The Albanese government will subsidise mining projects for critical minerals like lithium in a bid to accelerate green industries like the batteries used in electric vehicles.

A “critical minerals strategy” in consultation with mining companies and traditional owners, was announced by Prime Minister Anthony Albanese and Resources Minister Madeleine King in a press release on Thursday night.

About $1 billion from the National Reconstruction Fund will be allocated to the new ‘Value Adding in Resources Fund’.

It will work alongside the existing $2 billion Critical Minerals Facility.

Additionally, $50.5 million will be allocated in next week’s budget over four years to establish a critical mineral research and development hub.

‘Clean energy future’

The government pointed to research indicating that the value of lithium exports in Australia is forecast to rise 10-fold over the next two years.

Lithium is a critical ingredient in batteries that power electric vehicles.

A local battery manufacturing industry tied to lithium mines could add $7.4 billion to the economy each year by 2030, including 34,700 jobs, the government said.

“Australia’s natural resources have powered our nation and we are committed to supporting the critical minerals sector and new clean technologies to reach our target of net zero, and make our nation an economic powerhouse with a clean energy future,” Mr Albanese said.

“Today’s new initiatives will ensure we can create and support local jobs, diversify global supply chains and meet the growing demand for batteries, electric vehicles and clean energy technology.”

Under the plan, the government will spend a further $50 million over three years on a “critical minerals development program” that will fund grants for “early and mid-stage critical minerals projects”.

It will build on $50 million in existing grants for six other such projects.

Key to net zero

“Without Australia’s resources, the world will not reach net zero,” Ms King said.

“This package of measures demonstrates our commitment to net zero and the important role the resources sector can play in our energy transition.

“We are investing in the science and R&D collaborations. We are backing projects that are early to mid-stage, as well as helping to fast-track financing for projects which are further along in their development,” she said.

“The new Critical Minerals Strategy will be developed in consultation with the industry and experts, and will help the government identify how it can best support the growth of a sector that will be crucial to help the world reach its low-emissions goals.

“Building on the sector by generating new downstream industries and diversifying global supply chains will help Australia and its partners to meet net-zero commitments.”