The rhetoric on the potential of critical minerals has yet to match reality. Tesla chairman Robyn Denholm has an answer, but will the government listen?
The small town of Seadrift on the Texas gulf coast is little known outside the US, but it’s about to be the home of the onlyThe Biden administration has given Australian company Lynas Rare Earths a grant of $US258 million to pay for construction and ensure the material from the company’s Mt Weld mine in Western Australia can be refined in the US.
But despite Australia’s abundance of critical minerals, including rare earths, the country struggles with multi-year delays in approvals for new mines – let alone having companies see the business case for going further into processing or even green manufacturing at scale.In its last days, the Morrison government did provide a $1.25 billion loan to Iluka Resources to build a refinery at Eneabba in WA to separate rare earth oxides out of tailings from mineral sands operations.
Instead, the government seems to be relying more on Australian companies’ eventual access to subsidised US investment and markets through agreements like the climate, critical minerals and clean energy transformation compact signed between the US and Australia last May. “It’s as if we think we can click our heels three times and all of a sudden we are transported to a critical minerals future,” says one company executive.To get there will require – at a minimum – reliable and cheap supplies of energy, more focused infrastructure, new workforce skills and chemical processing technology, and a more efficient system of approvals given the need to manoeuvre through complicated, overlapping state and federal environmental processes.
“We can provide the spodumene and the ore. But we can also provide the concentrates, the reagents, the battery-grade fine particles, the precursors, the cathodes and much more. To do so we need to act boldly and swiftly.“The longer we wait, the greater we risk the opportunity passing us by as other countries, without necessarily as much of the underlying materials, leapfrog us into capturing the most valuable parts of the battery supply chain.
According to Denholm, production tax credits are a proven mechanism by providing a discount on value adding operational costs via a corresponding tax rebate. Their use has been reinvigorated in the US by the Inflation Reduction Act.
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