Author: MIL-OSI Publisher

Source: Allens Insights (legal sector)

A positive step towards the development of local industry 6 min read

In early December, the Victorian Government announced a series of measures designed to reinvigorate Victoria’s economy and encourage business investment in the state. Among these announcements was the release of the new Victorian Critical Minerals Roadmap (the Roadmap), targeting further development of the industry in Victoria to take advantage of the state’s critical minerals deposits.

The Roadmap is an encouraging sign of Government support for the development of critical minerals projects and a recognition of some of the challenges proponents face including, in particular, a slow and uncertain approvals process. It also highlights the Government’s vision of Victoria as a leading supplier of ‘ethically-sourced’ critical minerals through equitable sharing of benefits between local communities, Traditional Owners and proponents, and the maintenance of high environmental standards.

This Insight provides an overview of the Roadmap and some of its key initiatives.

Key takeaways

• The Roadmap sets out an ambitious vision for developing the critical minerals industry in Victoria, centred around four guiding themes: mapping the opportunities; a modernised regulatory regime; production and processing; and sharing the benefits.
• It includes several concrete initiatives that the Government proposes to implement over the next 12 months across these four themes as well as possible longer-term initiatives. The Roadmap is intended to be a live document that will be reviewed and adapted to changing circumstances.
• Importantly, the Roadmap outlines several actions that the Government is already taking or will implement in the short term to streamline and reduce uncertainty in the approvals process for critical minerals projects.
• It also contemplates developing a community benefit sharing model, and inviting Traditional Owners to co-design a benefit sharing model, in the short term.
• There is some uncertainty about how the Government plans to balance sometimes competing objectives in the Roadmap – for example, encouraging investment while ensuring equitable sharing of benefits between proponents, local communities and Traditional Owners. However, overall, the indication of support from the Government is a positive step in the industry’s further development in Victoria.

Background

Victoria is the latest Australian jurisdiction to recognise the importance of facilitating the development of local critical minerals and strategic materials resources to support the transition to a carbon net-zero economy and, in the case of critical minerals, secure diversified supply.

Although it garners little public awareness, Victoria holds significant deposits of critical minerals and strategic materials (in particular, in the northwestern and central regions). The Victorian Government estimates the value of Victoria’s critical minerals endowment to be approximately $200 billion and that a local critical minerals industry could support up to 7,000 jobs.¹

Overview of the Roadmap

The Roadmap sets out the Government’s vision for a ‘strategically and economically important critical minerals industry’ in the state. In particular, the Government envisages a ‘world-leading ethical critical minerals sector’ that:

• has timely approvals for development;
• delivers significant economic benefits for regional communities;
• is environmentally responsible;
• creates opportunities for future downstream industries; and
• forms strong and lasting partnerships with local communities and Traditional Owners.

As the Roadmap is intended to be a live document that is reviewed and updated at regular intervals, it focuses on concrete actions to be undertaken in the short term while outlining possible future initiatives to be considered at a later date.

Deep dive – four core themes

The actions that the Government proposes to undertake over the next 12 months and possible future initiatives are centred across four themes, which are explored below.

Mapping the opportunities

The first theme promises to modernise geoscience data and to use geological mapping to assist in identifying new critical minerals opportunities, with land use assessments identifying future areas for development, referred to as ‘Critical Minerals Priority Development Zones’ (Priority Zones). The Victorian Government has established a whole-of-government critical minerals taskforce, led by Resources Victoria, to coordinate the Government’s actions in Priority Zones, including approvals facilitation and community consultation to drive faster development. A strategic land use assessment pilot program is currently underway in north-west Victoria to define mineral sands Priority Zones. The Roadmap flags that, based on this first pilot, in the short term, the Government will also commence a strategic land use assessment potential to identify a Priority Zone for antimony projects in central Victoria.

In addition, within the next 12 months, the Government intends to develop a policy regarding when the Minister will exercise their powers under section 7 of the Mineral Resources (Sustainable Development) Act 1990 (Vic) (MRSD Act) to designate areas as exempt from minerals exploration and development. The powers granted under section 7 are broad and entitle the Minister to exempt land for any reasons they decide to be appropriate. However, in making such a decision, the Minister must take into account the known or potential value of the resources, the impact that the proposed exemption may have on that value, and the social and economic implications of the decision. We expect that this policy will be of interest to those assessing the viability of potential development opportunities, as it will provide greater certainty regarding when the Minister is likely to exercise these powers.

