Australia Has Minerals and Miners, but Can It Loosen China’s Grip on Rare Earths?

For years, Australia’s role in the global rare earths supply was to dig the ore and ship it to China for processing, but that’s beginning to change.

As the Chinese Communist Party (CCP) tightens its grip on critical minerals called rare earths—essential for the production of many technologies such as electric vehicles, wind turbines, and smartphones—securing supply in the West is becoming ever more important.

Mining, automation, and control engineering consultant Avadh Nagaralawala, told The Epoch Times by email that Australia’s rare earth opportunity sits at the “intersection of geology, geopolitics, and industrial capability.”

“Owning the minerals is one thing. Owning the supply chain is another, and that’s Australia’s real rare earth challenge,” he said.

These critical elements are found in low concentrations in minerals, and they are difficult to separate from other elements, requiring specialist or even toxic extraction processes.

While some of these elements, such as dysprosium, samarium, and praseodymium, are called “rare,” they are not in fact rare in the Earth’s crust, and can be found in many places.

Diana Rasner, Group Lead, Materials & Chemicals and Waste & Recycling at Cleantech Group, told The Epoch Times by email that rare earths come with a ton of other metals that need to be separated first, and doing so “economically only currently makes sense in China.”

“If Australia were to try to onshore this, you’re looking at billions of dollars of infrastructure required and having to navigate the emissions associated with it as well. They work, but they’re dirty, and today’s demand owners are shifting towards this being a big criterion to evaluate in sourcing,” she said.

Facilities such as Lynas Rare Earths’ plant in Kalgoorlie and new developments in Western Australia are supporting Australia’s overall processing, but its capability remains only a small portion compared to China’s production.

Under the Chinese Communist Party, China has a near-monopoly on the global rare earths market, dominating both the mining and processing of these elements through state-controlled companies and strict export regulations.

Nagaralawala said that Australia operates within an open market economy, but the reality is that REEs are “strategic commodities.”

“Competing with China, where the state actively coordinates production quotas, pricing, and downstream integration, may require elements of industrial policy more akin to a strategic reserve model than pure market liberalism,” he said.

Jack Lifton, co-founder of Technology Metals Research, told The Epoch Times that what’s missing from scaling up Western rare earth magnet production is “experience” and “institutional memory.”

Rare-earth magnets are high-strength permanent magnets made from alloys of rare earth elements, and are widely used in electric vehicles.

“We have 10 companies saying they’re going to make magnets, but there’s only five guys that know how to do it,” he said.

Lifton added that China not only guards its magnet-making technology, but also tightly controls the movement of skilled engineers.

He said that if a Chinese engineer says, “I’m going to go to Texas for vacation,” the CCP government will say, “You don’t have a passport anymore. You’re not going anywhere.”

“They’ve prohibited levels of traveling. They’ve prohibited exportable technology,” Lifton said.

He said that Japan is “the special case” as they have been making rare earth magnets for their own car industry for a long time.

“They still do it, but they do it for themselves,” he said, adding that they are not “exactly eager to export these technologies.”

The new government support means that Nyrstar is now assessing the potential to produce antimony, bismuth, germanium, and indium at its smelters in Port Pirie and Hobart.

Rasner said that China is not immune to the “outside influence of the world putting pressure on them.”

“We’re watching in real time what happens when one person or group decides to impose an overarching rule. Markets become more volatile, fear sets in, and then plans become reactive instead of proactive,” she said.

“If there is any good news coming out of this globally, innovations have a rare opportunity to really come to life and help boost production long term that can help nullify a lot of future volatility later down the road.”