Australia’s mining future: what Labor’s policies mean for the industry

The re-election of the Australian Labor Party (ALP) on 3 May will pave the way for legislative reforms to Australia's mining industry. The key policy announcements made by the ALP in relation to mining prior to or during the election campaign included:

Critical Minerals Production Tax Incentive (CMPTI)

The CMPTI, announced by the ALP in 2024, is a tax credit scheme meant to support the critical minerals industry and promote the downstream processing of critical minerals in Australia. In early 2025, the CMPTI was passed by the Federal Parliament.

The CMPTI will provide a refundable tax credit on 10% of eligible costs associated with the production of critical minerals and rare earths. The incentives will be available to Australian and foreign entities that undertake downstream processing in Australia and apply to to the direct costs of downstream processing and refining of certain critical minerals. The eligible facility must be located in Australia and the critical mineral processing and refinement can be from an existing facility or an entirely new development

The CMPTI will be available for up to 10 years per project for production between 1 July 2027 and 30 June 2040. It is estimated that the incentives will be valued at $7 billion.

Critical minerals strategic reserve

During the election campaign, Prime Minister Anthony Albanese announced the establishment of a Critical Minerals Strategic Reserve if the ALP was re-elected. If ALP proceeds with establishing the reserve, the Federal Government will commit to entering into contracts to purchase, or obtain options over, key critical minerals. It is anticipated that the reserve would provide leverage to the Federal Government in relation to critical minerals during periods of heightened geopolitical tensions. The ALP indicated the primary consideration for entering into offtake agreements will be securing priority critical minerals for strategic reasons. The Critical Minerals Strategic Reserve is expected to cost $1.2 billion.

Further details of how the Critical Minerals Strategic Reserve will work and how and when it will be implemented were set to be announced after the Federal election.

Future Made in Australia Fund

In April 2024, the Federal Government announced its 'Future Made in Australia' policy. Given the policy did not have bipartisan support, the re-election of the ALP will see the implementation of the policy.

The Future Made in Australia policy covers a broad range of initiatives aimed at maximising the economic and industrial benefits of the move to net zero and securing Australia’s place in a changing global economic and strategic landscape. Some key aspects of the Future Made in Australia policy (that are more specific to mining) are:

• tax incentives for processing of critical minerals and production of hydrogen (including the CMPTI as discussed above);

• a more "streamlined" approach to the processing of 'lower-risk' foreign investment proposals (e.g. known investors);

• more dedicated resources to screen foreign investment in critical infrastructure, critical minerals, critical technology, sectors holding or having access to sensitive data sets, or sectors in close proximity to Australian government facilities;

• funding for the Critical Minerals Facility and the Northern Australia Infrastructure Facility; and

• investment by the Federal Government into an initiative by Geoscience Australia to map Australia’s endowments of critical minerals and national groundwater systems.

Nature positive reforms

Following on from the ALP's 2022 election policies, the ALP has sought to introduce a range of nature positive reforms to align with Australia's adoption of the Kunming-Montreal Global Biodiversity Framework. Legislation was successfully passed in December 2023 to create a high integrity voluntary biodiversity credit market (the Nature Repair Market) intended to help fund nature restoration projects. These projects must comply with nature repair methodology determinations in order to generate a certificate which can be traded or retired. The market formally commenced operating in March 2025 and a wide variety of potential projects are being considered, including those involved in pest and feral species control as well as re-establishing vegetation along waterways. Although biodiversity certificates cannot currently be used for compliance purposes the re-election of the ALP paves the way for the further expansion of market based mechanisms to address biodiversity loss.

Federal EPA

In March 2025, the Federal Government re-committed to establishing a federal environment protection agency if the ALP was re-elected. This was previously a 2022 election promise by the ALP, forming part of the larger planned environmental legislation reform package which faltered during the first term. Comments made by the ALP during the campaign indicate that the new federal EPA will not be the same model as the one that failed to pass through the Senate in 2024 (that would have approval powers as well as enforcement powers), with the new model to be developed in consultation with state governments, industry and environmental groups.

Climate – the Safeguard Mechanism, Australia's climate targets and Article 6

In 2023, the ALP government implemented reforms to the Safeguard Mechanism aiming to reducing emissions from large industrial facilities, including a 4.9% facility baseline decline rate until 2030, followed by 3.285% until 2050. While a Coalition government would have looked at "relaxing" the mechanism, a re-elected ALP, is expected to strengthen the Safeguard Mechanism (as well as introduce ACCU project integrity initiatives) as part of a ratchetting up of decarbonisation initiatives.

Australia currently has a legislated target to reduce its greenhouse gas emissions to 43% below 2005 levels by 2030. There is an expectation from the international community and the United Nations for Australia to announce a 2035 Nationally Determine Contribution (NDC) that is more ambitious than the current 2030 target. There is potential for a target in the range of a 60-75% reduction on 2005 levels by 2035 by be set. If Australia were to set a more ambitious 2035 NDC, this would require the introduction of a steeper baseline decline rate (either across all covered facilities or for certain sectors) and/or broader coverage of the Safeguard Mechanism to other high emitting sectors in order to regulate a greater proportion of emissions. Any changes are most likely to occur following the schedule 2026/27 Safeguard Mechanism. There is also potential that internationally-recognised emissions reduction credits may become eligible to be used for Safeguard Mechanism as Parties to the Paris Agreement, such as Australia, consider engaging in Article 6 carbon markets to help meet their NDCs.