Modernised regulatory regime

The Roadmap outlines several key initiatives and reforms aimed at streamlining and improving the approvals process for mineral exploration and mining projects. This is a welcome development, as approval timeframes for exploration activities in Victoria lag those in other mining jurisdictions and a lack of transparency in the approval process has been cited as a key deterrent for investment.²

This will primarily be delivered through the implementation of reforms in the Mineral Resources (Sustainable Development) Amendment Act 2023 (Vic) (MRSD Amendment Act), which will commence by 1 July 2027. These reforms introduce a duty-based model for regulation, which imposes a duty on a licence or work authority holder to eliminate or minimise, as far as reasonably practicable, the risk of harm to the environment, the public, land, property or infrastructure by its exploration, extractive industry, mining or rehabilitation of land or related activities (the breach of which will be an offence). The licence or work authority holder will not be able to commence work until the department head has determined whether the risk level for the licence or authority is lower, moderate or higher which, in turn, determines the obligations with which the holder must comply. The existing requirement to lodge work plans will no longer apply, however rehabilitation plans will continue to be required for moderate or higher-risk operations. Rehabilitation for lower-risk operations will need to be undertaken in accordance with a compliance code made under the Act. Although these reforms are intended to reduce the time and administrative burden of the existing approvals processes, largely by removing the work plan approval process, whether they are effective in doing so will depend on the details of their implementation.

Importantly, the Roadmap also indicates that the Government has committed to reforming the Victorian Environment Effects Statement process to facilitate accelerated approvals, with a targeted timeframe of no longer than 18 months for assessment under that process as a result of sharper assessment scopes and the provision of extra support to proponents.

Further, the Government has extended Resources Victoria Approvals Coordination (RVAC), a division of Resources Victoria, until 2027 so that it can continue, through its case management role, to assist with reducing the uncertainty associated with earth resources development approvals. It is not clear whether RVAC will continue to focus, in the mining workstream, on critical minerals and gold given the Roadmap also provides for the establishment of a new Critical Minerals Coordination Office (CMC) within Resources Victoria within the next 12 months with responsibility for all critical minerals project approvals. It may be that the CMC assumes responsibility for critical minerals projects while RVAC continues to be responsible for gold resources. The Roadmap does not include any further detail regarding the division of responsibility between the two offices.

Overall, these initiatives are designed to provide clearer regulatory pathways, reduce administrative burdens, ensure timely project approvals and maintain high environmental standards while fostering responsible investment in Victoria’s critical minerals sector.

Local production and processing

Across Australia, industry participants and governments have sought to explore opportunities to develop downstream critical minerals processing and end-use manufacturing capabilities. If done right, there are clear economic, security and environmental benefits that can be achieved through this. The Roadmap promises to continue to investigate these opportunities. This is a promising show of support, and industry participants will keenly await the announcement of any initiatives to navigate the challenges that Australia faces in competing with other jurisdictions for future investment in production and processing, including relatively higher labour costs and more stringent environmental regulation.

Sharing benefits

The Victorian Government has also indicated its intention to design ‘benefit sharing models’ involving regional communities and Traditional Owners. These benefits are stated to be both financial and non-financial. The Roadmap sets out key principles underpinning these proposed models, including that the benefits of Victoria’s mineral wealth should be shared equitably, and that these benefits include tangible and non-tangible opportunities. These models may, for example, encompass environmental protection, the building of a local workforce to support the development of the industry, and other means of enriching local areas. Investment in projects located in regional areas will undoubtedly contribute to local communities through employment and training opportunities and increased economic activity. It remains to be seen how the Government intends to balance these potentially competing benefit sharing objectives with the desire to create an attractive investment environment for proponents.

Continuing a trend of government support

This latest announcement continues the trend we have observed in recent times of increasing government support across Australia and globally for the development of the critical minerals industry, including:

• governments globally, including Australia’s, have engaged in government-sponsored initiatives to secure diversified supply of critical minerals;
• the New South Wales Government released its Critical Minerals and High-Tech Metals Strategy 2024–35, including a centrepiece announcement of a $250 million royalty deferral initiative for critical minerals projects;
• the Western Australian and Federal Governments announced initiatives to support critical minerals investment, namely Western Australia’s Battery and Critical Minerals Strategy 2024-2030, and support for the critical minerals industry in the recent Federal Budget; and
• similarly, the unveiling of Queensland’s Critical Minerals Strategy contained $245 million in initiatives aimed at unlocking Queensland’s critical minerals industry.

