Australia- the federal government has pledged $2 billion to a new 10- year loan facility for critical mineral projects. The amount is to assist businesses and offshore companies, more of the value chain products.
There is a huge demand surge for electric vehicle batteries. Therefore, the government anticipated having more domestic production and refinement.
The federal government is willing to provide finance to these companies to end the gap in the supply of critical mineral resources.
Why is the government providing loans?
Prime Minister Scott Morrison said in a statement, ‘’ the commercial dimension of the critical minerals market means it is a difficult place to get established.’’
He said, ‘’ We want to ensure that Australia’s resources producers do get established so they can link up with others in our supply chains in a free and open Indo-pacific.’’
Though, most of the critical mineral supply comes from China.
Last week, Prime Minister Morrison committed to mapping critical mineral supply. The focus will be on fellow alliance countries including the US, Japan, and India.
He said, ‘’ Critical minerals are a strategic area for governments too because they are fundamental to the future economy.’’
‘’ These projects also mean jobs in Construction, infrastructure development and ongoing roles for the mining sector.’’
Meanwhile, export finance Australia has given the duty to manage the critical minerals facility.
According to the government, the facility helps for more businesses involved in the downstream supply chain of the latest technologies.
Which includes renewable energy, defense, automotive, aerospace, telecommunications, and agritech.
The demand for critical material demand will increase in future, and Australia is ready to take advantage.
According to recent research by Accenture, Australia could add 7.4 billion dollars to the economy. It will increase almost 34,000 jobs by 2030 with a diversified approach.
Trade Minister Dan Tehan said,
‘’ the global growth in demand for critical minerals in the production of its latest technologies represents an incredible opportunity for Australia to utilize its natural resources and world-leading mining know how to become a leader in the extraction, processing, and supply of critical minerals. ”
also, resource and Water Minister Keith Pitt believes Australia has a huge amount of reserve of critical minerals.
New battery use lithium, which will be worth $400 billion globally in 2030.An initiative like this will place Australia in a better place in the market, he said.