Madeleine King: International forces caused latest shutdowns in the west

The decision by Albemarle last week to downgrade its lithium hydroxide processing operations in WA underlines the continuing challenges our emerging critical minerals industries face in international markets.

The Albemarle decision follows the decision by BHP just three weeks ago to temporarily suspend its WA nickel operations.

In both cases the companies involved have been quite clear that these decisions were forced by continuing volatile conditions in international markets for critical minerals and rare earths.

The decisions about these businesses were made a long way from Australia — in America and Canada — but they have very real impacts for workers and communities here in WA.

In the case of BHP, the company committed to find a job for everyone who wanted one somewhere else in the business.

In the case of Albemarle, more than 300 workers are likely to lose their jobs.

This is a terrible outcome. In WA we are fortunate that our economy remains strong.

But losing a job is always painful and is never easy. Not just for workers but for families too.

The Albemarle decision in particular will be hard for communities in the South West such as Australind.

Albemarle has committed to support affected workers and to work with unions and the local community.

We need critical minerals and rare earths like lithium and nickel for our energy transition. We can’t build batteries, wind farms and all the other technology we need to reduce our emissions without them.

But the markets for these minerals and rare earths are opaque, volatile and open to manipulation.

Market concentration and volatility in demand has caused extreme price changes in lithium markets in particular, including an 80 per cent fall in lithium hydroxide prices over the past 12 months.

Countries around the world very much understand the importance these minerals will play in the future of our planet — not just for environmental technology, but also in the defence industry.

We need bipartisan support for Australian critical minerals and rare earths industry to help it withstand the enormous pressure that China’s dominance of the international market places on commercial decisions to operate processing facilities in Australia.

The Albanese Government has taken action.

In the May Budget, as part of the Future Made in Australia agenda, the Government delivered a Critical Minerals Production Tax Incentive, valued at $17.6 billion over 14 years, to drive more processing and value-adding of critical minerals onshore in Australia.

Now more than ever, we need to act.

The proof is right in front of us.

But don’t just take it from me. Business leaders in this sector all support production tax incentives.

These incentives were designed hand in hand with industry.

Bizarrely, Opposition Leader Peter Dutton opposes these production incentives. Mr Dutton’s shadow treasurer Angus Taylor said he was against them on Budget night, before he had even heard the arguments of business.

Mr Dutton has called these incentives welfare for billionaires.

I doubt workers losing their jobs would consider these incentives welfare for billionaires.

All emerging industries need some form of State support. Whether in the form of policy changes or direct financial help.

It might be a surprise to some to hear that the iron ore industry, now the engine room of our economy, only got off the ground thanks to the generous support offered through State agreements with the Government of Western Australia in the 1960s.

The iron ore industry is now estimated to directly employ over 43,000 Australians and accounts for about 13 per cent of our gross domestic product.

Our critical minerals and rare earths industry remains very successful.

But if we want these industries to fulfil their full potential, and if we want to create skilled jobs here in Australia for the processing of these minerals, we must provide supports and incentives.

Production tax incentives will help future-proof our economy, help green our planet, protect us from global shocks and create good jobs for future generations of Australians.

Madeleine King is the Federal Resources Minister.