The Tasmanian government will create a $20 million future fund to help regional communities "navigate economic disruption" and "attract new investment".
It follows the government stepping in financially to save King Island Dairy, and industrials Bell Bay Aluminium and Nyrstar from collapse, as well as dealing with the loss of more than 200 jobs after Australia's last manganese smelter Liberty Bell Bay shut down.
The money for the new Recovery Fund for Regional Resilience will come from the government's $10 million investment in King Island's tungsten mine.
The mine is on King Island's south-east coast. (Facebook: Group 6 Metals)
The Dolphin mine, which boasts the largest tungsten deposit in the country, is owned by Australian company Group 6 Metals.
The mine shut for more than two decades due to low tungsten prices, but reopened in 2023 with the help of the $10 million loan.
Under new ownership, the initial $10 million loan was converted into shares, of which Tasmania's government holds 12 per cent.
The mine has since experienced a significant financial turnaround, rewarding investors like the government.
Tungsten is classified as a critical mineral used in heavy machinery and defence manufacturing.
The state government also lent the mine a further $7.5 million last year.
The Dolphin mine is Australia's largest mined tungsten deposit. (Supplied: Group 6 Metals)
Mine proceeds to help reduce state debt
Premier Jeremy Rockliff said the government's investment in the mine would allow it to reinvest in regional communities.
"Our regional communities are at the heart of Tasmania's economic success and they deserve the confidence that comes from knowing support will be there when it is needed most," Mr Rockliff said.
"The strong investment made by the Tasmanian government to support the future of the King Island tungsten mine has allowed us to reinvest a significant portion of the windfall back into the very regions that helped generate that success.
"This fund is about transforming a one-off financial return into an enduring asset for regional Tasmania."
The government said the fund will be able to support communities experiencing significant economic disruption, including responding to major industry change, employer closures, workforce impacts and other economic shocks.
"Too often, governments are forced to react after a major employer closes or an industry undergoes significant change," he said.
"Instead, we are getting ahead of those challenges by establishing a fund that will help communities navigate economic disruption, attract new investment and create new opportunities for the future.
"The Recovery Fund for Regional Resilience will help support economic diversification, workforce transition, investment attraction and community-led recovery initiatives when communities face significant economic disruption."
The government said proceeds from the mine investment would also go towards reducing the state's debt, which is estimated to peak at just under $10 billion by the end of the decade.
Political reporter Lucy MacDonald travelled to King Island on a state government flight.