There was a mentioned in this article:“…The report also highlighted that US company Austroid Corporation has had to re-apply for approval to take over the Bald Hills lithium mine in WA because of uncertainty around backing from a Chinese company…”
Critical minerals sector takes aim at FIRB
A deep dive into the burgeoning critical minerals sector has revealed some major players want an overhaul of the way the Foreign Investment Review Board vets overseas investment.
There is support within the sector for reform of FIRB and even suggestions Australia should set up a full-time, impartial review board to advise parliament directly on issues of foreign investment in critical minerals.
The dissatisfaction with FIRB, which includes claims it is inconsistent in rulings on China, is revealed in a new report that comes hot on the heels of theAlbanese government fuelling speculation of curbs on Chinese investmentover and above FIRB checks and balances because of national security concerns.
The reported was prepared by consultants State of Play in partnership with the federal government-backed METS Ignited, the Minerals Research Institute of Western Australia and CSIRO.
The research, aimed at shedding light on how Australia canrapidly increase the global supply of critical mineralsand become a significant player in downstream processing, involved interviews, workshops and a survey of 110 miners, suppliers, government officials, financiers, researchers, and manufacturers involved in critical minerals.
The research revealed FIRB was dealing with a big backlog of investment applications in critical minerals and a level of industry frustration with the delays.
One of the report’s key recommendations is streamlining the FIRB assessment process as car and battery makers, and other downstream players, focused on the electrification of the economy, clamour to secure supply of so-called green minerals.
“As it is currently (part of the Treasury), the FIRB is subject to the same ‘red tape’ as any government department, significantly slowing the review process,” the report found.
“Amplifying the problem, during the pandemic, the threshold for investment review went to $0 and has contributed to a large backlog of applications which are currently being overcome.
“Whilst Australia holds the view foreign investment is beneficial and plays an enormous role in stimulating the economy, there is evidence to suggest foreign investment into critical minerals is a sensitive issue. Impartiality of a reformed review board may help in delineating the line between political pressure and economic incentives.”
It noted that in 2020, FIRB rejected a proposed transaction between rare earths player Northern Minerals and a Chinese state-owned entity and that AVZ Minerals was forced to forego $3 billion in investment from Chinese company Yibin Tianyi even though the AVZ lithium project is in the Democratic Republic of Congo.
The report also highlighted that US company Austroid Corporation has had to re-apply for approval to take over the Bald Hills lithium mine in WA because of uncertainty around backing from a Chinese company.
Other key recommendations around investment in both mining and onshore processing included boost flights from Asia, and in particular South Korea, to Perth given WA’s mineral assets and move downstream into lithium hydroxide production.
State of Play chief executive Graeme Stanway said the research revealed concerns the FIRB was taking too long to approve investments and not always consistent with its rulings.
Mr Stanway said feedback suggested that one case could be treated different to the next on security issues related to Chinese investment.
“One of the other big issues, particular from the miners that we spoke to who were trying to get projects up, was how tricky, or how difficult, financing was in Australia,” he said.
“Most of them had to go overseas, which I think was interesting commentary given we should understand these projects in our finance industry here more than anyone else.”
Many in industry want Australia to push as far into midstream processing and producing cathode and anode-ready materials as possible to add value to minerals mined here.
They also believe this will put Australia in a stronger position once battery minerals start to be recovered and re-used through recycling.
