Australia Bets on Battery Boom With New Minerals Plan

A 2027 tax incentive could shift Australia from exporter to refiner in the battery race

4 Dec 2025

Australia’s emerging battery industry is entering a decisive phase as the government prepares to introduce the Critical Minerals Production Tax Incentive, a measure expected to reshape the country’s mineral refining ambitions.

The policy, due to take effect on July 1 2027, will provide a 10 per cent tax offset for domestic refining of critical minerals. Analysts say the measure could encourage companies to establish more advanced processing capacity within Australia, rather than exporting raw materials for refinement abroad.

Canberra’s approach signals an effort to build a full value chain for battery materials. “The policy is an opportunity to strengthen a future domestic supply chain,” Australian Rare Earths said. Wesfarmers Chemicals added that it brings “clarity to forward investment horizons”, while Vulcan Energy said it could enhance Australia’s position as a supplier of refined battery-grade materials.

Industry leaders remain cautious, noting that the incentive’s delayed start leaves firms exposed to existing market and regulatory hurdles. Companies will need to manage high energy costs, lengthy approvals and construction expenses before any benefit is realised. Critics argue that these factors must be addressed for the scheme to deliver tangible growth.

Still, sentiment across the sector is tentatively positive. Analysts view the incentive as a catalyst for large-scale processing projects and new partnerships. If successful, it could mark a shift in Australia’s role from a major exporter of raw minerals to a more competitive producer of refined materials.

For now, attention remains on early industry responses and how investment strategies may evolve as the 2027 start date approaches.