Senate Economics Legislation Committee [Part 2], , 3:54:44 to 4:06:46
Details on the $1 billion strategic reserve, including virtual stockpiling, price support mechanisms, and the investor front door initiative.
Topics: Manufacturing, Government spending
Speakers: Speaker 25, Senator Susan McDonald, Speaker 23, Geoff Mason, Unknown Speaker, Speaker 20
Thank you. Um, back to the critical mineral strategic reserve. How's it
>> Well, thank you.
>> Excellent. That is a terrific response. What feedback has government received
in our engagement with industry to date? um they are very pleased and interested in the tools that are now available to the government that can overcome some of the very specific problems that the critical minerals industry is facing. So there have always been financing tools available through the crit well not always but there are financing tools available through the critical minerals facility in relation to debt and equity and um and certain usage of things such as guarantees. This toolkit now allows the government to um deal with problems specific to critical minerals which can be sufficient offtake to reach FID as well as sufficient price certainty to reach FID um as well as some additional things that we can do with regards to aggregation. So the feedback around the tools that we have available is very positive.
>> Terrific. And uh so what sort of trials or uh testing potential models of this reserve have you been doing physical applications or is it a virtual stockpile? How's that going to work?
>> The reserve can do both physical stockpiling but it's primary focus is going to be as a virtual reserve. So it is $1 million set aside for the virtual reserve with 150 oh sorry 1 billion plus 150 million for the stockpiling component. Uh the virtual tools as I mentioned include things such as price support the ability to do contracts for difference to take some of the price risk um out of of these um early stage investments. uh it can be taking off take um guarantees aggregation and debt and equity also remain part of the package or potential packages. Um the key though with the strategic reserve is that it's designed to create strategic supply chains. So we're looking to partner with countries overseas that have demand for these products and create sustainable long-term supply. The tools are designed to help develop the market, create um create projects outside of very concentrated supply chains we see today that can then lead to market signals um around pricing for example that can help develop the market further as time progresses.
>> When do you expect to begin trading?
>> We have uh well the time frames are a little bit dependent on the demand that we see coming through in the market. So um what we have been undertaking is a lot of engagement with partner countries um who are ultimately going to be receiving the supply that is coming online from Australia. This has developed um at different rates in different countries. We are now seeing much more positive and very specific suggestions around what people are looking for which is a lot of progress since the critical mineral strategic reserve was announced. So that is one factor that affects timing. Another factor is the readiness of the projects. As you've mentioned, it can take a little while for projects to reach the prefeasibility um stage when which is when they become eligible for the CMSR consideration. Um in addition to that uh we we have received a number of applications. So we are open and running. So um those applications are currently within our assessment process. >> We have two projects that have also received um an announcement of support from the government as part of the CMSR or CMSR aligned.
>> Terrific. How long do you think an assessment will be um in your office?
>> I don't think we have a good gauge on that. This is a very much a startup tool and it's very novel especially um internationally when we're talking to our counterparts they're trying to develop similar tools um and haven't yet decided what what they will be able to use. Mhm. >> So um we have examples from um existing financing negotiations which again they vary a lot but it suggests that we are looking at a sort of an extended period of time because we need to go through um strategic assessment but then a very careful due diligence process where we're we're looking at significant investment in companies. So we don't want to rush it. this isn't going to be something that that sort of gets rolled out incredibly quickly, but there is an urgency um to ensure that we start developing these supply chains in the national interest.
>> Yeah, I mean we often talk about the approvals valley of death and whether or not companies will just run out of capital before they can get to that market stage. >> Do you think six months would be reasonable? I I'm not trying to hold you to this, but I'm just trying to get a sense of, you know, how long it might take to get approved to be a part of the strategic stockpile.
>> At this stage, I wouldn't want to give a time frame because I think it would give companies false hope or or bas given that I don't have any data to suggest how time frames are likely to run.
