Australia and the US have partnered together to find news sources of critical minerals, including rare earth minerals, and reduce their reliance on China which currently dominates supply and demand. How will the partnership help kickstart development of new projects and what are the challenges? We report.
China’s recent threat to use rare earth mineral exports as leverage in its ongoing trade war with the US has, once again, accentuated concerns over the one-party state’s dominance of several key minerals that are used in everything from smartphones to electric vehicles.
In a bid to tackle the issue, in November 2019 the US and Australia decided to formalise an ongoing partnership between the two countries to develop new sources of these so-called critical minerals, including rare earths, cobalt and tungsten. Through the agreement, the two nations plan to foster ‘mutual supply and demand arrangements’, close knowledge gaps, and fast track innovation.
The deal, signed by Geoscience Australia and the United States Geological Survey, further cements over a century of ‘mateship’ between the two countries that was first established in World War I.
It is also part of a wider effort by the Australian government to develop new industries for these new energy minerals. It has already launched a Critical Minerals Strategy and a Critical Minerals Facilitation Office, which will open in January 2020, to help miners secure investment, financing and market access for relevant projects.
Minerals covered in the arrangement are labelled critical by several industrial nations due to their use in military and modern technologies, but also because, in some cases, China monopolises around 80% of supply, as is the case with cobalt.
According to Dr Chris Vernon, program director for mineral processing at the Commonwealth Scientific and Industrial Research Organisation, China decided to exploit its rare earth minerals to dominate every part of the value chain – and now the rest of the world is playing catch-up.
“Chinese supply has up until now been cheap and plentiful enough we’ve ignored the fact there is no substitute for these materials, and there is, for all practical purposes, just one place to get them,” he says.
Australia, however, on the face of it, is well positioned to develop its own resources of these critical minerals. It is estimated, for example, that Australia holds the world’s sixth-largest resource of rare earth minerals.
Vernon says while it’s often looked like too hard a task for Australia to establish its own rare earths industry, the new partnership with the US should be seen as ‘a terrific opportunity’.