Great article there Jacob. Thanks for posting. Some extracts from it below for those who don't want to read it all. It is quite possible that the government will dig in deeper than the $200m to get this project off the ground.
As Vernon points out, Australia has “only one active mine at the moment” in the form of Lynas’ Mt Weld. But while other projects could be scaled up, a much larger conundrum remains.
“What do you do with your rare earths once you’ve got them out of the ground? If you have to sell it to China to get it processed then it’s kind of hopeless,” Vernon said.
“If the US wants to become at least partially independent of China, then somewhere in the world we’ve got to establish all of that processing infrastructure that really currently only exists within China.”
Vernon says it’s “absolutely” possible that Australia does that, with the technology required already available here and able to be deployed at mines from Dubbo to Northern Mineral’s Browns Range project.
Yet again, there’s another big leap Australia may need to complete to truly achieve its potential: taking processed minerals and turning them into metals or magnets used in electric vehicles.
“If we want to make magnets then – I won’t say the technology doesn’t exist, but it will require a very brave company to try and take that on,” Vernon said.
One may have just reared its head. Australian Strategic Metals late last year acquired South Korea’s Ziron Tech which claims it can now do just that.
“If Australia could make magnets, then others like Japan, Korea, the US, and the EU could make metals from it, sidestepping China altogether. It is possible, but gosh, it requires investment.”
Australia is finally waking up
Whether or not the federal government is prepared to stump up the initial investment remains to be seen.
It has been, after all, a lack of support and appetite among early investors and governments that has curtailed Australia’s footprint in the sector so far.
Perhaps it’s no wonder. Valued potentially at just $10 billion with development, the West has failed to appreciate the value of the global rare earths market compared to other major commodities. Iron ore, for example, contributed more than $100 billion to the Australian economy last year.
A lack of forthcoming investment is ultimately the reason why the Browns Range mine is a pilot project rather than full blown operations. The early funding to get those same mines off the ground often did come from Chinese investors, with Bauk telling reporters in 2019 that it wasn’t as if there was anyone else willing to chip in.
But it could be time Canberra stepped up to the plate.
“I’m a big believer in the free market economy, but if you decide something is strategic then you shouldn’t treat it as just a worldwide tradable commodity. If it’s strategic, perhaps you should ensure you have supply,” Vernon said.
While he adds that he isn’t suggesting government underwrite entire projects, he does note governments could offer preferential funding and guaranteed loans to help build out an industry that is clearly in need of it.
(20min delay)