Victoria’s 2022 Budget provides positive signals to Victoria’s minerals industry and the role it can play in regional development.
A significant positive in the 2022 Budget is $7.5 million in new funding to help grow the Victorian critical minerals industry.
The funding for a minerals development grants program, government investment in geoscience data, and investment facilitation will provide important support for Victoria’s opportunity in critical minerals such as rare earths and lithium to embed Victoria in renewable energy supply chains.
Victoria is ready to be a major supplier of mineral sands and rare earths with a number of projects in the pipeline across the state.
The funding for critical mineral development is a great signal to the industry that Victoria is keen to support industry investment, but an expanded co-funded program to keep pace with incentives in other states is required in coming years.
MCA Victoria has been calling for matched funding grants for critical minerals exploration to promote the discovery and development of critical minerals in high demand for use in renewable energy and advanced technology.
Measures to support new projects in rural and regional Victoria will mean more jobs and more diverse regional economies.
Victorian mining and exploration is making a major contribution to regional development.
Victoria’s mines directly injected $510 million into the state economy in 2020-21 supporting high wage regional jobs and local business.
Exploration projects across the state in gold, base metals and mineral sands are promising and have the potential to develop into new future mine projects.
The Victorian Budget confirms the significant amount of new taxes imposed on Victoria’s mining industry. Mining is estimated to pay $140 million in royalties alone in 2022-23 including the recent gold royalty.
The latest Fraser Institute survey ranked Victoria’s tax regime last of all Australian states. Reform to Victoria’s flawed gold royalty, imposed in 2020, is required to ensure that the uncompetitive royalty does not result in mines closing in times of lower gold prices.
MCA Victoria also notes modest funding in the 2022 Budget for mineral resources regulatory reform. Better regulation is a key priority for industry to improve timelines and confidence in permitting processes.
A well-funded regulator, through strategic project facilitation, timely permit approvals, and confidence in environmental approvals will help attract investment in mining, generate royalties to fund state services and enable sustained budget repair.