NSW Government unveils $250 million Critical Minerals initiative
The state government has announced a $250 million royalty deferral initiative as part of a new Critical Minerals and High-Tech Metals Strategy, aimed at attracting investment in the state's emerging clean energy sector and creating thousands of jobs.
The NSW Government has launched a new $250 million royalty deferral initiative to encourage investment in critical minerals projects in New South Wales. This scheme, part of the state’s newly unveiled Critical Minerals and High-Tech Metals Strategy, aims to reduce financial barriers for early-stage projects, enhance economic viability, and create jobs in the growing clean energy sector.
Currently, 12 critical minerals projects in NSW are seeking approximately $7.6 billion in investment and are expected to generate about 4,600 construction jobs and 2,700 ongoing roles. These projects involve key minerals such as rare earths, cobalt, copper, scandium, and silver, all vital for electrifying the economy and manufacturing clean energy products like solar panels and batteries.
One of the primary hurdles for these projects is high upfront costs. The new deferral scheme allows critical minerals projects to opt-in and defer royalty payments for the first five years, reducing financial pressure during the early stages of development. The initiative targets projects that can begin production between 1 July 2025 and 30 June 2030, with proponents having a market capitalisation of under $5 billion.
Premier Chris Minns spoke of the importance of NSW’s mineral wealth in the energy transition, stating, “We’ve got the metals and minerals the world needs, and NSW is open for business. We are sending a clear message to Aussie and global miners: invest in NSW. This is about backing regional jobs and manufacturing jobs, and taking advantage of the critical minerals boom.”
The new strategy also addresses the planning process for mining projects, with the NSW Government looking at a streamlined assessment framework to provide greater clarity for project developers. According to Minister for Planning Paul Scully, “The strategy identifies a number of improvements we can make to help enhance the system. These will provide greater guidance to the industry and improve collaboration between government agencies and departments in project assessment.”
NSW is home to 21 of the 31 critical minerals identified by the Commonwealth, and the demand for these resources is set to rise as the world works towards net-zero carbon emissions. The International Energy Agency has forecast that to meet future energy needs, the global production of critical minerals will need to increase significantly, with copper production doubling and rare earth elements and cobalt production tripling.
Minister for Natural Resources Courtney Houssos said that the royalty deferral scheme will support faster project development, attract investment, and boost local manufacturing. "NSW critical minerals projects typically have long lead times for development, and higher capital investment. The new royalty deferral scheme will assist mine proponents to attract investment and move faster to production."
In addition to supporting mining, the NSW Government is keen to encourage local processing and advanced manufacturing to maximise the economic benefits of its critical mineral resources. Plans are being explored to establish common-user refineries and increase domestic manufacturing capabilities in the clean energy sector.
The new strategy sets out five key priorities: promoting exploration, incentivising production, developing future-ready skills, establishing resilient supply chains, and ensuring community engagement in responsible mining practices. By focusing on these areas, NSW aims to position itself as a leader in critical minerals production, processing, and advanced manufacturing.
