Some basic facts, page-18

Mr Pearce said it was a “no-risk policy” because if companies don’t value-add to critical minerals and produce something, they don’t receive anything.

An Australian vanadium company with an eye on future demand for its technology was one of the smaller developers that worked with the industry body on getting the tax incentives in the budget.

Vanadium flow batteries, whose underlying technology was developed in Australia, are a long-duration energy storage battery slated to play a key role in storing and time-shifting power produced from renewable sources.

Australian Vanadium CEO Graham Arvidson said the tax break would help stimulate investment in downstream projects and financially de-risk proposed plants, thereby making them more likely to get debt and equity funding.

This is an important factor for the critical minerals industry, where funding markets for many of these commodities are still developing.

For Australian Vanadium, the tax credit would apply at the stage of vanadium oxide production at a proposed processing plant and in the production of vanadium electrolyte at a manufacturing facility.

The company said it would help level the playing field with the US, which implemented its own tax credit regime as part of the Inflation Reduction Act and could help reduce capital flight from the Australian economy.

Because only one element is required to power a vanadium battery, it is highly feasible to have a sovereign battery supply chain entirely located in Australia.

This is not possible for a battery chemistry like lithium-ion, where China has the stranglehold.