Victoria's new Critical Minerals Roadmap

A positive step towards the development of local industry 6 min read

In early December, the Victorian Government announced a series of measures designed to reinvigorate Victoria's economy and encourage business investment in the state. Among these announcements was the release of the new Victorian Critical Minerals Roadmap (the Roadmap), targeting further development of the industry in Victoria to take advantage of the state's critical minerals deposits.

The Roadmap is an encouraging sign of Government support for the development of critical minerals projects and a recognition of some of the challenges proponents face including, in particular, a slow and uncertain approvals process. It also highlights the Government's vision of Victoria as a leading supplier of 'ethically-sourced' critical minerals through equitable sharing of benefits between local communities, Traditional Owners and proponents, and the maintenance of high environmental standards.

This Insight provides an overview of the Roadmap and some of its key initiatives.

Key takeaways

• The Roadmap sets out an ambitious vision for developing the critical minerals industry in Victoria, centred around four guiding themes: mapping the opportunities; a modernised regulatory regime; production and processing; and sharing the benefits.
• It includes several concrete initiatives that the Government proposes to implement over the next 12 months across these four themes as well as possible longer-term initiatives. The Roadmap is intended to be a live document that will be reviewed and adapted to changing circumstances.
• Importantly, the Roadmap outlines several actions that the Government is already taking or will implement in the short term to streamline and reduce uncertainty in the approvals process for critical minerals projects.
• It also contemplates developing a community benefit sharing model, and inviting Traditional Owners to co-design a benefit sharing model, in the short term.
• There is some uncertainty about how the Government plans to balance sometimes competing objectives in the Roadmap – for example, encouraging investment while ensuring equitable sharing of benefits between proponents, local communities and Traditional Owners. However, overall, the indication of support from the Government is a positive step in the industry's further development in Victoria.

Background

Victoria is the latest Australian jurisdiction to recognise the importance of facilitating the development of local critical minerals and strategic materials resources to support the transition to a carbon net-zero economy and, in the case of critical minerals, secure diversified supply.

Although it garners little public awareness, Victoria holds significant deposits of critical minerals and strategic materials (in particular, in the northwestern and central regions). The Victorian Government estimates the value of Victoria’s critical minerals endowment to be approximately $200 billion and that a local critical minerals industry could support up to 7,000 jobs.¹

Overview of the Roadmap

The Roadmap sets out the Government's vision for a 'strategically and economically important critical minerals industry' in the state. In particular, the Government envisages a 'world-leading ethical critical minerals sector' that:

• has timely approvals for development;
• delivers significant economic benefits for regional communities;
• is environmentally responsible;
• creates opportunities for future downstream industries; and
• forms strong and lasting partnerships with local communities and Traditional Owners.

As the Roadmap is intended to be a live document that is reviewed and updated at regular intervals, it focuses on concrete actions to be undertaken in the short term while outlining possible future initiatives to be considered at a later date.

Deep dive – four core themes

The actions that the Government proposes to undertake over the next 12 months and possible future initiatives are centred across four themes, which are explored below.

Mapping the opportunities

The first theme promises to modernise geoscience data and to use geological mapping to assist in identifying new critical minerals opportunities, with land use assessments identifying future areas for development, referred to as 'Critical Minerals Priority Development Zones' (Priority Zones). The Victorian Government has established a whole-of-government critical minerals taskforce, led by Resources Victoria, to coordinate the Government's actions in Priority Zones, including approvals facilitation and community consultation to drive faster development. A strategic land use assessment pilot program is currently underway in north-west Victoria to define mineral sands Priority Zones. The Roadmap flags that, based on this first pilot, in the short term, the Government will also commence a strategic land use assessment potential to identify a Priority Zone for antimony projects in central Victoria.

In addition, within the next 12 months, the Government intends to develop a policy regarding when the Minister will exercise their powers under section 7 of the Mineral Resources (Sustainable Development) Act 1990 (Vic) (MRSD Act) to designate areas as exempt from minerals exploration and development. The powers granted under section 7 are broad and entitle the Minister to exempt land for any reasons they decide to be appropriate. However, in making such a decision, the Minister must take into account the known or potential value of the resources, the impact that the proposed exemption may have on that value, and the social and economic implications of the decision. We expect that this policy will be of interest to those assessing the viability of potential development opportunities, as it will provide greater certainty regarding when the Minister is likely to exercise these powers.

