SALLY SARA, HOST: The Prime Minister Anthony Albanese is leaving Washington DC following a face-to-face meeting with US President Donald Trump at the White House. The meeting saw the Australian Government secure a multibillion-dollar critical minerals deal designed to combat China’s global dominance in the sector as well as reassurances from the President that the United States will go “full steam ahead” on the AUKUS defence pact. 

Tim Ayres is the Federal Minister for Industry and Innovation and took part in the meetings at the White House and joins me now from the United States. So, Minister, welcome back to Radio National Breakfast. 

SENATOR TIM AYRES, MINISTER FOR INDUSTRY AND INNOVATION AND MINISTER FOR SCIENCE: G’day, Sally. Good morning to the RN Breakfast audience. 

SARA: What can you tell us about these critical minerals deals and the timeline of these projects? 

AYRES: Well, there’s, of course, the critical minerals bilateral deal between Australia and the United States signed off by Anthony Albanese and President Trump yesterday Washington time. But there’s also a series of practical, real outcomes. Alcoa in Western Australia will be producing, their CEO told me at lunchtime today – gallium in Western Australia next year. So practical, real-world outcomes that deliver jobs and investment in regional Australia. So practical Future Made in Australia projects. 

There’s an $8.5 billion pipeline of projects that are either signed up to or in the process of being delivered, and that is just the start of delivery on this bilateral arrangement that will secure, you know, jobs and investment in critical minerals production in Australia. 

SARA: So will this be supporting the processing of critical minerals, some of which already happens in processing facilities for other minerals, or what about standalone facilities for the processing of critical minerals?

AYRES: Well, there’s a bit of both. You’re right to point to the facilities like the Port Pirie Nyrstar facility where the Albanese Government and the South Australian Malinauskas Government have stepped in to support that lead smelter facility which will now in addition be producing antimony. At the end of the two-year step-up they will be producing 5,000 tonnes of antimony every year. That is equivalent – they sound like small numbers, but that is the equivalent of 40 per cent of the United States’ offtake of antimony every year. So in some cases standalone projects. In some cases where it’s cheaper and more effective what it does is adds to the long-term viability of smelters like the Port Pirie smelter. 

SARA: For how many years ahead will taxpayer funds be used to support the critical minerals industries, particularly processing? How long will this go on for? 

AYRES: Well, some of these are equity stakes, so the most recent arrangements are equity stakes in these propositions to crowd in private investment and deliver these projects. Of course, there are production credits that are part of the Future Made in Australia program, tax credits or production credits. This is getting Australia to the top table in investment in manufacturing capability. That’s the truth of it. We are – Australia has enormous natural advantages, but in order to make sure that we secure the investment now rather than hope for the best for the future, it does require an active government partnering with the private sector. That’s what Future Made in Australia about, not just – 

SARA: So return to the question, for how many years ahead – whether it’s through equity or other means – for how many years ahead will the Australian taxpayer need to be putting money into the critical minerals sector? 

AYRES: Yeah, well, let me give you an example, Sally. For example, in aluminium, it will be for 10 years or up to 2040, whatever is the – 2044, whatever is the latest. For some of these projects it’s a 10-year commitment. These initial projects, though, are equity injections from the Commonwealth Government. In Western Australia, equity from the Commonwealth Government, the government of the United States and the government of Japan alongside the private investment there. This is how we secure the investment in Australia. Otherwise it goes somewhere else and Australia’s position would be less economically resilient, less jobs in the outer suburbs and the regions. 

SARA: Has the government modelled the environmental impact of this deal? 

AYRES: Well, each of these projects will have to, of course, satisfy all the relevant environmental approvals. There’s no free pass on those questions. Of course, we want to see faster processes, you know, more effective processes. Murray Watt, the environment minister, is bringing those reforms to the parliament. But all of these projects will need to satisfy all the normal Australian rigorous environmental approvals that are necessary to secure – 

SARA: So we don’t know upfront what the environmental impact will be? 

AYRES: Well, they will have to satisfy the environmental approvals. We don’t know that of, you know, a supermarket development or a mining development or a housing development until it’s gone through the approval processes. These projects all stand on their own merits. But I’m very confident that, for example, this Alcoa project, which is at an industrial facility now, you know, it will contribute an enormous amount. I’m very confident about the trajectory of these projects. That’s why the government’s backing them in. We want to see an industrially capable, more resilient, self-reliant Australia that is projecting more weight and capacity into global supply chains. That’s what this is all about – good blue-collar jobs – and that’s why we’re putting our shoulder behind the wheel here. 

