Australia’s critical minerals will drive the United States’ electric vehicle battery program following the announcement by the US to grant Australia preferred status.
The Inflation Reduction Act is a major step forward for the Australian Government’s manufacturing agenda and will help underpin the demand for high quality Australian battery minerals.
Under the Act, 40 per cent of the value of the critical minerals in the battery must be sourced from a country that has a free-trade agreement with the United States, increasing to 80 per cent by 2027.
Driving investment in local processing and manufacturing will also ensure the demand for Australian mined minerals including lithium, cobalt, nickel and copper.
Importantly, it will also strengthen the case for investment capital into mining.
Australian mining needs about $20 billion per year to sustain current production.
If we are going to increase the capacity of existing mines, or open new mines – including in the commodities needed for our global transition to net zero emissions – capital investment will need to be increased by an order of magnitude.
The Bank of America estimates that US$150 billion per year will be needed in global mining to produce the minerals needed to achieve the global transition to net zero.
Australia needs to position itself as a competitive destination for this capital in order to realise its full potential.
