The Australian government introduced the Critical Minerals Production Tax Incentive (CMPTI) to Parliament, marking a significant milestone in the nation’s efforts to establish itself as a global leader in the critical minerals sector.
Industry stakeholders, including the Association of Mining and Exploration Companies (AMEC), have expressed strong support for the legislation, emphasizing its potential to transform Australia’s critical minerals industry. AMEC CEO Warren Pearce highlighted that the initiative represents a strategic shift, moving beyond Australia’s historical role as a raw material exporter. “Australia is already so much more than a ‘dig and ship’ country, and this legislation seeks to build on that principle,” Pearce said. “The opportunity is now, and the CMPTI is seizing that opportunity.”
The CMPTI aims to stimulate downstream processing by offering companies a 10% tax credit for investments in value-added mineral products. This A$7-billion initiative, spanning ten years, will cover 31 critical minerals, including lithium, rare earths and others essential for clean energy technologies. Pearce emphasized that the policy would boost confidence in the growing sector, attracting both markets and investors.
Additionally, the bill introduces the Hydrogen Production Tax Incentive, offering a $2/kg incentive for renewable hydrogen produced between 2027/28 and 2039/40, further supporting Australia’s clean energy transition.
“This Bill needs to pass Parliament. It’s time for all parties to stand up and back Australian industries and support this incentive,” Pearce urged, underscoring the importance of securing a competitive edge in the global energy transition.
The policy is designed to be a zero-risk proposition for taxpayers: companies will only receive the tax credit if they succeed in producing value-added products. Pearce explained that the benefits of stimulating Australia’s critical minerals sector will far outweigh the incentive costs, creating long-term economic growth and job opportunities.
While the uptake of the incentive may be modest at first, AMEC expects it to grow over time, establishing a solid foundation for the sector’s global competitiveness. Pearce pointed to mining hubs like Western Australia and Queensland, which are likely to see significant benefits from the initiative.
Rebecca Tomkinson, CEO of the Chamber of Minerals and Energy of Western Australia, acknowledged the importance of the tax incentives but emphasized that further steps were needed to ensure Australia remains competitive. “WA is competing against jurisdictions that are rolling out the red carpet for downstream processing, including fast-tracked project assessments and financial assistance,” she noted. She also highlighted the need for affordable, low-emission energy sources to support value-added industries.
Tomkinson called for a comprehensive approach, with both state and federal policies aligned to support the resources sector as it adapts to the net-zero transition and global competition.
