in construction, infrastructure development and ongoing roles for the mining sector.”

Export Finance Australia has been chosen to manage the $2 billion fund and will report to the minister for trade, tourism and investment on its progress. The facility will operate on the National Interest Account for 10 years or until finance equivalent to $2 billion has been provided. 

Tehan said that investing in the sector to build Australia’s image as a reliable supplier of critical materials would boost more local jobs and businesses.

“Australian critical minerals will help other countries in the Indo-Pacific and beyond to accelerate their industrial reforms and transition to low-carbon technologies and that benefits Australia and our partners,” he said. 

Commenting on the future of the critical minerals sector, minister Pitt said that the global lithium industry was estimated to grow to be worth $400 billion by 2030.

“Initiatives like this will mean Australia is well placed to grab its share of the market,” he said.

According to Pitt, the new fund will make Australia a world-leader in the mining and downstream processing of in-demand resources. This comes on top of a $225 million government investment in an ‘exploring for the future fund’ to back new resources exploration across Australia. Establishing the local sector would be a boon for regional Australia, he added. 

“Australia is a leader in sustainable, ethical mining practices, and this investment will ensure we are providing the rare earths and other critical minerals that are essential to the supply chains of the new energy economy,” Pitt said.

The fund will be a signature initiative in the federal government’s wider plans outlined in the critical minerals strategy that Pitt has been charged with leading. 

This article was first published by The Mandarin.