Steve McCartney: Act now or risk resources projects entering valley of death
Albemarle’s decision to lay off 300 workers at the company’s Kemerton lithium refinery in South West WA is another example of Australia acting too slowly to prevent collapse.
A flood of cheap nickel and falling lithium prices driven by aggressive industry policy by other countries around the world mean WA workers are at risk of being left behind.
Labor’s Future Made in Australia Act is a clear plan to put our country back in front in the global race towards net zero. But on our current trajectory, Australia won’t have any new industry to support when the incentive structures begin in 2027.
A key pillar of a Future Made in Australia is the Critical Minerals Production Tax Incentive. The CMPTI will provide a 10 per cent production tax credit to companies processing and refining Australian minerals at home.
The CMPTI is intended to boost the export value of Australian critical minerals and support thousands of new jobs in mid-stream materials processing for batteries, wind turbines, and defence technologies.
But the CMPTI doesn’t start until 2027.
In the two months since funding for a Future Made in Australia was gazetted in the Federal Budget, BHP has suspended its Nickel West operations and West Musgrave project, Fortescue has abandoned its ambitions for a large-scale green hydrogen build and Albemarle continues to wind back its Kemerton lithium refinery expansion.
In those two months, thousands of workers across WA have either lost their jobs or are sitting at the dinner table worrying about how long they might keep the one they have.
A Future Made in Australia was intended to support these workers and ensure secure jobs in new industries for decades to come.
Why are we waiting until 2027 to get started? In recent years, Indonesia has expanded its share of the global nickel market from 17 per cent to 57 per cent. Their share is forecast to rise to 69 per cent by 2030.
This flood of new supply has caused a 43 per cent fall in the price of nickel and made many Australian operations commercially unviable. Seven of WA’s 10 nickel mines have shut in the past nine months.
The Indonesian nickel industry was built by an assertive industry policy implemented quickly.
In 2014, Jakarta banned unprocessed nickel ore exports. This forced battery materials companies to invest in the country and billions of dollars from Indonesian and international investors were put to use.
Now that Indonesia has stood up an export industry and cemented itself as a global battery materials player, they are turning their attention to accessing tax credits and other production incentives available under the US IRA Act.
Access to the American market will make Indonesian nickel totally dominant and, without immediate government action, WA workers will continue to pay the price. The lesson here is simple: be ambitious, look at what others are doing, and move quickly.
A Future Made in Australia shows Labor’s ambition and that they are seeing the economic direction of travel. Now they need to show their speed.
The Federal Government must bring forward the timeline for the CMPTI. Doing so will return our critical minerals industries to being globally competitive, preserve and create jobs in WA, and diversify the industrial base we need to start leading again on resources research and development.
Bringing forward the CMPTI will ensure that workers in WA’s critical minerals industry are not caught in a valley of death as their workplaces go into extended care and maintenance.
It would also send a strong message to the world that Australia is serious about maintaining its position in the global resources market.
The Government must recognise the urgency of our situation and adjust their timeline accordingly. Failing to act could mean that we undo the work to date onshoring minerals processing and are passed over by industries looking to build out their renewables technology supply chains.
For workers to believe in a Future Made in Australia, action must start now — not at some point past 2027.
Steve McCartney is the WA State secretary of the AMWU.
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