>> But you've got two applications that you're currently considering. No, we
have two applications that um have progressed to a letter of support from the government. So, one is the Arafura Nolans project. The other is the Alcoa Sojets Gallian project in Western Australia. They have um they have been through a process and received a letter of support which is not binding at this point but as you say provides some confidence for the project to move forward.
>> Right. Okay. And I'm sorry you you may have said this and I just didn't hear you properly. Is it all virtual stock piles or will there be some physical
>> 150 million is set aside for physical stock piles.
>> Physical stockpile. Right. Okay. Okay. Do you know where that will be?
>> It would very much depend on what the stockpile ends up being with.
>> Okay. On on site at the mine or
>> Well, stockpiling is actually quite a complicated complicated topic when we're talking about warehousing a material that um that in some cases um can degrade over time. So the conditions in relation to that particular mineral would be crucial on the mind side is one option. >> Um at the moment uh what we have [snorts] seen in our letters of support is indications of um potential rights to offtake which is a much easier way at an early stage to provide confidence without having to incur the stockpiling issues when it turns into a physical product.
>> Yeah. Terrific. All right. Well, I guess given um given that they don't need to be huge sites, um we'll be able to identify them by the barb wire and the armed guards perhaps. uh Miss Harmon, I'm really sorry, my eyesight is terrible. I think I've got your name right. Um, do you have I know you're seeking data from states and territories on how long an approval is, but do you have any any data at all um on how long an approval is in Australia? So I went to Pedak in Canada uh maybe three years ago now certainly a couple of years ago and Australian government officials were quoting 16 years but I'm if that's something that is a a Australian government position.
>> Just have a quick look in my folder.
looking at those numbers. Perhaps if I can provide you with a sense of comparison. Um, so I was previously posted to the United States where I was working out of the Washington DC embassy. Um while I was over there um I think it was fair to say that people were quite optimistic about being able to achieve a time frame which was more similar to Australia's uh permitting time frames. Um the Australian process is a very kind of linear process where it's from point A to point B whereas process processing and approval times overseas can be quite diverse in the way which they go about them. That includes for both our partners in the United States as well as Canada.
>> So what was their time frames?
>> Uh considerably longer. Um anywhere up to 25 years to 30 years
>> for the same sort of
>> for the same sorts of minds.
>> Minds. Okay. >> Oh, that's good news. >> So we'll beat them on time frames.
>> But we
>> obviously point to the EPBC reforms that
we passed like super fast now, isn't it?
Well, it there certainly was an effort to um recognize that there was a problem that we were trying to fix, Senator
>> Okay. So, um All right. Well, we'll look forward to the I'm sorry, did you find some data there?
I did find some things um as it relates to um EPBC approvals and um median approval times for projects that receive a controlled action decision is approximately 118 weeks across all industries and that's as at 14 October 2025. Um
>> so two years
>> as as uh minister pointed out the government's reforms are seeking to address those time frames improving efficiency and strengthening environmental outcomes. Um there's um obviously the government has announced its uh investor front door um which is um another tool if you like to facilitate those projects through both the financing and the um the regulatory pathways. It's still early days for the investor front door. Um but it's um certainly with view to improving the time frames on projects.
Let's be optimistic that we can the EPBC is going to solve all ills that we're going to approve things faster that section 10s won't be abused that anyway long list of things that we need to do to be uh competitive and to asssure that um you know countries like Argentina and other South American countries who are being very aggressive competitive natures. Um, don't don't do a better job. Hi, Miss Lee. I haven't seen you for ages. >> What What are you general manager for in this division?
>> I'm general manager of mining and remediation.
>> Mine rehabilitation.
>> Mining and remediation.
>> Yes. Terrific. Oh, very good. Do you have any data on mine approvals? Um the
only thing [laughter] I would add in addition to uh what Missman provided was uh we do have a figure about um the number of resources related projects that have been approved under the EPBC. So for the time period uh the 1st of May 2022 to 23rd of April 2026 there was 115 resources related projects that were approved. So that includes mining, oil and gas projects.
>> Terrific. Oh, perhaps for the next on notice, you can tell me how long they took to get approved. let's call it a day.