Defence minister says still too few sources of rare earths

NTU get's a mention.

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DefenceMinister Linda Reynolds says Australia must step up in supplying rare earthsand other critical minerals increasingly important to its armed forces andthose of allies.

Senator Reynolds raised theprospect of increased government support for rare earths on Monday as Australialooks to boost defence capability and western nations seek to reducetheir reliance on China.

ASX-listed Lynas remains thebiggest, and only significant non-China supplier, of rare earths materials nowessential in electronics, wind turbines, electric vehicles and in the military.

Ms Reynolds, speaking at abreakfast hosted by the Perth USAsia Centre, said the supply of rare earths wastoo concentrated. In highlighting the strategic importance of non-China supply,she said each F-35 joint strike fighter included 417 kilograms of rare earths.

Rare earths are also used inguided missiles, night vision goggles and other military technology.

Australia was working with the USand other partners through the multi-country Energy Resource GovernanceInitiative to boost supply, Ms Reynolds said.

“Here inAustralia, we have significant geological reserves of critical minerals andrare earth elements, and we are well placed to capitalise on rising globaldemand,” she said.

“But there is still significantconcentration of supply chains in this sector and in the capital that funds andprioritises off-take agreements.

“Australia is very well placed tostep further into this market, and bolster global supply chain security.”

The minister has been a long-timecampaigner for sovereign supply of critical minerals and rare earths materials.In 2018, she led the first critical minerals delegation to Canberra to raiseawareness of the strategic importance of the industry.

Lynas remains in the running for Pentagon funding towards a heavy rare earths separation plant in Texas despite a push back from a group of Republican senators who are backing US-only supply chains.

Amanda Lacaze-led Lynas minesrare earths in WA and carries out processing in Malaysia, where it does nothave capacity to separate heavy rare earths.

In April, Lynas signalled it mayturn to governments anxious to reduce their reliance on China to help fund avital $500 million capital works program as it grappled with a four-year low inrare earths prices in the wake of COVID-19.

“Non-traditional sources of fundshave served this business very well, government funding in particular. So wecould seek to progress discussions with various governments in respect tofunding,” Ms Lacaze said at the time.

Lynas, which counts Japan Inc asits major backer, has earmarked a site at Kalgoorlie in WA for a new crackingand leaching plant that needs to be up and running by July 2023 under operatingdeadlines set by the Malaysian government.

Emerging heavy rare earthsproducer Northern Minerals said last week it would partially restart its pilotplant in WA's Kimberley region.

The plant was put into care andmaintenance in March because of what the company said were COVID-19-relatedtravel restrictions and the threat the virus posed to indigenous communities inthe remote area.

Treasurer Josh Frydenbergrecently blocked Chinese company Baogang's plans for a $20 million equityinvestment in Northern Minerals, which has been supplying a heavy rare earthscarbonate to customers in China.

The Coalition government'sNorthern Australian Infrastructure Facility (NAIF) is providing $150 million infinancial backing for a new mineral sands mine in WA that includes secondaryrare earths capacity. NAIF is also considering backing for ArafuraResources and its $1.1 billion rare earths project, in the Northern Territory.