This is a promising trend that we expect to see continue given the challenges the volatility inherent in the markets for critical minerals present in developing projects and obtaining funding sources.

Next steps

The Victorian Government’s Roadmap is a step in the right direction to encourage investment in critical minerals projects in the state. Stakeholders at all stages of the critical minerals value chain – be they explorers, producers, financiers or otherwise – are likely to benefit from these initiatives.

However, given the significant regulatory changes to be implemented under the MRSD Amendment Act and the need to balance the potentially competing interests of proponents, local communities and Traditional Owners, time will tell how effective the Government’s proposed policy changes are at attracting investment in the exploration and development of the state’s critical minerals resources.

Source: Allens Insights (legal sector)

Allens has advised the Clean Energy Finance Corporation (CEFC) on a landmark investment in the construction of a clean energy ‘superhighway’.

The CEFC will commit up to $1.92 billion to finance two major energy infrastructure projects to be developed by Transgrid, representing the largest single investment in the CEFC’s history. The projects are HumeLink and the NSW element of the Victoria-NSW Interconnection (VNI West).

‘Transmission projects are essential to driving energy transition in Australia, and require significant capital and innovative funding solutions,’ said lead partner James Darcy.

‘We were delighted to work alongside the CEFC and Transgrid in respect of such a significant investment in the nation’s clean energy infrastructure.’

The CEFC is providing this finance via its $19 billion Rewiring the Nation Fund. The nationally significant projects, once completed, will be instrumental in Australia’s energy transition, helping to bring low-cost and low-emissions clean energy to energy users.

Allens’ work on this financing adds to its extensive experience in lending and debt capital markets, including for transmission projects.

Allens legal team

James Darcy (Partner), Dean Rose (Senior Associate), Bronwyn Neal (Associate)

Source: Northern Territory Police and Fire Services

Source: Northern Territory Police and Fire Services

Source: Northern Territory Police and Fire Services

Source: Northern Territory Police and Fire Services

Source: Northern Territory Police and Fire Services

Source: Allens Insights (legal sector)

The NSW Government’s new plan 9 min read

Since releasing the NSW Government Action Plan: A ten point commitment to the construction sector (the Ten Point Commitment) in 2018, the construction sector has undergone significant change. Having met the challenges of unpredictable external factors like COVID-19, extreme weather and geopolitical instability, the construction sector continues to grapple with supply chain constraints, rising material costs, labour shortages and skills gaps, increasing pressure to reduce carbon emissions and adapting to technological change.

In recognition of this, at the end of last year, Infrastructure NSW published the NSW Government Principles for Partnership with the Construction Industry (the Principles), which will replace the Ten Point Commitment.

The Principles aim to streamline the delivery of infrastructure projects by bolstering cooperation between the NSW Government and construction industry participants to face these challenges together. The refreshed Principles signal an increased government focus on local industry, growing a skilled and diverse Australian construction workforce and embedding decarbonisation into procurement processes.

In this Insight, we cover:

• what the seven Principles are;
• how they compare against the Ten Point Commitment; and
• how these Principles can be used to secure success for your projects.

Key takeaways

• While the Ten Point Commitment focused on government action to improve the delivery of NSW’s infrastructure pipeline, the new Principles invite greater collaboration between government and industry.
• The Principles place a sharper focus on social and environmental policy objectives than the Ten Point Commitment, including in relation to gender equality, workforce flexibility and decarbonisation.
• Given that the policy objectives promoted by the Principles are likely to become explicit tender requirements and performance benchmarks for future NSW Government projects, industry partners will need to consider how to adhere to the Principles. Steps may involve, for example, implementing workplace flexibility plans, changing work, health and safety requirements in supply chains and downstream contractor arrangements, and meeting new carbon reporting requirements.

The story so far: why were the Principles introduced?

In 2018, through the Ten Point Commitment, the NSW Government made the following commitments in relation to the procurement and delivery of the NSW infrastructure pipeline:

1. procure and manage projects in a more collaborative way;
2. adopt partnership-based approaches to risk allocation;
3. standardise contracts and procurement methods;
4. develop and promote a transparent pipeline of projects;
5. reduce the cost of bidding;
6. establish a consistent NSW Government policy on bid cost contributions;
7. monitor and reward high performance;
8. improve the security and timeliness of contract payments;
9. improve skills and training; and
10. increase industry diversity.

