MADELEINE KING, Minister for Resources, Minister for Northern Australia: Good morning, everyone, and welcome to the wonderful University of Western Australia campus here in Crawley, in Western Australia. I want to welcome the Treasurer, Jim Chalmers, and thank him for being here today. Also, to acknowledge Amit, the Vice-Chancellor here at the UWA, as well. And I want to thank the Centre for Microscopy, Characterisation and Analysis, that has just hosted us on a little tour. And also Professor Tony Kemp, the rock doctor, chief investigator of the ARC Centre in Critical Resources for the Future; my friend Professor Gordon Flake, CEO of the Perth US Asia Centre; and also the CEO, Darryl Cuzzubbo, of Arafura Rare Earths. Thanks for you all so much for coming here today.

But really importantly, bringing this group together today demonstrates the critical intersection of the scientific discovery that’s going to be so important in the processing of rare earths, the geostrategic significance of having alternative supply chains in critical minerals and rare earths, and the dedication and hard work of the resources sector of Australia and Western Australia, and also the determination of the Albanese government to lead globally on the development of critical minerals and rare earths globally.

So today is an important day for our industry and for the Northern Territory as well, and for our partners around the globe seeking to diversify critical minerals and rare earth supply chains. And I’m really, really pleased to announce that the Albanese government will use the Critical Minerals Strategic Reserve for the first time to make a non-binding commitment to purchase up to 500 tonnes per annum of rare earths offtake from Arafura Nolans rare earth project, which is in the Northern Territory, about 135 kilometres outside of Alice Springs. So very important for the Alice and for the NT.

But really importantly and very significantly, as a result of this commitment of the Australian Government, Arafura has now taken a final investment decision to go forward with the Nolans rare earth project. And what that means for us nationally, as our participation in the rare earths global supply chain is as it becomes operational, Arafura rare earths project will provide around 4 to 5 per cent of global rare earths demand. That’s a really significant inroads into those global supply chains.

As for the strategic reserve, this was legislated only quite recently and the government has stepped up and made a decision to use it and to use it productively in making sure we can secure final investment decision on one of the most significant rare earths mines and processing facilities in the world, and that is what we are announcing today.

I’m going to hand over Darryl in a minute to just go through a bit more of that, and then we’ll hear from the Treasurer and probably take some questions. So hand be over to you now, Darryl. Thanks for having me.

DARRYL CUZZUBBO, Managing Director and CEO, Arafura Rare Earths: Thank you, Minister. And good morning, everyone. It’s good to be here with you. So let me just first up by thanking Minister King, the Treasurer and the Australian Government not just for their support today of the strategic reserve, but they’ve been giving us support for a number of years now. And we wouldn’t have got this project moving into construction without that sort of support.

It’s obviously a very monumental milestone for the company as we go into construction. But I’d like to say it’s a significant milestone for the Northern Territory and, indeed, Australia as we build Australia’s first fully integrated ore to oxide rare earths project. This project will play a meaningful role globally in diversifying the supply of rare earths, and as a result, we’ve enjoyed the support from Germany, US, Korea, Canada, but there hasn’t been a stronger supporter than the Australian Government, Export Finance Australia and the NAIF as we’ve garnered that support.

Just the kind of dimensions and significance of today, this project, just phase 1, will be by far and away the largest and longest life mining investment in the Northern Territory. It will bring many high-skilled jobs into the Alice area. Just phase 1 will double the number of containers going through Darwin and the Darwin port. And I’d like to think that as we pursue the ambition of becoming a processing hub for rare earths in Australia it will help unlock the rare earths sector.

So let me just finish by again thanking the Australian Government and their support. I’d also like to thank our retail investors that have been with us for many years, the Arafura team and board that have been determined and tenacious. This has not been an easy task. But also to thank our major shareholder, Hancock. Without their support, we wouldn’t be here today as well. Thank you.

JOURNALIST: Could we just ask you a few questions about the timeline of phase 1 and what we can expect before we get to that 500 tonnes being able to be produced?

CUZZUBBO: Yes, so you would not be surprised that Minister King asked exactly the same question. So basically, today we will be releasing the bids to start the bulk earthworks, and we expect that to start around September of this year. The construction timeline is a bit over three years, and we’ve got a two-year ramp-up.

JOURNALIST: How confident are you that you’ll be able to meet that kind of two, three-year mark?

