The company's focus has been enhanced by the Federal Budget delivered by Australian Treasurer Josh Frydenberg last night, which confirmed the priorities of the Morrison Government $1.5 billion strategy to support Australian manufacturers.
A Modern Manufacturing Initiative (MMI) introduced as part of the strategy is designed to be a catalyst for domestic manufacturers to scale-up, collaborate and commercialise emerging opportunities.
NTU chief executive officer Mark Tory said: “The escalating urgency for developed countries to secure reliable supply of rare earths reinforces WA’s opportunity to play a strategic global role in the critical minerals sector and could underpin larger-scale commercial processing operations.
“However, that opportunity needs to be acted on now.
“We would like to see government support, both Federal and State, extend to the development of a Critical Minerals Strategic Industrial Hub (SIH) in WA.
“A SIH would support an integrated value chain to promote collaboration on exploration, development and production activities with a shared focus on advancing Australia’s position as a whole, while reducing the upfront capital costs of companies looking to downstream process.”
Modern Manufacturing Initiative
Northern Minerals welcomes the Federal Government's new MMI commitment to work with industry to set two, five, and 10 year ‘roadmaps’ that identify the barriers and opportunities to realising growth in the country’s downstream processing and advanced manufacturing sectors.
The company believes that the development and operation of its Browns Range Pilot Plant has substantially enhanced its knowledge base in relation to the production of rare earth carbonate and puts it in a strong position to take advantage of the incentives being offered in the budget.
Funding of up to 50 per cent of a project’s cost will be available to eligible projects under the new scheme and the funding rounds will occur annually, with the first to begin in the first half of 2021.
This is compatible with the company’s ambition to develop further downstream processing of rare earths in Australia.
Of the three co-investment funding schemes available under the MMI (given NTU’s stage of development and significant capital injected into heavy rare earth manufacturing), the company believes the Manufacturing Integration Stream has the potential to advance the integration of rare earths producers into domestic and international supply chains and markets.
Research and development
The company supports the Federal Government’s decision to back down on plans to cut the research and development tax concession by $1.8 billion.
Northern Minerals welcomes removal of the $4 million cap imposed on businesses with turnovers under $20 million, as well as the potential for 2020 clawbacks as these changes will enable the company to potentially access the R&D rebate for greater than $4 million for future financial years.
US critical minerals supply emergency
The Australian Government’s announcements follow the latest Executive Order (EO) from the President of the United States Donald Trump declaring a critical minerals supply emergency.
The EO singled out the US’s undue reliance on China for multiple critical minerals, in processed or unprocessed form, as “an unusual and extraordinary threat to the national security, foreign policy, and economy of the US”.
The company believes the renewed policy focus from the current US administration on rare earths supply, further opens the door for Australia and Northern Minerals to play a role as a long-established ally as the company has been the only significant producer of heavy rare earths outside of China over the last two years.
Importantly for Northern Minerals, the EO calls for future policy options to reduce the vulnerability of the US to the disruption of critical mineral supply chains through cooperation and coordination with partners and international allies, with specific actions being to:
- Build resilient critical mineral supply chains, including through initiatives to help allies build reliable critical mineral supply chains within their own territories;
- Promote responsible minerals sourcing, labour, and business practices; and
- Reduce the dependence of the US on minerals produced using methods that do not adhere to responsible mining standards.