Several ASX materials shares will receive $50 million in grants from the Australian Federal Government, according to an announcement this afternoon.
The release said the grants would help the government reach its net zero ambitions by 2050. They would also "bolster development across Northern Australia, generate new jobs and drive regional economic growth".
Minister for Resources and Minister for North Australia Madeline King, made the following comments:
Australia has the potential to become a major global supplier of critical minerals and rare earths which will be essential to help Australia and the world transition to low-emissions technology and achieve net zero emissions by 2050.
The grants will accelerate early and mid-stage projects, driving new investment in our processing and manufacturing capabilities as we develop our critical minerals sector.
King said Australia's vast reserves of critical minerals were "crucial" to the production of batteries and electric vehicles, as well medical equipment, defence, aerospace, automotive and agritech industries. She added:
These junior projects, should they be successful in scaling up to full production, will help diversify global critical minerals supply chains.
Image source: Getty Images
Which companies will receive grants?
A total of six companies will receive part of the $50 million in funding.
The companies include:
- Alpha HPA Ltd (ASX: A4N): $15.5 million for its "ultra-pure" aluminium chemical plant in Gladstone, Queensland
- Cobalt Blue Holdings Ltd (ASX: COB): $15 million for its Broken Hill Cobalt project in New South Wales.
- EQ Resources Ltd (ASX: EQR): $6 million for tungsten production and to restart production at its Mount Carbine site in Queensland
- Global Advanced Metals Pty Ltd: $4 million for its recovery plant in Western Australia
- Lava Blue: $5.24 million for developing modular re-processing technology
- Mineral Commodities Limited (ASX: MRC) $3.94 million to develop its integrated ore-to-battery anodes business
What will the grants produce?
Materials investors may well be hoping the grants will bring new life to the materials sector amid China's fears of a slowdown in economic activity.
While ASX lithium shares are doing what they can to keep S&P/ASX 200 Materials Index (ASX: XMJ) above water, which is down 9.51% year to date, some other materials are falling far behind.
Iron ore has been hit especially hard due to China's real estate crisis, and precious metals gold and silver are suffering from a stronger US dollar.
On the positive front, ASX graphite shares are emerging as an alternative to lithium, and copper's outlook was recently upgraded for the long-term.