CUZZUBBO: Yes, so we’ve done – we’ve set ourselves up. So we’ve got a great team, a great owners team, a great [indistinct]. We’ve done more than enough engineering. We’ve got solid plans and we’ve set ourselves up to deliver on that.

JOURNALIST: I understand the company had been looking for a final investment decision by 2025. Can you just explain what the reason for that delay has been?

CUZZUBBO: Yeah, sure. So if you look at – if you look at Australia’s Future Made in Australia policy, if you look across the globe and look at all rare earths projects, we’re going all to an oxide. So almost all the others don’t do that. They go to a concentrate or a carbonate. We’re going all the way downstream to an oxide. But what that has meant - it has meant that the funding challenge is much more significant. And that’s why we’ve needed support from key investors, government support – not just Australia but Germany, et cetera, et cetera. So it’s taken us longer to get the funding because we’re going all the way downstream to an oxide. But because we are, there’s more jobs in Australia, more processing in Australia, and we can provide an alternative supply chain, you know, outside of China.

JOURNALIST: And I think you or the company has previously said there was a clear need for targeted short-term government intervention to catalyse investment.

CUZZUBBO: Yeah.

JOURNALIST: Is this the kind of government intervention that you’ve been looking for?

CUZZUBBO: Yeah, you know, let me say, sometimes Aussies, we can be a little bit critical, right, of our large institutions. And we’ve dealt with many countries and many governments, and I can tell you that the support that we get from the Australian Government – whether it’s in debt, whether it’s in equity, whether it’s on offtake, and it’s all done on commercial terms, right, as you’d expect from commercial lenders and investors – it is the most comprehensive and methodical. And look at the strategic reserve. It wasn’t announced that long ago. It passed through legislation pretty quickly and in a matter of weeks got the first offtake.

JOURNALIST: Are you able to put into layman’s terms how much 500 tonnes of rare earths is worth?

CUZZUBBO: Yeah, that’s a good question. So let me dimension it a couple of ways. So, firstly, 500 tonnes, so for every kilo, you would get, like, $100, $120 a kilo. It is just over 10 per cent of our phase 1 production. And it would support about half a million electric vehicles. So it’s significant. And for us, our lenders require that 80 per cent of our offtake is locked in. So we’ve already got offtake with Hyundai, Siemens Gamesa and [indistinct]. And this is really the last piece of the puzzle to get through to 80 per cent.

JOURNALIST: [Indistinct] electric cars, how many electric cars per year was it?

CUZZUBBO: Half a million, yes.

JOURNALIST: Do you have any other non-binding commitments with other countries or organisations, obviously [indistinct] or more?

CUZZUBBO: Yeah, for sure. So we have binding commitments with Hyundai and Kia, Siemens Gamesa and [indistinct], both in Europe and in the US. But we also have debt with multiple lenders from Korea, Canada, Germany – who have I forgot – and Australia, of course, yeah.

JOURNALIST: And what agreements – are the agreements [indistinct] you have to make to meet this deal with Australia binding with the Federal Government?

CUZZUBBO: Yeah, so there’s a number of things we need to go through, there’s due diligence et cetera. But what I would say is the rare earths sector has needed government intervention because it hasn’t been a functioning market. So the pricing mechanism has not reflected the market fundamentals. And the US has, I’m going to say, fractured that pricing environment by putting in price floors. But the ultimate destination is to have a price index for rare earths that is independent and transparent. If we can move to that, we won’t need the sort of government intervention that we’ve needed to date. It was only last week that we signed an agreement with [indistinct], which is a global trading company, for volumes into the US on this newly established independent and transparent index. So other producers, other consumers need move to that index.

JOURNALIST: The buyers of electric cars are often thinking about the environment and where the metals in their car have come from. With those offtake agreements, is there a particular interest in Australian mining practices, and does that help?

CUZZUBBO: So that’s a very good question. So, you know, one thing around the world, Australian mining projects are valued because we do what we say, it’s got the highest environmental standards et cetera. Interestingly, so nearly 90 per cent of rare earths magnets come from China today. And a lot of the [indistinct] comes from Myanmar. So if you're an EV buyer and you want – many EV buyers want to be part of a sustainable future. You should be getting your product from us because you know it is done to Australian environmental standards. So this should be a differentiator for us. And a number of car manufacturers understand that.

JOURNALIST: Will it be cost-competitive with what China is able to do, because [indistinct] with the nickel industry and lithium? We just haven’t been able to keep up with costs and [indistinct]?

