Release of NSW Government’s Critical Minerals Strategy
The NSW Government has just taken a significant step forward to boost its critical minerals sector.
On 18 October 2024, the Government launched an initiative to drive growth and investment in this key industry, unveiling a $250 million royalty deferral initiative and a rapid assessment framework for mining projects. This strategic move aims to position NSW as a global leader in the development of critical minerals, leveraging its abundant resources to fuel clean energy transitions and domestic manufacturing.
The initiative is part of the NSW Government’s Critical Minerals and High-Tech Metals Strategy 2024-2035 (Strategy), which focuses on five key pillars:
- Encouraging exploration;
- Incentivising production;
- Developing future-ready skills in local communities;
- Establishing supply chains; and
- Engaging communities.
These pillars are designed to reduce investment risks, create an attractive investment environment and ensure responsible mining practices.
Royalty deferral scheme
The scheme will operate as an opt-in program, allowing for the deferral of royalties for the first five years. This program will be applicable to critical minerals projects that commence production between 1 July 2025 and 30 June 2030. It will primarily focus on mining commodities listed in the Commonwealth Government’s Critical Minerals List and will be limited to proponents with a market capitalisation of less than $5 billion.
NSW is poised for significant growth in the critical minerals sector, with 12 critical minerals mining and processing projects needing $7.6 billion in capital investment value. These projects are expected to create 4,600 construction jobs and 2,700 ongoing positions. To overcome the industry’s challenge of high initial investment costs, the scheme aims to provide vital financial relief to new projects in their developmental stages. By easing cash flow pressures and attracting investment, the scheme aims to stimulate industry growth, solidify NSW’s position as a leading destination for critical minerals investment, and to drive economic sustainability.
Quicker approvals
As part of the Strategy, the NSW Government is streamlining critical minerals project approvals through the Rapid Assessment Framework, a joint initiative with the Department of Planning, Housing and Infrastructure and NSW Resources. This collaborative effort aims to provide greater clarity and certainty around the planning process for critical minerals projects, making it easier for investors and developers to navigate the system.
By combining their expertise, these two departments can accelerate the evaluation process, reduce regulatory bottlenecks, and enable swift project development. The joint assessment will likely consider various factors, including environmental impact, social implications, and economic benefits. This integrated approach will ensure that projects are thoroughly evaluated, and approvals are granted in a timely manner.
Focusing efforts on priority metals
NSW is rich in critical minerals: out of the 31 minerals identified as critical at a national level, 21 are located within the state of NSW. To maximise this potential, the Strategy focuses on specific priority minerals and metals essential for the clean energy transition and manufacturing eco-friendly products, such as rare earths, scandium, cobalt, copper and silver. These minerals are vital for producing solar panels, wind turbines, rechargeable batteries and other advanced technologies.
As the International Energy Agency warns of a six-fold increase in critical mineral demand over the next two decades, NSW’s proactive stance is timely and visionary. By capitalising on its abundant resources, NSW is ready to become a leading destination for critical minerals investment, driving economic sustainability and supporting Australia’s growth.
Next steps
To learn more about how you can capitalise on NSW’s critical minerals boom, please contact us. Our team is equipped to provide tailored guidance and support to help you navigate the opportunities and challenges in this rapidly growing sector.
This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.