A Centrepiece in Strengthening Australia’s Role in Global Rare Earth Supply Chains amid China’s New Mineral Export Policies
China has recently further tightened its export-control policies on key rare earths and critical minerals, introducing new licence requirements and expanding oversight of materials containing Chinese-origin rare-earth content. Five additional rare earth elements — holmium, erbium, thulium, europium, and ytterbium — have been added to the export control list, making China now controls 12 out of 17 rare-earth elements.
Beijing’s measures reflect its long-term approach to resource sustainability and technology protection. For other major economies, these developments highlight the growing importance of supply-chain diversification and international collaboration in securing access to minerals vital for clean energy and advanced manufacturing.
Against this backdrop, Australia is stepping forward with a strategic response — centred on the recently legislated Critical Minerals Production Tax Incentive (CMPTI) and deepening bilateral cooperation with the United States following the Albanese–Trump meeting in Washington.
At Infinity Solution Tax Plus, our specialised accountant in Box Hill will continue to bring you the latest updates on tax legislation, policy, and industry developments.
What is the Critical Minerals Production Tax Incentive?
The CMPTI, legislated under the Future Made in Australia (Production Tax Credits and Other Measures) Act 2025, is a cornerstone of Australia’s policy to foster investment in downstream processing and refining.
Royal Assent: 14 February 2025
Effective period: from income years starting 1 July 2027 to 30 June 2040
Incentive: a 10 % refundable tax offset on eligible processing and refining expenditure
Eligibility: Australian tax-resident companies or foreign entities with a permanent establishment in Australia conducting approved critical-mineral processing activities
Maximum duration per project: up to 10 consecutive income years
This tax credit encourages companies to refine critical minerals domestically rather than exporting unprocessed ore, positioning Australia as a reliable supplier of high-value materials such as battery-grade lithium, nickel, and rare-earth oxides.
How does the incentive work?
Eligibility and registration
- Processing facilities must be registered under the CMPTI scheme.
- The mineral feedstock must be from the government’s Critical Minerals List and the processing must substantially transform the feedstock.
- Companies must comply with transparency and community-benefit requirements.
Claiming the offset
- Claims are submitted annually via company tax returns.
- The offset is refundable — if the tax offset exceeds tax payable, the excess is paid as a refund.
- Each project can claim for up to 10 consecutive income years within the 2027–2040 window.
Who Benefits from the CMPTI?
Industry participants
- Companies investing in downstream processing (battery-metals, rare-earth separation, alloy production) stand to benefit most from the offset.
- Projects that capture value through refining and transformation rather than simple extraction will be advantaged.
Geographic and supply-chain implications
- Regions such as Western Australia, Queensland and the Northern Territory are well-positioned to host processing hubs, creating jobs and infrastructure.
- International partners and customers (notably the U.S., Japan, South Korea) gain access to diversified and resilient supply chains.
Final Thoughts
Sienna Jiang, Managing Director at Infinity Solution Tax Plus, shared her view on this:
“China’s recent export-policy adjustments reflect a maturing approach to managing its critical-mineral sector and technology supply strategically. For Australia, these developments underscore the opportunity to complement — not compete with — global supply through transparent, sustainable, and technologically advanced production.”
The Critical Minerals Production Tax Incentive (Critical Minerals Tax Credit), reinforced by the Albanese–Trump partnership, creates the right foundation for Australia to build a modern, resilient, and internationally aligned mineral-processing industry.
To assess your business’s eligibility or plan strategically for Australia’s new production tax credit, or to access tailored tax solutions for individuals and small businesses, contact Infinity Solution Tax Plus – your trusted tax accountant in Box Hill specialising in tax planning, compliance, business strategy, and investment advisory.
Disclaimer: The information contained in this article is general in nature and does not constitute financial or taxation advice. You should seek advice tailored to your specific circumstances from a registered tax or financial adviser.
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