SARA: I spoke this morning to the Swedish State Secretary for International Trade who’s in Sydney attending a mining and resources conference. Sweden is very keen on our critical minerals. Who will decide who can buy these critical minerals that are being processed in Australia? Is that a decision solely for Australia or will the US also have a say? 

AYRES: These are sovereign Australian decisions. This is a bilateral arrangement with the United States which will secure more investment in Australia. Of course we’re all about diversification here, Sally. This is industrial – 

SARA: So the US won’t get a say on where these are exported, even though it’s channelling in some money? 

AYRES: These particular projects, of course there are offtake arrangements associate with these. But Australia is a vast continent full of critical minerals opportunity. You know, almost all of the critical minerals that the world needs for communications technology, computer chips – 

SARA: But to return to the question: will Australia have the sole decision-making powers on where these critical minerals which are being processed in Australia, where they will be sold? 

AYRES: Future partnerships, we are open for business for manufacturing, and the government will support investment in new industrial capability all through Australia’s mineral and resources regions. Of course these projects – 

SARA: But to return to the question: will Australia have sole decision-making power on where these critical minerals that are processed in Australia will be exported? 

AYRES: Of course. These are Australian projects. 

SARA: So Australia will have the sole decision-making capability? 

AYRES: Yes. Yes, these particular investments, of course, there’ll be offtake arrangements that are associated with these. Our United States and Japanese partners, for example, and Alcoa will be extracting manufactured gallium from this project. That’s absolutely right. 

SARA: So will the US have the right to say, “Don’t export to this particular country”? 

AYRES: Well, this individual project is a commercial project. It will have an offtake agreement that secures the commercial viability of that project. There will be other gallium projects in Australia. Those will be commercial arrangements – 

SARA: So as a funding party, the US might get to decide those offtake arrangements? 

AYRES: Well, all of them will stand on their own merits, Sally. This is all upside here. This is all upside for Australian manufacturing. More diversity, not less, is what we’re about.

SARA: So just to be clear, will the Federal Government have the only say on where these exports – where these critical minerals are exported, or will countries like the US that are putting up money, will they get to have a say on where these go? 

AYRES: Well, this is a project that is supported by the United States and by Japan in this particular instance. Of course they will expect, anticipate and have delivered products for their markets. That’s why they’re investing in the project.

SARA: But third parties? 

AYRES: But we’re about more diversity. Well, let’s see how much it produces, how much volume there is. The point is, Sally, is we’re starting out an enormous venture here in the Australian national interest that will create more jobs and economic diversification, not less. At the moment – at the moment – rare earths and critical minerals are extracted from Australia. There is precious little manufacturing of those products in Australia, and largely they go – just like the projects all around the world – into one market. We’re about more diversification, more supply chain security and more value-add and manufacturing in Australia. 

SARA: You’re listening to Radio National Breakfast. My guest is the Minister for Industry and Innovation, Tim Ayres, who’s preparing to return from the United States and from the discussions at the White House and elsewhere. The UK was able to negotiate a reduction on steel and aluminium tariffs. Why wasn’t Australia able to secure that? 

AYRES: Well, we’ve got the lowest broader tariff rates of any economy around the world. Of course, as we’ve indicated at prime ministerial level and ministerial level and official level, publicly in every way that you could to the United States administration that we believe that the appropriate reciprocal tariff arrangement with Australia would be zero. That goes for the 10 per cent broader rate and the impact of tariffs in steel and aluminium. We’ve made that case. We’ll continue to make that case. We’ve, of course, made it this week. Jim Chalmers, the Treasurer, was here in Washington last week making exactly the same points. We are for free and fair and open trade and a rules-based approach to trade. 

But you’d have to say for Australia, we have got the best arrangement of any economy in the world. We’ll keep making the argument. I’m not surprised that the administration, that the Trump administration here has, you know, not deviated from their position. But we’ve got a very good outcome for Australia so far, and we’ll keep pressing the case. 

SARA: Minister, thank you so much for your time this morning. 

AYRES: Good on you, Sally. Thanks. 

SARA: That’s Minister Tim Ayres, Minister for Industry and Innovation.