Just over one month ago, we posited that China's virtual monopoly on mining rare earth metals would soon come to an end as competitors ramped up production. Well, just a few weeks later, Australia is taking steps to do exactly that. To wit, Aussie PM Scott Morrison announced Wednesday that he would introduce new funding for the refining of rare earths refining on Wednesday.
The move makes sense. Australia has large deposits of rare earth metals, coming in right behind Russia and India. Now, it will invest in projects to not just mine but also refine the metals - something that has previously been left to China, which has processed the metals cheaply, according to the Australian Broadcasting Corporation.
Ultimately, Australia's decision is bad news for Beijing, which has seen its dominance in the rare earths space diminish in recent years.
And while the US has 1.5 million million tons of rare earth elements (or REEs) in reserve, the dawn of the war in Ukraine has left the European Powers searching for new sources after sanctions have dramatically restricted what they can and can't buy from Russia, another major producer and exporter.
Australia has a number of REE deposits that are distributed across the country.
Rare earth elements are a group of seventeen chemical elements that occur together in the periodic table. The group consists of yttrium and the 15 lanthanide elements (lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, and lutetium). Scandium is found in most rare earth element deposits and is sometimes classified as a rare earth element.
Given their important role in electric vehicle production, it has been posited that cobalt, lithium and the REEs would become the most sought-after resource following crude oil and natural gas.
They're also part of the great irony of "renewable" energy: while the sun and wind are indeed infinitely renewable, the materials needed to convert those resources into electricity - that is, minerals like cobalt, copper, lithium, nickel, and the rare-earth elements - are anything but.
To try and bolster its production, the Australians will invest a total of $500 Australian dollars ($360 million) in various REE and mineral-related projects, according to the SCMP.
Australia announced almost A$500 million (US$360 million) in funding to boost output of critical minerals, aiming to diversify supply for its allies and counter China’s dominance of the global market.
Prime Minister Scott Morrison unveiled the funding for a slew of projects in Western Australia on Wednesday and said the state would become a powerhouse for Canberra’s allies.
“Recent events have underlined that Australia faces its most difficult and dangerous security environment that we have seen in 80 years. The events unfolding in Europe are a reminder of the close relationship between energy security, economic security and national security,” he told reporters.
As Bloomberg reminds us, the US and its allies have long worried about China’s efforts to dominate the market for REEs. They worry that it could use this dominance to restrict flows of these minerals to the West, which would cripple high-tech manufacturing.
Rare Earths might seem like a misnomer. While they’re not as rare as gold or silver, the elements aren’t often found in large volumes and require intensive processing to produce materials for end users.
The move by Australia isn't exactly a surprise. They agreed back in September during a meeting of "the Quad" - a the Pacific focused security alliance that China has obliquely denounced as a "Pacific NATO" - in Washington to bolster rare earth mining and refining to try and combat China's dominance.