PERTH (miningweekly.com) – The Minerals Council of Australia (MCA) has welcomed the passing of the Inflation Reduction Act in the US, saying it will help to underpin the critical minerals sector in Australia.

The new Bill will see the US government invest $369-billion on renewable energy and reducing the US’ emissions, aiming for a 40% reduction by 2030, compared with 2005 levels.

The Act also requires that 40% of the value of the critical minerals used in the manufacture of batteries, must be sourced from a country that has a free-trade agreement with the US, increasing to 80% by 2027, giving Australia a significant boost.

Australia in July this year joined an international partnership with the US, Canada, Finland, France, Germany, Japan, the Republic of Korea, Sweden, the UK and the European Commission to develop and secure global supply chains for critical minerals that are crucial to clean energy technology and the global transition to clean energy.

Also in July, Australia and the US signed the Australia/US Net Zero Technology Acceleration Partnership, to accelerate the development and deployment of zero emissions technology and cooperate on critical minerals supply chains to reduce greenhouse-gas emissions while supercharging economic growth.

MCA CEO Tania Constable said that driving investment in local processing and manufacturing would ensure the demand for Australian mined minerals including lithium, cobalt, nickel and copper.

“Importantly, it will also strengthen the case for investment capital into mining. Australian mining needs about A$20-billion per year to sustain current production.

"If we are going to increase the capacity of existing mines, or open new mines, including in the commodities needed for our global transition to net zero emissions, capital investment will need to be increased by an order of magnitude,” Constable said.

She pointed to data from the Bank of America, which estimates that $150-billion a year will be needed in global mining to produce the minerals needed to achieve the global transition to net zero.

“Australia needs to position itself as a competitive destination for this capital in order to realise its full potential,” Constable said.