Aussie billions open to the world

Chinese-owned Tianqi Lithium is high on the list of foreign companies set to access billions under the Australian Government’s new Critical Minerals Production Tax Incentive.

The incentive is worth almost $32 billion, with $13.7 billion set aside over the next decade to continue to fund the initiative.

Tax credits from the incentive are to be made available to overseas downstream processing companies that pay tax in Australia.

According to The Australian Financial Review (AFR), consultation papers on the tax credits issued by Treasurer Jim Chalmers on Friday detailed the scheme’s draft eligibility criteria.

Tianqi has been vocal in its calls for incentives to be made available to those who contribute to the Australian economy.

“A lithium hydroxide conversion plant like our business definitely requires and deserves a tax credit,” Tianqi chief executive Frank Ha told the AFR.

Tianqi closed out last week by providing a $159.3 million dividend payment to IGO following the draw down of spodumene concentrate stockpiles at the Greenbushes mine in Western Australia.

The total dividends received by IGO from Tianqi for the 2023–24 financial year (FY24) now sits at a healthy $761.4 million.

“The substantial dividend IGO has received from Tianqi during FY24, during a period of heightened market volatility and complexity, is testament to the value our lithium business can generate through the cycle,” IGO managing director Ivan Vella said.

“We are continuing to work with our partners at Tianqi and Albemarle to grow the value generated from Greenbushes for the benefit of all shareholders.”

Despite a shaky few months for the lithium sector, IGO is weathering the storm thanks to continued income from its joint venture with the Chinese national.

Under the new tax credit scheme, Tianqi would be able to claim 10 per cent for its onshore downstream processing.

Tianqi and IGO combined forces in 2021 to form Tianqi Lithium Energy Australia (TLEA), which holds a 51 per cent stake in the Greenbushes operation alongside Albemarle, as well as 100 per cent ownership of the Kwinana lithium hydroxide refinery.

Though the new eligibility criteria is yet to be implemented, government support for Tianqi – which will also include Albemarle – would directly benefit IGO and the WA economy.