Australia (Common Wealth) _ As the US races to catch up with China on renewable energy technologies, President Joe Biden’s signature climate program is fueling a “golden age of mineral exploration” in Australia, according to the country’s commerce minister.
The Inflation Reduction Act is speeding this, according to Trade Minister Don Farrell, who said in an interview while visiting Detroit over the weekend. Agreements between Australian miners and US automakers have previously encouraged increased investment in the mining and refining of battery metals.
Nearly $400 billion in tax credits and incentives are promised by the IRA for renewable technology, including the production of hydrogen and electric cars. Only when a significant fraction of the minerals used by EVs are harvested or processed are credits on those vehicles given or in a nation with whom the US has a free trade agreement. “That’s Australia,” Farrell replied.
In addition to having significant quantities of nickel, cobalt, and rare earths, Australia is the world’s leading exporter of lithium, a crucial component in EV batteries. The US was becoming more enticing “given just how favorably treated Australia is in the Inflation Reduction Act as it relates to critical minerals,” Farrell said. China is still by far the largest market for the country’s minerals.
Decarbonization was “the first topic that we’ve discussed,” according to Farrell, who added that he saw a “enormous market” for battery metals in particular during his visit with US Secretary of Commerce Gina Raimondo. He said that he also spoke with Wang Wentao, the minister of commerce in China, about decarbonization.
The IRA is a part of a US initiative to create fresh supply chains for clean energy and lessen its reliance on China, which currently controls the market. Farrell, however, stated that Australia intended to serve more markets, such as China, where the great majority of lithium is now processed. After many years of chilly relations, Australia’s diplomatic relationships with China have recently grown stronger.
