Federal Coalition forced to clarify taxpayer funding for Arafura Rare Earth’s project

The federal coalition has been forced to soften its hardball position on $840m in Commonwealth loans to a Territory major project. Read what they’ve said.

The Federal Coalition has moved to clarify its position around Commonwealth support for the Arafura Rare Earths project.

Shadow Minister for Resources and Northern Australia, Senator Susan McDonald told the NT News funding announced in March by the federal Labor government was “locked in” and was not in doubt.

Questions about the Coalition’s commitment to the Arafura Rare Earths project emerged this week when federal Nationals leader David Littleproud declined to commit to $840m in loans approved by government agencies including the North Australian Infrastructure Facility and the Commonwealth’s critical minerals fund.

Nationals Leader David Littleproud at Coconut Grove on Monday.

“In essence, we’ve got to make sure that the investment we make with Australian taxpayer’s money gets a return at some point we’ve got to be careful about the extent of subsidies we get to and particularly when you look at things like manufacturing,” he said.

“At some point Australian taxpayer’s money runs out and you need to make sure you underpin that with the fundamentals of manufacturing and mining in this country, but particularly in manufacturing. It’s about affordable energy and about IR policy, as with mining it’s about getting rid of the green tape.”

His comments earned an angry rebuke from federal resources and northern Australia Minister Madeleine King who called Mr Littleproud’s position “ridiculous” and demanded the coalition clarify which projects it would retain if they win government.

Chief Minister Eva Lawler also seized on Mr Littleproud’s comments, seeking assurances from Opposition Leader Lia Finocchiaro that the local Country Liberal Party supported the Commonwealth commitments around Arafura Rare Earths.

“David Littleproud was in Darwin - I do not know why; obviously spruiking for the CLP - and refused to back the federal support package,” Ms Lawler said.

“Leader of the Opposition, do you back him and the federal Coalition in the fact it will not invest $840m into a mine?

“David Littleproud had you standing beside him saying you do not support this mine. What are you thinking? What is to be gained by not supporting Arafura Resources? There will be 682 workers during construction, and it is only 135 kilometres from Alice Springs.

“Arafura Resources will need to get to Financial Investment Decision, and it is travelling the world to get there. The CLP is knocking the project and not supporting it. That provides uncertainty.”

Forced to clean-up the mess left behind by Mr Littleproud, Senator McDonald said the March funding announcements around Arafura Resources was “already locked in” and said the funding was provided by financing agencies set up by the Coalition, including NAIF

“The Coalition has a long and proud record of supporting the mining industry, and introduced the first Australian critical minerals strategy, list and facility worth $2bn,” Senator McDonald said.

“We remain focused on supporting and further turbocharging the sector by cutting the approval times for new projects and clearing away red tape which is strangling investment.

“Industry knows that when the Coalition says we will support them, they can believe it, unlike Labor who have a track-record of breaking their promises.”

A spokesman said Ms Finocchiaro fully supported taxpayer funding for Arafura Rare Earths.

Why Coalition is yet to commit to support a major NT project

The federal coalition has moved to baulked at making a commitment around $840m in Commonwealth loans to the stalled Arafura Rare Earths project.

Federal Nationals leader David Littleproud yesterday refused to commit Coalition money to back the loan.

In March the federal Labor government committed $840m in loans to Arafura Rare Earths to develop Australia’s first rare earths mine and refinery at Nolan’s Bore in Central Australia, about 125km north of Alice Springs.

She’ll be apples. Nationals Leader David Littleproud in Coconut Grove

But hopes of a bipartisan political position on bankrolling the project was in doubt after Opposition Leader Peter Dutton last week attacked the government’s plan for a critical minerals production tax incentive that would see a 10 per cent tax credit over the next decade to companies undertaking downstream processing.

Mr Dutton said Prime Minister Anthony Albanese was giving “billions of dollars to billionaires and we’ve got families living in tents and cars”.

Speaking in Darwin on Monday, Mr Littleproud declined to commit to backing federal Labor’s contribution to the project which includes $200m from the North Australian Infrastructure Facility, $495m from the Commonwealth’s critical minerals facility and $115m from Export Finance Australia.

“We’ll work through that in terms of the commitments that’s being made by the government and I welcome that,” he said.

“We will have a policy that we will look to encourage particularly here in rare earths in the Northern Territory and Queensland and Western Australia. You’ll see more detail on that as we move forward.

Federal Resources Minister Madeleine King Picture: NCA NewsWire / Martin Ollman

“In essence, we’ve got to make sure that the investment we make with Australian taxpayer’s money gets a return at some point we’ve got to be careful about the extent of subsidies we get to and particularly when you look at things like manufacturing.

“At some point Australian taxpayer’s money runs out and you need to make sure you underpin that with the fundamentals of manufacturing and mining in this country, but particularly in manufacturing. It’s about affordable energy and about IR policy, as with mining it’s about getting rid of the green tape.”

He said his federal colleague, shadow northern Australia and resources minister Susan McDonald, is expected to make a statement this week.

The lack of commitment drew a swift rebuke from Commonwealth, with Resources and northern Australia Minister Madeleine King calling for certainty.

“This is ridiculous,” Ms King told the NT News. “The Coalition need to sort it out and to make very clear which projects they do and do not support.

“These projects are of vital importance to the economy of the Northern Territory.”

Originally published as Federal Coalition forced to clarify taxpayer funding for Arafura Rare Earth’s project