BHP boss Mike Henry says governments will stoke investment more sustainably through policy reform than by handing out subsidies that distort markets.
for “critical minerals” ventures risks distorting markets, and governments could achieve a broader benefit by speeding up project approvals rather than giving “sugar hits” to individual projects.
The federal government has earmarked $2.5 billion of taxpayers’ funds for critical minerals projects, with $1.25 billion of that loaned to Iluka Resources for the construction ofthat government subsidies for mining projects were warranted in certain circumstances, but could distort markets by boosting uncompetitive projects if distributed recklessly.
“Provision of a subsidy here may disincentivise investment in a project that is actually more economic based on its fundamentals in another jurisdiction.” “In order to address that you have got to address all the politics associated with it, so I acknowledge it is harder, but actually that focus should be much higher than deploying a bit of funding here and there,” he said.Critical minerals are likely to be on the agenda today when Mr Henry and other business leaders meet with major Japanese conglomerates including Mitsubishi and Mitsui at the Australia Japan Business Co-operation Committee conference in Melbourne.
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