CUZZUBBO: Yeah, so I mentioned before, we need a price index that reflects market fundamentals. And part of a price index is it has incentive pricing. What does the pricing need to be to bring new production? Arafura Nolans project will be at the bottom of the global cost step, not because of anything fancy that we’re doing; it’s just we sit on a very high-quality ore body, as Minister King mentioned, it’s just outside of Alice Springs. And it produces rare earths but also phosphoric acid, so as a byproduct credit, we are way down at the bottom of the cost scale. So we will be very competitive.

And just in terms of mine life, our ore [indistinct] is at [indistinct]. We don’t know how deep it is. The first 200 metres gives us a mine life of 38 years. This project is going to be around for more than half a century.

JIM CHALMERS, Treasurer: A big thank you to Darryl for being here today and for this really crucial investment decision, which will mean more jobs and more opportunities in WA and also in the Northern Territory. I want to thank my colleague Madeleine King, outstanding Minister for Resources and Northern Australia, and I want to thank our hosts at the UWA here. It’s an absolutely stunning part of a wonderful city. I’m really pleased I could be here today.

We’ve been talking today about the very powerful combination of science and industry, making a contribution to our economic security and our national security as well. This announcement today is a really important step forward for the Australian rare earths industry. We have exactly what the world needs, and we have businesses prepared to make these kinds of investments, supported by this non-binding commitment from the Australian Government to make the most of this golden opportunity.

Rare earths are an absolutely golden opportunity for our country. This is essential to our economic security and to our national security and to providing more opportunity for more people – in this case in WA and the Northern Territory, but with vast benefits for the Australian economy more broadly.

So I’m really proud to have been working with Madeleine King and other colleagues like Don Farrell to see this announcement come to fruition today. This means more rare earths production, it means a really important final investment decision, and it’s a non-binding commitment from the Australian Government.

Now, this Critical Minerals Strategic Reserve is something that we’re very proud of and we’re especially proud to see this development today and this announcement today because when Madeleine and the government, from the Prime Minister right down, did all of this work on the critical minerals Strategic Reserve, it was all about getting to these kinds of decisions, making sure that we make the most of this opportunity, making sure that we’re investing in our economic and national security.

Now, obviously, WA is absolutely front and centre when it comes to this kind of opportunity with big benefits for the top end as well. And so this is a really important day for WA industry and for the Northern Territory as well, but with big benefits for the country more broadly.

If you think about the budget that we handed down last Tuesday night, there are big benefits for WA in that budget from the 730,000 WA workers who will get another tax cut – the fifth tax cut under this government – whether it’s the extra $210 million to get more housing projects over the line in WA, whether it’s the 420,000 WA small businesses who are eligible for what is now a permanent instant asset write-off, there are very substantial benefits for WA in the budget that we handed down last week. That’s deliberate. We know that WA is such an important powerhouse of the national economy, and that’s why we’re here today – the Critical Minerals Strategic Reserve. That’s why we’re supporting WA workers and small businesses and first home buyers as well.

Now, we also – the last thing I’ll touch on before we take a couple of questions, today we got new data in our labour market. Nationally, the unemployment rate ticked up a bit as we have been expecting it to do, but we still created more than 1.2 million jobs in the four years that this government has been in office. Our labour market remains a very considerable source of strength when you consider what’s coming at us from around the world. So, to have unemployment in the mid-4s in the context of all of this global economic volatility, in the context of interest rate rises playing out in our economy, our labour market remains a very considerable source of strength even with the tick up that we’ve seen in the numbers today.

It’s also important to remember that unemployment in WA went down today. In Western Australia the unemployment rate went down even though it ticked up a bit nationally. The participation rate in WA ticked up as well. And that’s another really important reminder of just how crucial the WA economy is to our national economy and how central it is to the Albanese Labor government’s economic strategy. Happy to take a couple of questions.

JOURNALIST: The unemployment rate has come up faster than expected. Should that give the RBA cause for thought about putting interest rate rises on hold?

CHALMERS: I’m not going to give free advice to the independent Reserve Bank. There are good reasons why Treasurers don’t do that. They’ve obviously factor this in to the decision they take at the next opportunity. They’ll factor in all of the global uncertainty and all of the domestic conditions as well, including the unemployment rate. I saw the market expectations. They changed a bit since the labour force data came out, but I don’t want to engage in a running commentary on their considerations. We expected the unemployment rate to tick up a bit. That’s what we’ve seen today, even as it’s ticked down here in WA.

