Push for manufacturing, security and politics

The loans will be drawn from Export Finance Australia (EFA), via the government’s $4 billion Critical Minerals Facility, as well from the Northern Australia Infrastructure Facility.

The announcement follows last month’s $840 million package of loans and grants to help Gina Rinehart-backed Arafura Rare Earths develop its Northern Territory mine and refinery.

Arafura’s funding – which includes about $495 million in loans from the Critical Minerals Facility, $200 million from the revamped Northern Australia Infrastructure Facility, and up to $115 million in federal export financing – will underpin Australia’s second rare earths refinery after federal taxpayers loaned $1.25 billion to Iluka for a facility at Eneabba in Western Australia.

The Critical Minerals Facility has now committed to support projects in Western Australia, South Australia, the Northern Territory and Queensland.

Mr Albanese announced last week his plans for a Future Made in Australia Act, which would be a series of loans, grants, subsidies, tax breaks and other investment incentives to lure capital to Australia, or stop it from leaving, to bolster clean energy and advanced manufacturing.

The critical-minerals strategy is a key element of the act, and it includes a national security element in that Australia and its allies need to ease dependence on China for supply.

There is also a political element – in that the prime minister is aware of the consequences of job losses in coal mining areas.

He recently announced $1 billion towards developing the manufacture of solar panels near the site of the decommissioned Liddell coal-fired power station in the NSW Hunter Valley.

Queensland launch

Wednesday’s announcement will be in the northern Queensland city of Gladstone, which relies heavily on gas and coal for jobs, and its at the heart of the marginal Coalition seat of Flynn.

“The global race for new jobs and new opportunities is on. Our government wants Australia to be in it to win it,” Mr Albanese said.

“These two critical-minerals projects will help secure good and secure jobs in manufacturing, and clean, reliable energy.”

The Future Made in Australia Act is designed to mimic the pulling power of the Biden administration’s massive Inflation Reduction Act, as well as schemes in other like-minded countries.

The move has rankled the Productivity Commission and other free-market exponents, but Mr Albanese said it was no longer just a matter of free market economics but national security and sovereign manufacturing capacity.