Australia longs for ‘pipe dream’ of breaking China’s grip on rare earths market: ‘the world will transform’

Australia and the US are working together in an attempt to break China’s monopoly on international supply chains for critical minerals and rare earths

But ending their reliance on China won’t be easy, Australia’s resources minister said, because Beijing saw ‘this need coming and made the most of it’

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Workers use heavy machinery to transport soil containing rare earth elements for export at a port in Jiangsu province, China, in 2010. Photo: Reuters

Published: 10:01am, 1 Nov 2022Updated: 10:16am, 1 Nov 2022

Australia’s resources minister said it was a “pipe dream” that Western countries could soon end their reliance on China for rare earths and critical minerals – vital for the defence, aerospace and automotive industries – due to the Asian powerhouse’s existing grip on global markets.

“That’s a country that has seen this need coming and made the most of it,” Resources Minister Madeleine King said in an interview.

That won’t stop Australia and the United States from working together to boost investment in these critical minerals in an attempt to break China’s monopoly on international supply chains, King said. It was Canberra’s aim to “make the most of the natural endowment we have of these resources, so that we can provide an alternative source of them from China,” she added.

Stockpiles of rare earth ore are seen at a mine in Western Australia operated by Lynas Rare Earths Ltd. Photo: Lynas Corporation via AFP

Lithium and other critical minerals including cobalt, platinum and rare earths are used in the manufacturing of a wide range of products which are crucial for national security and the fight against climate change, including jet engines, solar panels and electric vehicles. Australia has some of the world’s largest reserves of these resources and is among the biggest producers of critical minerals globally.

Much of the country’s production capacity for lithium and rare earths is in Western Australia. Siriana Nair, the US consul general in the state capital Perth, said Australia and the US shared a “strong strategic interest” in securing critical mineral supply chains.

While Nair wouldn’t specify China as the target of growing cooperation between the US and Australia, the US diplomat said having a single source of any critical resource was a “big drawback and a huge flaw”.

“I don’t think anybody in any country wants to have global supply chains dependent on kind of a single point of failure,” she said in a separate interview. “It’s just smart policy.”