The Western Australian state government has capped the vanadium royalty rate at 2.5 per cent, in a move to incentivise production of the critical mineral in the state.
The royalty rate will be applied to all vanadium products and will support vanadium developers in Western Australia, which has some of the world’s best vanadium deposits.
The revised framework also maintains the current royalty rate of zero for the midstream production of vanadium electrolyte used in the manufacturing of vanadium batteries.
Western Australian Minister for Mines and Petroleum David Michael said the new rate delivers a major election commitment that will support jobs and emerging industries.
“This move will give industry players the financial confidence and certainty to make the significant investments required to see their projects come to fruition,” Michael said.
“This certainty is something the industry has requested, and the Cook Government has agreed and delivered.”
The government said the new royalty rate aligns with plans to install Australia’s first locally built utility-scale vanadium battery in Kalgoorlie.
The government will also work with the private sector to develop a local vanadium electrolyte production and battery assembly industry in Kalgoorlie.
Meanwhile, the Association of Mining and Exploration Companies (AMEC) welcomed the revised royalty framework, saying it improves project viability while strengthening the state’s position in critical minerals and energy storage supply chains.
AMEC CEO Warren Pearce said the new royalty rate delivers much-needed support for developers and investors.
“The royalty change aligns with the state’s desire to strengthen domestic battery capabilities, as it continues to phase out coal-fired power stations.
“With Western Australia hosting some of the world’s most prospective vanadium resources, this important mineral underpins long-duration energy storage and supports broader decarbonisation and grid stability objectives.”
AMEC said the royalty rate responds directly to industry concerns raised by the industry body, which emphasised the need for certainty, consistency across the value chain and settings that encourage downstream processing and midstream production.
“This reform sends a positive message to investors that Western Australia understands the commercial realities facing critical mineral developers and is prepared to adapt long-standing frameworks to support emerging industries,” added Pearce.
