NSW approves critical mineral royalty deferrals
Sydney (7 July)
The NSW Government will allow Iluka Resources and Sunrise Energy Metals to defer mineral royalties linked to the Balranald mixed critical mineral mine and the Syerston scandium project, respectively, for five years upon launch.
NSW’s scheme is meant to ease cash-flow challenges for project developers, the Government said on 4 July. Iluka and Sunrise Energy will need to pay back all deferred royalties, the Government added.
“For critical minerals projects, improving cash flow during the early stages of production can make the difference between a project proceeding and remaining on the drawing board,” Association of Mining and Exploration Companies (AMEC) CEO Warren Pearce said.
Iluka has partially opened Balranald and will ramp up the mine to a steady state by mid-2026, the company said in a quarterly report on 22 April. Sunrise Energy’s Syerston project is at an earlier stage and is set to open in mid-2028, according to the NSW Government.
NSW’s royalty relief programme is more generous than similar schemes in other regions. WA’s government offered nickel producers repayable rebates – worth 50% of their royalties – from March 2024 until September 2025.
In August 2025, the Queensland Government also chose to honour a coal royalty deferral agreement struck by a previous government with Indian-owned producer Bravus, in exchange for investment commitments. But the Government has ruled out further deferral deals with coal producers.
NSW’s support for Iluka also comes on top of existing Federal Government support for the company. The Australian Government has agreed to loan Iluka up to A$1.65 billion – at a 3% premium to floating rates – to fund its Eneabba rare earth refinery in WA.
Iluka’s Eneabba refinery and Arafura Rare Earths’ Nolans project are the only planned Australian rare earth refineries funded for construction. Iluka plans to use rare earth ore from its Balranald mine as feedstock for the refinery.
Australia has zero operational rare earth oxide plants. But Australian producer Lynas uses rare earth feedstock from its Mt Weld mine in Western Australia to produce a suite of oxides at its Malaysian refinery.
By Avinash Govind