Liontown Resources, Lynas Rare Earths and Wyloo give Federal Labor’s production tax relief the thumbs-up

Three miners of three different future-facing commodities at different stages of the minerals processing chain are all supportive of the government’s production tax credit policy. On Tuesday the government handed down its Federal Budget which included $17.6 billion of production tax credits for producers of critical minerals, split between $7.1b from now until the 2034 financial year, and then another $10.6b until 2041. The Albanese Government will give producers of designated critical minerals, which includes nickel, lithium and rare-earth elements, a 10 per cent tax credit per year for up to 10 years per project. The credits will only kick in from July 2027, despite WA’s nickel industry facing significant woes now. Andrew Forrest’s Wyloo is set to put its nickel mines on care and maintenance at the end of this month amid a commodity price pinch, but chief executive Luca Giacovazzi was still supportive of the government measures. “(The) Federal Budget acknowledges the significance of our critical minerals sector in Australia becoming a clean energy superpower,” he said. “We welcome the inclusion of a critical minerals production tax Incentive for downstream value-adding, as well as measures to engage with our global partners to support the fair trade of high-quality and sustainable minerals. “Measures like the tax incentive will support Australia’s global competitiveness, shore up local supply chains and build a generational opportunity for our mining industry to expand as part of the energy transition.” Tony Ottaviano, the chief executive of lithium aspirant Liontown Resources, also welcomed the tax credit. “Liontown welcomes the strong intent and initial targeted measures announced in the budget,” he said. “Expanding Australia’s critical minerals capacity and encouraging new downstream investment is absolutely in the national interest, and we commend Resources Minister Madeleine King for championing this goal.” Down the track Liontown aims to make the move into downstream processing but its immediate priority is bringing the Kathleen Valley lithium project into production by mid this year. Rare earths producer Lyans was also pleased with the incentive but said more needs to be done on the infrastructure front. “’The development of a critical minerals industry in Australia will require different support at different stages,” chief executive Amanda Lacaze said. “We welcome the announcement of a production tax credit as one tool to support downstream processing in Australia. “We also encourage the government to invest in common user infrastructure which addresses those areas where Australia incurs a cost disadvantage, such as energy and logistics, and to focus on improving approval processes to ensure timely development of projects.’’ Lynas has a cracking and leaching plant near Kalgoorlie and also stands to benefit from a suite of new tariffs on Chinese imports into the US announced overnight. The company is looking to build a plant in Texas.