Morrison 10 year plan on rare earth, page-5

Prime Minister Scott Morrisonwill press business and industry to help lift efforts to develop as quickly aspossible a domestic critical minerals processing capacity amid fears China is too dominant.

While Australia is already a fast-growing globalsupplier of the rare earth and other critical minerals needed for a vast arrayof technologies from fighter jets to electric vehicles and iPhones, it’s onlycapturing a small share of the overall potential benefit because it doesn’tprocess those materials.

Scott Morrison wants Australia tobe both a resources giant and a processor of rare earths.

On Thursday Mr Morrison willrelease a 10-year “road map” to create more processing capacity as well asopening the door to applications for a $1.3 billion fund to help manufacturersramp up production, and commercialise products for global supply chains.

“The government will be looking at opportunities tonot only collaborate with industry and to make strategic investments, but alsofor industry players and businesses to work together to invest in strategicprojects that will boost Australia’s manufacturing capabilities and expertisein the resources sector,” the government says in the report.

The moves are part of a broader push to make Australia one of the developed world’slinchpin suppliers of rare earths and critical minerals as concerns grow over China, which currently dominates supply.

Australian companies such as Lynas andIluka Resources are already shipping many of those resources offshore – including to the US which is rapidly developing its own capacity with Australian support – but Mr Morrison is now eager to drive what many in the industry have been demanding for years and even decades: to add more value to the materials mined in Australia.

The manufacturing initiative “will help positionAustralia as not just a global leader in the resources sector but also in themanufacturing of the technology used, as well as turning the raw materials intovalue-added products,” Mr Morrison will say.

“Today’s funding will help unlock investment fromindustry to help build manufacturing capability and competitiveness inAustralia’s resources sector while taking advantage of a significant globalgrowth sector.”

The Resources Technology and CriticalMinerals Processing Roadmap says that while Australia is wellregarded, it needs to bring more innovation to customers.

“To do this, the industry must invest in projectsthat translate and commercialise new ideas into products and service,” thegovernment writes in the report.

“Australia has significant reserves of the criticalminerals and metals which drive the modern global economy.

“These are used to manufacture advancedtechnologies such as electric vehicles, mobile phones and renewable energysystems.

“However, because the majority of primary ores areshipped overseas for processing, Australia derives a small share of thepotential overall benefit.

“Australia can capture greater benefit from thesevalue chains by undertaking further value adding and manufacturing here.”

The Morrison government is pressing for moredomestic processing, for instance of lithium hydroxide for batteries as a wayto drive economic growth in regions such as the Hunter, Western Australia andCentral Queensland.

The report recognises that many Australiancompanies face technical and market barriers, and acknowledges that moreinvestment is needed and that market prices are often distorted by dominantglobal suppliers.

“To secure more market share and more downstreamactivities, manufacturers need to demonstrate a reliable processing capabilityand the ability to scale to meet specific customers requirements,” the reportsays.

“These factors make it difficultto access finance without public funding and risk sharing.”