In the six years since then, the construction sector has been heavily impacted by evolving market conditions, including:

• significant supply chain risks and inefficiencies, exacerbated by COVID-19, extreme weather events, inflation and geopolitical instability;
• a surge in construction insolvencies – the twelve months prior to June 2024 witnessed the highest number of construction insolvencies in the past decade;¹
• rising labour shortages and skills gaps in the construction sector, especially in residential construction and the roles of construction managers, carpenters, and civil engineering professionals;
• fiscal and labour capacity constraints, which limit delivery of concurrent major projects in the infrastructure pipeline – the Infrastructure Australia Market Capacity report anticipates a shortfall of almost 98,000 skilled construction workers in NSW for public infrastructure in 2025.² However, in counterpoint, tapering public infrastructure spending is rumoured to have led to layoffs across the construction sector as a whole;
• a reduced ability to attract investment;
• increased focus on environmental, sustainability and social policy objectives; and
• technological advancements.

The Principles seek to refresh the Ten Point Commitment in light of these changing market conditions. Infrastructure NSW and its member agencies are also devising an implementation plan to ensure that the Principles are implemented effectively, although a release date for this plan is yet to be announced.

The next chapter: the Principles for Partnership with the Construction Industry

Before diving into the detail of the Principles, there are two key differences between the Ten Point Commitment and Principles in the NSW Government’s approach to setting down principles for partnership with the construction industry:

• While the Ten Point Commitment focused on government commitments, the Principles place a much greater focus on collaboration between government and industry. Each principle has three components: (1) the objectives to be achieved, (2) the actions that the NSW Government commits to, and (3) the actions that industry partners are invited to take. As such, the Principles go further than its predecessor by inviting actions for participants, not just government.
• While the Ten Point Commitment focused on streamlining and optimising the procurement and delivery process for infrastructure projects in NSW, the Principles have a much broader focus on the general health of the construction supply chain in NSW, with four of the seven Principles geared towards developing a healthy, sustainable, local industry and a workforce that can attract and retain employees. The Principles also integrate other social and sustainability goals, including in relation to housing and decarbonisation.

Turning to the detail, the seven Principles are:

Renewed commitments: the similarities between the Ten Point Commitment and the Principles

Some aspects of the Principles reiterate or build upon the NSW Government’s existing commitments under the Ten Point Commitment. For example:

• Early market engagement: both the Principles and the Ten Point Commitment stress the importance of early market engagement to inform project design and delivery;
• Collaborative contracting: while the Principles do not explicitly discuss collaborative contracting, they promote innovative contractual arrangements and benefit-sharing arrangements to improve productivity. Given the market trajectory, we expect that collaborative contracting is here to stay for a while yet (see our Insights here and here on the rising trend of collaborative contracting);
• Sizing of contract packages: both the Principles and the Ten Point Commitment recognise the need to offer contract packages that are accessible to a diverse range of contractors, including small and medium-sized firms. This echoes the move towards split and disaggregated procurements for Original Equipment Manufacturer (‘OEM’) supply and Balance of Plants (‘BOP’) civil works in the energy sector, whereby projects are divided into smaller packages to allow for greater flexibility (see our Insight on the split contracting trend in the batteries space);
• Standardisation of contracts and procurement methods: both the Principles and the Ten Point Commitment encourage the standardisation of contracts and procurement methods, including by publishing ‘best practice’ guidance materials to assist tenderers and contractors;
• Local skills development and manufacturing capacity: both the Principles and the Ten Point Commitment emphasise the importance of upskilling local workers and local manufacturing to address the ongoing skills shortages. The requirement to mandate tender weightings to support local content, local job creation and ethical supply chains in the Principles takes this even further than the Ten Point Commitment.

Shifting priorities: the differences between the Ten Point Commitment and the Principles

On the other hand, the Principles also herald some new areas of focus, with much stronger commitments around decarbonisation and workforce culture. The key differences between the Ten Point Commitment and the Principles include:

