To underpin an accelerating energy transition, the State Government has released the NSW Critical Minerals and High-Tech Metals Strategy 2024–2035 (Strategy) with commitments to defer royalty payments, integrate a circular economy approach to mining and explore a rapid assessment process for minerals mining projects.
Key takeaways
- NSW has a strong resource base, comprising the majority of minerals on the Australian Government’s Critical Minerals List and Strategic Minerals List.
- The Strategy seeks to leverage the State’s established mining sector and untapped resources under five strategic pillars through to 2035 with a focus on five priority minerals and metals that are key to the energy transition, advanced manufacturing and other technological advancements.
- In the near term, current and prospective proponents and financiers may benefit from priorities that include a deferred royalty scheme for new critical minerals projects from 1 July 2025 and the ongoing implementation of the Rapid Assessment Framework by the NSW Department of Planning, Housing and Infrastructure (DPHI) to streamline major project approvals.
- The Strategy also confirms medium to long term actions that include a review of NSW planning processes to ensure that the Strategy’s objectives are achieved and the promotion of circular economy approaches for mining practices. Opportunities to provide input on the development and implementation of these longer term actions should be closely monitored by the critical minerals industry.
NSW is ‘open for business’ for critical minerals projects
The NSW Government has called for greater investment in the emerging critical minerals sector with the release of the Strategy on 18 October 2024.
The Strategy seeks to establish NSW as a leader in critical minerals and high-tech metals that benefits from its established mining sector and the globally significant resource potential in the State.
The release of the Strategy provides a clear indication that there is global competition to attract investment in critical minerals. Compared to other Australian States, the Strategy is more practical, targeted and aligned with mining investment methodology.
The Strategy identifies the following priority minerals and metals for the State and related key applications below, which highlight their growing importance in the global energy transition and other key sectors.
| Mineral / metal | Key applications identified in the Strategy |
| Cobalt | Superalloys, magnets and rechargeable batteries (including for electric vehicles), amongst other applications. |
| Copper | Renewable energy systems (including solar, wind, pumped hydro and thermal) and transmission infrastructure. |
| Rare earth elements | Critical components of wind turbine magnets, electric vehicles, aerospace and defence applications, medical devices and communication networks. |
| Scandium | High performance components for aerospace, aircraft, and defence applications, satellites, solid oxide fuel cells, batteries, electric vehicles and 3D printing. |
| Silver | Consumer and industrial electronic goods, solar panels, mobile phone screen displays and medical applications. |
Strategic pillars to guide sustainable development
To support mining projects with a focus on the above priority minerals and metals, the Strategy outlines five strategic pillars with short to long term actions through to 2035.
The NSW Government has indicated that the pillars will be supported by investment, innovation, partnerships and government coordination to drive sustainable development of the critical minerals industry.
Each strategic pillar and the applicable key goals in the Strategy are below.
| Pillar | Key features |
| Encourage exploration | Minimise investment risk in greenfield exploration in NSW.Promote exploration in underexplored areas in NSW.Identify new critical minerals resources in NSW. |
| Incentivise production | Create an attractive investment environment for mining in NSW.Remove barriers to help projects move from exploration to production.Support industry to navigate the NSW planning system. |
| Establish supply chains | Establish local processing and common user facilities in NSW.Drive research and development and commercialisation of new technologies.Embed circular economy practices into the sector. |
| Develop future-ready skills | Meet the future skills needs of the sector.Deliver regional employment opportunities.Provide training and education pathways to encourage careers in the critical minerals sector. |
| Engage communities | Ensure responsible and sustainable mineral resource development.Drive strong environmental, social, and governance (ESG) outcomes.Encourage awareness of the benefits of the sector by local communities. |
Key actions identified to deliver the Strategy
The State Government has committed to a broad range of short to long term actions to deliver “responsible exploration, mining, processing, recycling and advanced manufacturing” in NSW.
Ongoing and short term actions in the Strategy that we expect will have a material impact on the delivery of critical minerals mining projects in NSW are summarised below.
| Deferred royalty scheme | The Strategy implements a $250 million deferred royalty scheme for new critical minerals projects from 1 July 2025, which is designed to attract investment, ease financial pressures in the early stages of development, and incentivise projects to progress from exploration to production.The scheme is a direct response to findings from the public consultation process to inform the Strategy that identified a role for government to mitigate challenges in securing finance for critical minerals projects.Further information on the guidelines and eligibility criteria for the scheme will be made available by the NSW Government. |
| Faster planning approvals | The Strategy commits to the ongoing implementation of the Rapid Assessment Framework by DPHI for critical minerals projects, which is designed to deliver faster approvals for major projects and provide greater assistance to applicants during the assessment process.This outcome is also expected to be realised through a joint assessment process for critical minerals projects by DPHI and NSW Resources. However, limited information is currently availability on the joint assessment process and potential benefits.Additional assistance to industry to navigate NSW approval pathways and regulatory compliance is also expected, including the release of a ‘guidebook’ for mining development in NSW. |
| Targeted compliance assessments | The Strategy sets out that Targeted Assessment Programs will be implemented to enhance compliance and rehabilitation performance in the mining industry.This initiative aims to uphold a robust planning and regulatory compliance framework with integrated ESG protections and ensure that proponents comply with mining legislation, lease conditions and related frameworks. Regular performance measures, reporting and monitoring are expected to underpin this initiative. |
| Greater transparency | The Strategy aims to improve public awareness relating to exploration activity and progressive rehabilitation in NSW.Improving the social licence for minerals mining projects is designed to provide greater certainty to communities with respect to impact mitigation strategies and strengthen community engagement with the industry. |
The Strategy also establishes other short to longer term actions, which include:
- reviewing NSW planning processes to ensure that the Strategy’s objectives are achieved;
- promoting circular economy practices for mine waste through incentivising mine tailings reprocessing and reuse in a safe and sustainable manner; and
- providing pre-competitive geological data to minimise investment risk at a feasibility stage and encourage exploration at depth.
Next steps
The NSW Government has stated that guidelines and eligibility criteria for the royalty deferral scheme will be made available soon. Current and prospective proponents and financiers of critical minerals projects should monitor for the release of this information as the commencement date for the scheme approaches.
The implementation of other key commitments will also be critical to speed up the delivery of critical minerals projects in the State, including the streamlining of major project approvals under NSW planning framework.
The State Government acknowledges that achieving the Strategy’s objectives has the potential to stimulate other domestics industries, including the advanced manufacturing of renewable energy technologies. We can expect to see an ongoing focus on the critical minerals sector as the energy transition continues both nationally and globally.
You can find out more about the Strategy here.
The Chasing Zero – Energy Transition series also explores the importance of critical minerals in The race at the heart of battery storage.
If you would like to discuss any aspect of the Strategy or the delivery of minerals mining projects in NSW, please contact us.
For further information, please contact:
Peter Briggs, Partner, Herbert Smith Freehills
peter.briggs@hsf.com
