Why BHP is against ‘sugar hit’ subsidies for critical minerals
BHP chief executive Mike Henry says an unprecedented era of government funding for “critical minerals” ventures risks distorting markets, and governments could achieve a broader benefit by speeding up project approvals rather than giving “sugar hits” to individual projects.
Mr Henry said more alignment between nations on critical minerals lists would also help the world make a more efficient transition to a low carbon economy and avoid trade partners speaking “at cross-purposes” over the definition of a critical mineral.
BHP chief executive Mike Henry would prefer to see governments speeding up project approvals. Ian Waldie
The Albanese government will soon update its list of minerals that are “critical” for the nation’s prosperity, and Resources Minister Madeleine King will discuss the topic on Tuesday at The Australian Financial Review Energy & Climate Summit in Sydney.
Governments in Japan, the United States, the European Union and Australia have placed extra focus on “critical minerals” lists in the past five years amid evidence China is willing to use its dominance of many mineral supply chains as a coercive tool.
The federal government has earmarked $2.5 billion of taxpayers’ funds for critical minerals projects, with $1.25 billion of that loaned to Iluka Resources for the construction of Australia’s first rare earths refinery at Eneabba.
Australian companies such as Lynas, Syrah Resources and Jervois Global have also secured US government money to help accelerate their rare earths, graphite and cobalt projects respectively.
Mr Henry told The Australian Financial Review that government subsidies for mining projects were warranted in certain circumstances, but could distort markets by boosting uncompetitive projects
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