Modernised regulatory regime

The Roadmap outlines several key initiatives and reforms aimed at streamlining and improving the approvals process for mineral exploration and mining projects. This is a welcome development, as approval timeframes for exploration activities in Victoria lag those in other mining jurisdictions and a lack of transparency in the approval process has been cited as a key deterrent for investment.²

This will primarily be delivered through the implementation of reforms in the Mineral Resources (Sustainable Development) Amendment Act 2023 (Vic) (MRSD Amendment Act), which will commence by 1 July 2027. These reforms introduce a duty-based model for regulation, which imposes a duty on a licence or work authority holder to eliminate or minimise, as far as reasonably practicable, the risk of harm to the environment, the public, land, property or infrastructure by its exploration, extractive industry, mining or rehabilitation of land or related activities (the breach of which will be an offence). The licence or work authority holder will not be able to commence work until the department head has determined whether the risk level for the licence or authority is lower, moderate or higher which, in turn, determines the obligations with which the holder must comply. The existing requirement to lodge work plans will no longer apply, however rehabilitation plans will continue to be required for moderate or higher-risk operations. Rehabilitation for lower-risk operations will need to be undertaken in accordance with a compliance code made under the Act. Although these reforms are intended to reduce the time and administrative burden of the existing approvals processes, largely by removing the work plan approval process, whether they are effective in doing so will depend on the details of their implementation.

Importantly, the Roadmap also indicates that the Government has committed to reforming the Victorian Environment Effects Statement process to facilitate accelerated approvals, with a targeted timeframe of no longer than 18 months for assessment under that process as a result of sharper assessment scopes and the provision of extra support to proponents.

Further, the Government has extended Resources Victoria Approvals Coordination (RVAC), a division of Resources Victoria, until 2027 so that it can continue, through its case management role, to assist with reducing the uncertainty associated with earth resources development approvals. It is not clear whether RVAC will continue to focus, in the mining workstream, on critical minerals and gold given the Roadmap also provides for the establishment of a new Critical Minerals Coordination Office (CMC) within Resources Victoria within the next 12 months with responsibility for all critical minerals project approvals. It may be that the CMC assumes responsibility for critical minerals projects while RVAC continues to be responsible for gold resources. The Roadmap does not include any further detail regarding the division of responsibility between the two offices.

Overall, these initiatives are designed to provide clearer regulatory pathways, reduce administrative burdens, ensure timely project approvals and maintain high environmental standards while fostering responsible investment in Victoria's critical minerals sector.

Local production and processing

Across Australia, industry participants and governments have sought to explore opportunities to develop downstream critical minerals processing and end-use manufacturing capabilities. If done right, there are clear economic, security and environmental benefits that can be achieved through this. The Roadmap promises to continue to investigate these opportunities. This is a promising show of support, and industry participants will keenly await the announcement of any initiatives to navigate the challenges that Australia faces in competing with other jurisdictions for future investment in production and processing, including relatively higher labour costs and more stringent environmental regulation.

Sharing benefits

The Victorian Government has also indicated its intention to design 'benefit sharing models' involving regional communities and Traditional Owners. These benefits are stated to be both financial and non-financial. The Roadmap sets out key principles underpinning these proposed models, including that the benefits of Victoria's mineral wealth should be shared equitably, and that these benefits include tangible and non-tangible opportunities. These models may, for example, encompass environmental protection, the building of a local workforce to support the development of the industry, and other means of enriching local areas. Investment in projects located in regional areas will undoubtedly contribute to local communities through employment and training opportunities and increased economic activity. It remains to be seen how the Government intends to balance these potentially competing benefit sharing objectives with the desire to create an attractive investment environment for proponents.

Continuing a trend of government support

This latest announcement continues the trend we have observed in recent times of increasing government support across Australia and globally for the development of the critical minerals industry, including:

• governments globally, including Australia's, have engaged in government-sponsored initiatives to secure diversified supply of critical minerals;
• the New South Wales Government released its Critical Minerals and High-Tech Metals Strategy 2024–35, including a centrepiece announcement of a $250 million royalty deferral initiative for critical minerals projects;
• the Western Australian and Federal Governments announced initiatives to support critical minerals investment, namely Western Australia’s Battery and Critical Minerals Strategy 2024-2030, and support for the critical minerals industry in the recent Federal Budget; and
• similarly, the unveiling of Queensland's Critical Minerals Strategy contained $245 million in initiatives aimed at unlocking Queensland's critical minerals industry.

This is a promising trend that we expect to see continue given the challenges the volatility inherent in the markets for critical minerals present in developing projects and obtaining funding sources.

Next steps

The Victorian Government's Roadmap is a step in the right direction to encourage investment in critical minerals projects in the state. Stakeholders at all stages of the critical minerals value chain – be they explorers, producers, financiers or otherwise – are likely to benefit from these initiatives.

However, given the significant regulatory changes to be implemented under the MRSD Amendment Act and the need to balance the potentially competing interests of proponents, local communities and Traditional Owners, time will tell how effective the Government's proposed policy changes are at attracting investment in the exploration and development of the state's critical minerals resources.