New South Wales’ critical minerals royalty deferral scheme has moved from policy setting to production support, with Iluka Resources’ Balranald project and Sunrise Energy Metals’ Syerston scandium project becoming the first two projects to take up the Australia-first program.
Together, Balranald in the Murray Basin and Syerston in the Central West are slated to unlock $776 million in capital investment. But the broader importance of the announcement is in where that support is being applied.
Rather than backing early exploration alone, the scheme is designed to ease the cash flow burden during the high-cost ramp-up period, when critical minerals projects move from development into commissioning, construction and early production. It gives the state (NSW) a more direct lever to help advanced projects bridge the gap between resource potential and commercial supply.
Iluka’s Balranald project is currently being commissioned, while construction at Syerston is expected to commence in the second half of 2026, with production starting in mid-2028.
Under the scheme, royalties are deferred for five years but still need to be paid in full by the mine’s owner, which means the support is not a waiver of future royalty revenue but a timing mechanism aimed at improving early project economics.
That mechanism is important in a critical minerals sector where converting potential into production can hinge on the early years of a project, when capital requirements, technical risk and market development can be most demanding.
Iluka chief operating officer Shane Tilka said Iluka appreciates the NSW government’s support and that the scheme “recognises” the significant capital and technical investment required to bring new critical minerals projects into production.
“Support of this kind is particularly valuable during the ramp-up phase, when projects are transitioning from development into steady-state operation,” he said.
“Commencing mining at Balranald is an important milestone for Iluka and the culmination of more than 15 years of research and development.
“Balranald will produce premium zircon, natural rutile, ilmenite and rare earth-bearing mineral concentrates that will feed our processing facilities and supply our customers for the next decade.”
Looking closer, Balranald will produce zircon, rutile, ilmenite and rare earths, which are all essential for the advanced manufacturing of clean energy products such as electric vehicles and wind turbines, solar panels, batteries, and high-performance industrial materials.
The project also reflects Iluka’s broader move further along the critical minerals value chain. The company is developing a fully integrated rare earths refinery at Eneabba in Western Australia, while Balranald’s minerals will be processed onshore in Australia. The project is forecast to generate $153 million in royalties and support 270 ongoing jobs over the life of the mine.
For Sunrise, the deferral adds another layer of government support to a project that has already attracted international attention.
Syerston’s scandium oxide plays a large role in advanced technologies including 5G and 6G communications, semiconductors, defence applications, and fuel cell technologies, strengthening Australia’s role in supply chains that extend beyond battery minerals and into aerospace and defence manufacturing.
Previously, US defence and aerospace contractor Lockheed Martin had agreed to purchase up to 25 per cent of the scandium expected to be produced from Syerston, underscoring why the NSW project carries significance beyond state borders.
The Syerston project is forecast to generate $200 million in capital investment, $113 million in royalties and support 59 ongoing jobs over the life of the mine.
Sunrise managing director Sam Riggall said that he and the team are delighted to be accepted into the scheme.
“The scandium we will mine in Australia will become a cornerstone for global supply chains, critical to civilian and defence applications,” he said.
“We thank the New South Wales government for its support and look forward to delivering a project that generates benefits for the state of New South Wales and the local community.”
The state’s Minister for Natural Resources Courtney Houssos said that the approval of the two projects under the scheme is an “important next step” in delivering local jobs.
“By supporting projects through the high-cost early stages of development, we are helping unlock investment, create regional jobs and strengthen supply chains that are critical to the future global economy,” she said.
Chief executive officer of the Association of Mining and Exploration Companies Warren Pearce said that the announcement demonstrates what can be achieved when governments work with industry to unlock investment.
“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,” he said.
The first uptake of the scheme creates a test case for the state; if Balranald and Syerston can move through ramp-up and construction as planned, the deferral model could give the state a template for converting its critical minerals pipeline into producing assets.
