Australia to finalise joint strategy with US on rare earths mining

US Secretary of Commerce Wilbur Ross in Canberra on Wednesday. Picture: Ray Strange

• EXCLUSIVE

  GEOFF CHAMBERS

  FEDERAL POLITICAL CORRESPONDENT

  @Chambersgc

  
• 12:00AM OCTOBER 11, 2019

Australia and the US will finalise a joint strategy on rare earths and critical minerals within weeks, as the Morrison government commits to directly back new mines across the nation.

Resources Minister Matt Canavan, who will travel to the US next month, said the federal government would provide “support” in facilitating new mining operations and backed a push by US Commerce Secretary Wilbur Ross to work closely with Japan and South Korea.

Senator Canavan said it would be difficult for commercial players to set up new mines in a “concentrated market” and flagged the need for “joint co-operation among governments” to deliver new projects and combat China’s dominance in rare earths production.

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“What’s great now is that we’ve in effect agreed to move to a due-diligence phase of this discussion and look in detail at specific mine opportunities and help them get over the line,” he said.

Senator Canavan, who raised the issue of rare earths mining and processing during a recent visit to Japan and South Korea, said there was an appetite to inject “diversity” and “competition” into the critical minerals sector.

“The objective with the US is to finalise a joint strategy on critical minerals — from these discussions, we will be focusing on specific projects and putting together details on how to get them over the line,” he said.

Mr Ross, who raised the importance of developing a supply chain and co-operation on rare earths with Scott Morrison and Trade Minister Simon Birmingham in Sydney on Thursday, told The Australian it wasn’t just about the mining but the “processing”.

He said China, which last year accounted for 70 per cent of the world’s rare earth concentrate production, had subsidised rare earth producers and cut prices, making it “uneconomical” for other producers.

The sector, a crucial component for the tech and defence industries and considered vital to national security, has seen increased competition in recent years, primarily because of the start of production at Lynas Corporation’s Mount Weld mine in Western Australia.

Mr Ross said mining and processing rare earths were different depending on the materials, and the “total dollar value of them is not anything like what you could do in iron ore, LNG or coal”.

“What is really important to the US, and becomes more important to Australia as well, is the question of the value of the products that are made that depend on the rare earths, and that is quite huge. That’s the real impact, and as Australia moves up the technological value-added spectrum, it’s going to need more and more itself. Other countries that need it a lot are South Korea and Japan.”

Mr Ross said it was crucial to assess how much capital would be needed to develop mines and how much off-take agreement would be required to ensure new projects were viable: “It’s a fairly complex arithmetic exercise that we’ll be going into, but both on the US side and on these other sides, it’s clear something needs to be done and it should be done quickly. It takes a year or so to get a mine developed.

“Most projects in rare earths are in the feasibility study stage so it will take a while for them to come into reality.”

Senator Birmingham said Australia had some of the world’s “richest stocks of critical minerals … but the market conditions simply don’t exist to attract investment that secures their extraction and processing”.

He said the government did not want to only extract “raw materials”, it wanted to process critical minerals in Australia.