• Decarbonisation: while the Ten Point Commitment is silent on decarbonisation, the Principles set out specific measures that the NSW Government will implement to track and report on embodied carbon within its infrastructure projects. This shift reflects the broader changes in global environmental commitments, regulation and stakeholder expectations in the last six years.
• Gender diversity and equity:while the Ten Point Commitment acknowledged the need to boost diversity within the workforce, the Principles particularly focus on women’s participation in the construction industry. For example, the NSW Government has committed to considering a company’s progress towards citation by the Workplace Gender Equality Agency (WGEA) as a ‘Gender equitable employer of choice’ as part of the tender process.
• Workforce culture: whereas the Ten Point Commitment sought to reward ‘high performing’ contractors exhibiting ‘key behaviours and values expected of good clients and contractors’, the Principles go beyond that by explicitly calling out the need to improve psychosocial safety and wellbeing on construction sites. Industry participants are asked to incorporate these expectations within their downstream and supply chain arrangements, and will be assessed on their performance in respect of future opportunities for work.
• Financial sustainability: with the rise in contractor insolvencies in the last six years, the Principles purport to have a much greater focus on assessing and improving the financial capacity of contractor entities than the Ten Point Commitment.
• Innovation and digital practices: the Principles have embraced the potential for digital tools to improve productivity much more explicitly than the Ten Point Commitment (which did not mention technology or digital practices at all). The Principles push for standardised data and baseline productivity metrics to be developed, alongside accelerated implementation of digital practices and tools across the lifecycle of the project.

What’s next?

While there is some overlap between the Ten Point Commitment and the Principles, the Principles demonstrate a clear shift in priority towards addressing some of the more structural issues facing the Australian construction industry (particularly around skills shortages, workforce retention and financial capacity).

Collaboration between industry and government (at both the state and federal levels) will be imperative in achieving a coordinated response to these structural issues and bolstering the local construction industry. Decarbonisation has also emerged as a key priority for partnership with the construction industry. This priority aligns with the increasing focus more generally on reducing emissions in hard-to-abate industries as corporations and governments chase down their decarbonisation targets.

Infrastructure NSW will track progress against the Principles for Partnership in its annual Progress Report, as it has previously done with the Ten Point Commitment.

Source: Allens Insights (legal sector)

Allens has advised the Queensland Investment Corporation (QIC) Real Estate team and QIC’s inhouse legal team on QIC’s circa $900 million sale of Westpoint Shopping Centre in Blacktown, New South Wales, the largest individual retail asset transaction in Australian history.

Australian property investor Haben and US investment manager Hines have partnered to acquire the shopping centre and neighbouring Kmart centre.

At the time of opening in 1973, the complex was one of the biggest in Sydney’s west and now features approximately 104,000 square metres of core retail space, 270 retail stores, co-working facilities and 4378 parking spaces. QIC held the asset for 34 years.

‘It was fantastic to work with the QIC team on this sale, which enabled QIC to realise value for its clients at the perfect time. It demonstrates there is demand for well-managed retail assets in strategic locations like Westpoint,’ said lead partner John Beckinsale.

Allens legal team

Real Estate & Development

John Beckinsale (Partner), Felicity Rourke (Partner), Lauren Cutuli (Senior Associate), Layth Zumot (Associate), Hannah Woodfield (Lawyer), Stella Bogdanovic (Lawyer), Kerianne Kalajzich (Senior Paralegal), Jodi Harrison (Senior Paralegal)

Disputes & Investigations

Jonathan Light (Partner), Lauren Carroll (Associate)

Source: Allens Insights (legal sector)

Allens has advised a syndicate of domestic and international lenders on its $722 million debt financing package to fund the development of Stages 1 and 2 of the Supernode battery energy storage system (BESS), Australia’s largest standalone BESS project financing to date.

The 520MW/1856MWh BESS, being developed by global investment manager Quinbrook Infrastructure Partners, is located adjacent to the central node of Queensland’s electricity network, allowing for efficient storage and redistribution of surplus solar energy.

The BESS will form part of a $2.5 billion hyperscale data centre, renewables and battery storage project at Brendale in Queensland which will offer significant low-emissions data storage capacity for domestic and international customers.

The syndicate of lenders includes Bank of America, Commonwealth Bank of Australia, Deutsche Bank, Mizuho Bank and MUFG Bank. ICA Partners were the financial advisers to Quinbrook.

‘We are delighted to have advised the lenders on this landmark investment in Australia’s energy future, which will play a critical role in Australia’s energy transition by providing renewable capacity to the energy-intense, rapidly growing data centre sector,’ said lead partner Rob Watt.

The advice builds on Allens’ experience in battery project financings, with the firm having also advised on the Orana BESS, Waratah Super BESS, Templers BESS, Koorangie Energy Storage System, Hazelwood BESS and the Bouldercombe Battery Project.

Allens legal team

Rob Watt (lead Partner), Mark Hakeem (Senior Associate), Kade Alexander (Associate), Maya Bahra (Lawyer)