Production credits for processing battery minerals are under consideration for the next phase of support to the resources sector, Resources Minister Madeleine King says.
"It's certainly on the table," Ms King told a mining industry audience on Wednesday.
She said the Albanese government was working on what the next stage of assistance would be, building on the critical minerals strategy as part of the push for a resilient and secure supply chain.
"But we mustn't rush into any policy like that," she said, saying it needed "careful consideration".
Industry leaders including Tesla chair Robyn Denholm have called for production tax credits for processing battery minerals onshore to send a signal to investors to build new plants and make sure Australians get the best value out of surging global demand.
As the top supplier of lithium outside China and other key minerals, Australia has more to gain than the rest of the world in the accelerating uptake of electric cars and energy storage batteries.
To compete on the world stage, Australia needs 30 more plants the size of the Kemerton lithium hydroxide plant in Western Australia, Ms Denholm told the Minerals Week summit on Tuesday.
But a new role in producing factory-ready battery minerals puts Australia in direct competition with the United States and other governments already pouring huge subsidies into the sector and attracting global players.
"There's lots of space but they're hard to build," Ms King said.
She said building processing plants took time, a lot of effort and massive investment.
"You can't pretend you're going to build 30 overnight ... the energy needs are enormous," she said.
"But we've certainly got to make an effort to make it happen."