The New South Wales (NSW) Government of Australia has announced a significant initiative to boost the state's critical minerals industry. A $250 million royalty deferral scheme has been introduced to ease financial pressures on projects and attract investment.

The scheme will allow eligible critical minerals projects to defer the first five years of royalties. To qualify, projects will have to commence production between July 1 2025, and June 30 2030 and have a market capitalization below $5 billion. The focus is on minerals listed on the Commonwealth Government's Critical Minerals List.

The list includes high- purity alumina, arsenic, cobalt, germanium, graphite, lithium, magnesium, manganese, molybdenum, rare-earth elements, silicon, titanium and zirconium.

Currently, NSW has 12 critical minerals projects ready for investment, requiring approximately $7.6 billion in capital and creating an estimated 4,600 jobs during construction and 2,700 ongoing positions.

NSW Minister for Natural Resources, Courtney Houssos, highlighted the long development timelines and high capital investment requirements of critical minerals projects. "The new royalty deferral scheme will assist mine proponents in attracting investment and accelerating production," she said.

The government also plans to investigate a rapid assessment framework for mining projects as part of its Critical Minerals and High-Tech Metals Strategy. This strategy aims to position NSW as a global leader in the critical minerals supply chain, with a focus on processing and advanced manufacturing.

NSW hosts 21 of the 31 nationally declared critical minerals. The critical minerals and high-tech metals strategy prioritizes minerals essential for the electrification of the economy and the production of clean energy products. The International Energy Agency estimates a sixfold increase in critical minerals production will be needed over the next 20 years to achieve global net-zero carbon emissions.

The Association of Mining and Exploration Companies (AMEC), an industry association in Australia, has welcomed this royalty deferral scheme. It stated that it will provide a "massive boost" to the critical minerals industry in NSW. AMEC CEO Warren Pearce emphasized the challenges of securing investment and approvals for new projects, particularly in emerging sectors like critical minerals.

"This announcement is crucial as it recognizes the need for support to get projects up and running and create jobs," said Pearce. "It's a forward-thinking strategy that assists companies when they need it most, while also benefiting taxpayers in the long term."

NSW Premier Chris Minns emphasized the importance of supporting regional jobs and manufacturing while capitalizing on the critical minerals boom. "We want to fully realize the opportunities that critical minerals and high-tech metals offer NSW," he said. "We have the metals and minerals the world needs, and NSW is open for business."