The buried treasure in NSW that could power a clean energy world

The NSW Labor government will defer the payment of $250 million in royalties for five years and implement rapid assessments for critical minerals projects as the state looks to cash in on a mining boom that will be crucial to clean energy manufacturing.

The new measures are part of a push for NSW to become a global leader in mining critical minerals – including scandium, cobalt, copper and silver – which are used to make clean energy products such as solar panels and batteries.

Silver is a key critical mineral in NSW, and is in demand for use in clean energy technologies. Credit: Bloomberg

A new government critical minerals and high-tech metals strategy sets out how NSW can capitalise on worldwide demand, including how the planning system can offer certainty and transparency to the critical minerals sector and communities.

The government says 12 critical minerals mining and processing projects in NSW are ready for investment. They need around $7.6 billion in capital investment and are expected to generate about 4600 jobs during construction, and 2700 ongoing jobs.

NSW has globally significant resource deposits, including 21 of the 31 nationally declared critical minerals, but the high initial investment costs for projects are a barrier for the industry.

The International Energy Agency estimates that over the next 20 years, the world will need six times the amount of critical minerals currently mined to reach global net zero carbon emissions.

The energy transition will need double today’s copper production, triple today’s rare earth elements and cobalt production, and 30 times more nickel – all of which can be found in NSW.

The strategy says clean energy technologies have experienced unprecedented growth in 2023.

“Over the last 12 months, solar photovoltaic installations saw an 85 per cent increase, and wind turbine deployments grew by 60 per cent. Electric car sales surged by 35 per cent, reaching nearly 14 million units – more than six times the number sold in 2018,” the strategy said.

“Additionally, global battery storage capacity expanded substantially, with over 40 gigawatts added in 2023 alone, doubling the previous year’s additions.”

It says with shortfalls for many minerals already expected after 2030, developing new supplies of critical minerals and high-tech metals will be essential to meet demand for clean energy technology.

“NSW has an opportunity to capitalise on this growing demand,” the strategy says.

It also looks at how to encourage exploration by minimising investment risk in greenfield exploration and promoting exploration in new areas, and incentivising production by creating an attractive investment environment.

Developing future-ready skills by providing training and education to encourage careers in critical minerals mining and establishing resilient supply chains are also key parts of the strategy.

The royalty initiative will be an opt-in scheme where the first five years of royalties are deferred.

Premier Chris Minns said NSW had the “metals and minerals the world needs”.

“This is about backing regional jobs and manufacturing jobs, and taking advantage of the critical minerals boom. We want to make sure we fully realise the opportunities that critical minerals and high-tech metals have for NSW,” Minns said.

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