JOURNALIST: Treasurer, the elephant in the room with rare earths is China. Earlier this week, you moved to force six Chinese entities off the register of minerals. Are you considering stronger action, and does this deal with Arafura, part of the attempts to break that Chinese stranglehold on [indistinct]?

CHALMERS: Well, I’ll do whatever is necessary to protect the national interest when it comes to foreign investment. And we are reforming foreign investment so that we can strengthen it quite considerably where investments are concerning but to streamline it considerably where there is low-risk investments being proposed.

So, the steps that I’ve taken in relation to that investment are all about protecting the national economic interest. The decision I took was entirely consistent with the advice from the Foreign Investment Review Board and from Treasury.

Now, on the issues more broadly, obviously, I think as Darryl touched on and I’ve heard Madeleine talk about on a number of occasions, we want to make sure that these markets for our resources are operating effectively and in our interests. And Madeleine and I and other ministers do a heap of work with our international counterparts to make sure that the really important investments that Darryl and his colleagues are making are in markets that can work for us, not against us. And there has been some pricing activity in different resources markets, which has troubled us in recent years. We’ve been upfront about that and clear about that. And the Critical Minerals Strategic Reserve is part of our response to that.

JOURNALIST: In January, Treasurer, you took legal action against one of the entities and its director. The Federal Court imposed a $14 million fine. Has that been paid? And if it hasn’t, will you take further action to enforce payment?

CHALMERS: Look, we are always looking to make sure that the outcomes through the Foreign Investment Review Board process are adhered to. I’ll check on the status of the payment in the legal system. But what that decision that we took in the summer and the decision that I’ve taken in recent days reflects this government’s determination to protect the national interest when it comes to foreign investment. Foreign investment is, of course, for good in our economy if it’s consistent with our national interest, and where it isn’t, we’re prepared to take substantial steps to protect Australia’s interests.

JOURNALIST: [Indistinct] the northern minerals arrangement that wasn’t in the national interest?

CHALMERS: Well, I don’t want to go into the detail of legal and other advice that I get from time to time, except to say that the decision that I took was consistent entirely with the advice of the FIRB and the Treasury. There have been concerning elements of those investments for some time. We have, as we’ve been talking about, taken a number of fairly significant steps. And that’s because the foreign investment regime is built to serve Australia’s national interest and where they’re not serving Australia’s national interest Treasurers – and not just myself but subsequent Treasurers – have the ability, I think the responsibility to step in, via the legal system and in other ways to make sure that people are doing the right thing. And if they’re not doing the right thing, then you’ll see the sorts of steps and decisions that I’ve taken in recent times.

JOURNALIST: I mean, the concern was China, right?

CHALMERS: Well, the concern was around the nature of the investment. And we’ve been clear about that. I mean, this isn’t the first decision that we’ve taken in this regard. There have been a number of issues in relation to these investments. And where we are advised that there’s a problem, then we take substantial action to rectify that problem. Now, you know, there are legal elements to that, of course. We’re careful not to get in the way of any future developments on that front. But Australians should rest assured that in a foreign investment regime which is all about serving Australia’s national economic interest, we will do what’s necessary to make sure that that’s the case.

JOURNALIST: Is it possible for China to invest in companies like that consistent with Australia’s national interest?

CHALMERS: Our foreign investment regime is non-discriminatory. And there are types of investments which receive more scrutiny than others, but not based on the country that they’re coming from. We have made it clear on other occasions that whether it’s critical minerals, critical infrastructure and other things on the critical list, obviously that warrants and receives a bit of extra attention. But that’s not about the country that the investment is coming from; it’s about the nature of the investment and the nature of the investor.

JOURNALIST: [Indistinct] five of the six in Northern Minerals were, I mean, China.

CHALMERS: In this instance, what we have done is we’ve looked at the nature of the investment, not the origins of the investment.

JOURNALIST: On the issue of capital gains tax and negative gearing, if your policies didn’t work, say three years down the track, are you willing to reverse? Are you willing to look at options, do a bit of a U-turn or just [indistinct] along?

CHALMERS: We’re not anticipating that, and that’s because we’re making this change for the right reasons. The changes we’re making in the tax system are all about making it easier for people to buy their first home. It’s all about cutting taxes for more than 13 million Australian workers for the fifth time. And it’s also about better aligning the tax treatment of wages and salaries with income earned in other legitimate ways. So that’s our – those are our motivations here. We understand that some of these changes are contentious. Of course they are. We anticipated that. We anticipated our political opponents engaging in the usual scare campaigns built on lies. And we’re seeing that, too.

