FYI

Australian Government extends a $2 Billion loan facility for the critical materials industry

Matthew Bohlsen | September 30, 2021 | No Comments

Australia might be a laggard in supporting electric vehicles and reducing greenhouse gases; but the Australian Government is stepping up to support the mining industry via a new policy for ‘Australian critical minerals projects’. This is good news for critical mineral junior miners with Australian projects.

You can review the U.S list of 35 critical minerals here. Those of most interest would include lithium, graphite, cobalt, nickel, rare earths, vanadium, tin, manganese, aluminum, uranium, and scandium; as they play a role in the new energy economy of EVs, energy storage, nuclear energy, solar and wind turbine electricity generation.

According to the International Energy Agency (IEA): “A typical electric car requires six times the mineral inputs of a conventional car, and an offshore wind plant requires thirteen times more mineral resources than a similarly sized gas–fired power plant.”

IEA forecast demand increase from 2020 to 2040 to reach a sustainable development scenario

Source: IEA: The Role of Critical Minerals in Clean Energy Transitions – May 2021

Australian critical minerals projects to receive a A$2 billion boost

On September 28, 2021 the Australian Government announced:

“(it) will establish a $2 billion loan facility for Australian critical minerals projects to help secure the vital supplies of resources needed to drive the new energy economy and support the resources jobs of the future……Australia has among the world’s largest recoverable reserves of the critical minerals used in advanced technologies, such as renewable energy, aerospace, defence, automotive and electric vehicles in particular, telecommunications and agri-tech……Prime Minister Scott Morrison said the fund would effectively help fill finance gaps in critical minerals resources developments to get them off the ground……Global demand for critical minerals needed for clean technology applications, like high powered magnets and batteries, are expected to grow exponentially over the coming decades.”

It is probably no coincidence that the Australian Prime Minister has just returned from a USA trip to secure military defense and other support from the ‘Quad alliance’ (Quadrilateral Security Dialogue), involving USA, Japan, India and Australia. Whilst in the USA, President Biden would possibly have been pushing for better critical raw materials supply chain from Australia. And voila!

The Australian Government’s announcement was rather short on details, but did state:

“The $2 billion Critical Minerals Facility will be managed by Export Finance Australia and report to the Minister for Trade, Tourism and Investment Dan Tehan. It will operate on the National Interest Account for 10 years or until finance equivalent to $2 billion has been provided.”

Some junior critical miners with Australian projects that could stand to potentially benefit (in alphabetical order)

• Ardea Resources Limited (ASX: ARL) – Kalgoorlie nickel-cobalt project in Western Australia (WA).
• Australian Strategic Materials Limited (ASX: ASM) – The Dubbo rare earths project in NSW, Australia.
• Australian Vanadium Limited (ASX: AVL) – The Australian Vanadium Project in WA, which has Federal Major Project Status.
• Cobalt Blue Holdings Limited (ASX: COB) – Broken Hill Cobalt Project in NSW, Australia.
• Global Energy Metals Corporation (TSXV: GEMC) – Millennial & Mt Isa cobalt-copper-gold Projects in Qld, Australia.
• Havilah Resources Limited (ASX: HAV) – Mutooroo copper-cobalt project and Kalkaroo copper-gold-cobalt project in SA.
• Liontown Resources Limited (ASX: LTR) – Kathleen Valley Lithium Project in WA.
• Magnis Energy Technologies Ltd. (ASX: MNS) – Imperium3 JV lithium-ion battery cell manufacturing project in Townsville, Qld, Australia.
• Neometals Ltd. (ASX: NMT) – Barrambie titanium and vanadium project in Western Australia. Plus battery recycling technology and lithium extraction technology.
• Sayona Mining Limited (ASX: SYA) – Pilbara lithium assets and the East Kimberley Graphite Project.
• Scandium International Mining Corp. (TSX: SCY) – Nyngan Scandium Project in NSW, Australia. Also, its ion exchange (IX) technology to extract critical materials and its High Purity Alumina, HPA , processing technology.

Closing remarks

With the UN Climate Change Conference (COP26) in Glasgow only a month away (Nov. 1-12, 2021) expect to hear a lot more countries announce progress towards, and updated, emissions targets.

The Australian Government A$2 billion (~US$1.44 billion) critical minerals projects’ loan facility is a good start but much more will be needed if we are to move to a fully sustainable future and reduce emissions to hit our global emission reduction targets.

At least for now the junior critical miners (Australia based projects) have had a substantial boost and let’s hope there is more to come from Australia and other countries to help support the cause.

Disclosure: The author is long ASX: ARL, ASX: AVL, ASX: COB, TSXV: GEMC, ASX: HAV, ASX: MNS, ASX: NMT, TSX: SCY.