New cooperation decided
The USA and Australia want to mine rare earths
Against the backdrop of the conflict with China, the USA and Australia are increasing their cooperation on rare earths. Billions of dollars are expected to flow into Australian funding projects in the future.
The USA and Australia want to intensify their cooperation in the extraction and processing of rare earths. This was agreed by US President Donald Trump and Australian Prime Minister Anthony Albanese in the White House. By expanding cooperation with its ally Australia, Washington wants to reduce its dependence on China, which dominates the extraction and processing of rare earths.
According to Australian information, raw material extraction projects with a value of 8.5 billion US dollars are to be initiated. For example, the US Department of Defense wants to invest in the construction of a large gallium refinery in Australia. The White House said the resources to be mined were worth an estimated $53 billion.
China dominates global supplies
Metals known as rare earths are used for the production of smartphones, wind turbines, electric cars and military equipment. In recent decades, China has secured a quasi-monopoly position in their extraction and processing. According to calculations by the management consultancy AlixPartners, the People’s Republic now controls up to 70 percent of the production, 85 percent of the refinery capacities and around 90 percent of the magnet production. China exploits this power.
At the beginning of October, Beijing announced that five raw materials from the group of so-called “heavy rare earths” could only be brought out of the country with export licenses from November 8th. China had previously imposed restrictions in April, in the middle of the trade dispute with the USA.
The restrictions pose significant challenges, not least to the automotive industry. “They can cut off the juice for us, the entire auto industry, within two months,” said Toyota manager Ryan Grimm. Many industries have been working on reducing the use of rare earths for a long time. However, the use of these substances cannot usually be avoided completely, even if only tiny amounts are sometimes required.
Worldwide efforts for other sources
Australian Prime Minister Albanese said his country has the majority of critical raw materials and rare earths needed for the defense industry and other advanced technologies.
However, investments in the mining of rare earths are considered risky. Although the sought-after raw materials are available in many regions of the world, investments have often not been worthwhile so far because it is hardly possible to compete with China’s low prices.
Recently, many countries have intensified their efforts to become less dependent on imports from the People’s Republic. These include, above all, Japan and the USA, which have increased their involvement in Africa and Latin America. Mining projects to extract rare earths often take years before relevant quantities are produced.