But we’ve taken these difficult decisions for the right reasons. We didn’t expect there to be unanimous support for them. But they’re the right thing to do for our economy. They’re the right thing to do by first home buyers. They’re the right thing to do for millions of Australian workers, who’ll get another tax cut from this government.

I might take three more.

JOURNALIST: What about those people who may have felt that they worked hard and they felt punished for it?

CHALMERS: We’re not making a judgement on people who’ve done well. We want more people to do well.

JOURNALIST: Pauline Hanson’s One Nation is about to announce its gas policy today – 10 per cent royalties for government co-investments like Norway. [Indistinct].

KING: Well, first, I would say Norway is not Australia. Australia has – we develop policies in the interests of Australia and Australian consumer and Australian manufacturers. So, you know, we as a government develop our policies with a focus on Australia, not Norway. I also note that Norway is very different to Australia. It’s a unitary system; not a federation. So some of the gas in Australia is from onshore – in fact, a lot of it is – and most of the gas that goes into the east coast supply is from hydraulic fracturing [indistinct] gas out of Northern Queensland. So – but that’s not the same situation in Norway. So, for One Nation to cherry-pick parts of a system of another country – and actually they’re not the only ones to be fair. The Australian Institute does it, many others do it as well. It just speaks to their lack of knowledge of our gas system and, by the sound of it, our political system as well.

JOURNALIST: [Indistinct] royalties from gas, though?

KING: The Queensland Government collects an awful lot of royalties from gas. The Western Australian Government does the same. And also the South Australian Government will look to the future as it develops more of its gas reserves. So we have already made our position clear on gas exports. What we are focused on as a government is making sure Australian consumers, Australian households, Australian businesses, Australian manufacturers get more of that gas at affordable prices well into the future.

JOURNALIST: If the Australian Government did have a say in gas projects, would it lead to better outcomes for Australians, though?

KING: Well, the thing is the LNG industry of Australia has developed over the last number of decades. So the best time for Australia to have invested in that part of the industry was 30 or 40 years ago. So that moment has passed. We cannot go backward. Also, I think there’d be many people in the country that don’t think Australia, an Australian Government should invest in the gas industry given the capital that it is able to bring to bear on projects. So we – there’s a regulation around the gas industry. We collect the PRRT, state governments collect the royalties.

JOURNALIST: Treasurer, it wouldn’t be a visit to WA without a question about the GST. Can I jump in on that?

JOURNALIST: Can I just ask one more –

CHALMERS: I’m going to do this one and then we’ll finish on this one and then we’re done.

JOURNALIST: Can I have one more to you, please, I promise. [Indistinct] Angus Taylor’s policy, should oil and gas projects be treated the same way as renewables when it comes to investments and approvals?

KING: Look, if I’m frank, it’s very hard to understand Angus Taylor’s policies at the moment. In one part of the country he’ll say one thing – and same with Pauline Hanson, for that matter. They’ll say drill, drill, drill, but then they’ll oppose the South Australian Government’s leadership in seeking to open up some parts of the gas available to South Australia. So I’m not quite sure what his policies are there. I would just say the hypocrisy of both One Nation and the Liberal Party are remarkable and now very, very obvious after their respective statements in South Australia this week.

CHALMERS: Okay, we’re going to go here then here and then we’re done.

JOURNALIST: Thank you. The Prime Minister said he always supports WA getting a fair share of GST. Is the currently arrangement WA’s fair share?

CHALMERS: Yes, it is. And the Prime Minister and I are huge supporters of WA getting its fair share. We’ve made that very clear. WA makes a massive contribution to the national economy and at every turn my job is to make sure that that contribution is recognised, including when it comes to making sure that WA gets a fair share of the GST.

JOURNALIST: Footage of an Israeli minister forcing some detainees to their knees, taunting them, including some Australians, Penny Wong has called it shocking. Can we get your reaction? And is there anything more that can be done to protect Australians that are there?

CHALMERS: I thought that was disgraceful. I thought that was shocking. And, you know, I agree with the comments that Penny Wong has made about it – there’s absolutely no need or no place for it. And, you know, when it comes to people who are engaged in that journey, obviously our departments tried to discourage people from going down that path. But having gone down that path, they should be treated humanely. And, you know, I can only imagine what it’s like to be a parent or a loved one of one of the people involved in that trip and to see them treat them – being treated that way I think is deeply disappointing. Thanks very much.