A $4.4bn fund for defence exports will be thrown open to potential rare earths miners as part of the federal government’s latest efforts to stimulate a new wave of mining projects.
Federal Resources Minister Matt Canavan will today announce that would-be rare earths miners will be able to apply for support from Export Finance Australia’s defence export facility, opening a new avenue of government funding for the industry.
Mr Canavan, who will fly to the US on Thursday for a series of meetings with senior US government officials in Washington next week, said the government would also open a new facilitation office to support companies looking to secure investment and finance for their so-called “critical mineral” projects.
The government has been working closely with the US in an effort to drive the development of new Australian mines producing rare earths — which are used in a host of modern technologies including mobile phones, wind turbines, electric cars and fighter jets — as well as other commodities that it says are critical to the world’s economic wellbeing such as cobalt, magnesium, vanadium and chromium.
The market for rare earths has been a particular focus, given the strategic use of the materials, China’s near-total dominance of supply and its potential to choke rare earths supply in the event of a trade dispute.
Despite ongoing trade tension between China and the US, supply has continued to stream out of China and market prices for rare earths remain weak. That in turn has made it difficult for rare earths companies to secure the funding they need to develop new mines and reduce the market’s reliance on China.
Mr Canavan said companies would be able to apply for funding from the defence export facility and the existing Northern Australia Investment Facility.
“We are determined to develop our rare earth and critical mineral assets for the benefit of Australia and our technology-driven industries,” he said.
“By allowing proponents to secure financing through both EFA and the NAIF, we are enhancing opportunities for our critical mineral sector. This opens up new opportunities in trade and manufacturing, creating jobs of the future for thousands of Australians.”
The defence export facility that will now be open to potential miners was established to support defence manufacturers in their pursuit of export contracts.
Amid the years of geopolitical focus on the rare earths sector, only Lynas Corp has managed to establish a rare earths mine of scale.
Northern Minerals has carried out small-scale production at its Browns Range mine in Western Australia, while the likes of Arafura Resources and Alkane Resources are sitting on potential developments that need significant funding commitments to get off the ground.
Mr Canavan’s latest visit to the US will include meetings with US Secretary of Commerce Wilbur Ross, Secretary of the Interior David Bernhardt, and Donald Trump’s top economic aide, Larry Kudlow.
