US agrees to fund Australian critical minerals projects
Matthew CranstonUnited States correspondent
Mar 31, 2022 – 10.02am
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Washington | US Commerce Secretary Gina Raimondo has committed to help finance Australian critical minerals projects through its export financing arms, as President Joe Biden invokes Cold War powers to boost domestic supply of minerals crucial for defence equipment and electric vehicles.
Ms Raimondo and Australian Trade Minister Dan Tehan met for an hour on Wednesday (Thursday AEDT) in Washington with chief executives from critical minerals producers to
iron out regulatory hurdles that prevent US financing agencies from investing in such projects.
“We’ve just got a long to-do list from the companies in there about the help they need with financing, the help they need with regulation, the help they need with permitting.”
A lithium mine in Western Australia. Supplied
Ms Raimondo, the former governor of Rhode Island and current chair of the US Development Finance Corporation, said she would be “going one by one breaking down barriers” to facilitate investment in such projects.
In November last year, the US
updated an official list of critical minerals such as nickel and zinc that are central to energy, defence, electronics and other vital industries, as the administration tries to reduce its dependence on overseas supplies.
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On Thursday (Friday AEDT), President Biden is expected to enact Defence Production Act - a wartime power - that enables the government to fund the production of these minerals at current operations, as well as related productivity improvements, safety upgrades, and feasibility studies.
The shareprices of critical minerals stocks in the US rose on the leaked news.
Australian companies that stand to gain include Iluka, Australian Strategic Minerals, Cobalt Blue, Lynas, RZ Resources, VHM. Lithium company Ioneer is seeking funding from the US Department of Energy of about US$500 million and is currently in a due diligence process.
Demand for critical minerals is being driven by increased manufacturing of renewable energy, but there are also supply problems. The US wants to move away from its dependence on China’s production, which accounts for as much as 80 per cent of global supply.
Sanctions on Russia’s exports over its invasion of Ukraine is also adding pressure on supply.
Mr Tehan met with officials from the Export Import Bank and the US Development Finance Corporation – the two equivalent agencies of Export Finance Australia - this week in Washington. He also met with US Senators to firm up support for changes.
“We are going to be making sure that we work to get the agencies lined up to do the type of work we need to get that investment, whether it be with debt or equity,” Mr Tehan said.
According to the International Monetary Fund, Australia is in pole position to benefit from
a sixfold increase in demand in critical minerals worth $US12.9 trillion ($17.6 trillion) over the next two decades.
Mr Tehan and Secretary Raimondo also met to launch the so-called Indo Pacific Economic Framework, part of the inaugural Australia-US Strategic Commercial Dialogue. The ongoing dialogue is between the US Commerce Department and Australia’s Department of Foreign Affairs and Trade.
Ms Raimondo said the US and Australia stood side by side against China’s economic coercion and human rights abuses.
“China’s anticompetitive coercion, there is no place for that. And we will stand with our allies against that, whether it is unfair practices as it relates to trade, which undermined the stability of our industrial base and our workers, or whether it is standing up against the human rights abuses, we’ll stand strong with our allies to do that,” she said.
She said the US and Australia would be drawing up a list of countries to be included in the Indo-Pacific Economic Framework and that strides were being taken.
“It’s a region for which we have been absent in the recent years. And it’s time for us to step up affirmatively around the digital economy, supply chains, critical minerals, infrastructure (and) the green economy,” she said.
(20min delay)