Washington | US Commerce Secretary Gina Raimondo has committed to help finance Australian critical minerals projects through America’s export financing arms, as President Joe Biden invokes Cold War powers to boost the domestic supply of minerals crucial for defence equipment and electric vehicles.
Ms Raimondo and Australian Trade Minister Dan Tehan met for an hour on Wednesday (Thursday AEDT) in Washington with chief executives from critical minerals producers to iron out regulatory hurdles that prevent US financing agencies from investing in such projects.
“We’ve just got a long to-do list from the companies in there about the help they need with financing, the help they need with regulation, the help they need with permitting,” Ms Raimondo said.
US Commerce Secretary Gina Raimondo and Australian Trade Minister Dan Tehan in Washington. Dan Tehan/Twitter
“We’re committed to doing it,” she said.
Ms Raimondo, the former governor of Rhode Island and current chair of the US Development Finance Corporation, said she would be “going one by one breaking down barriers and getting things done” to facilitate investment in such projects.
In November last year, the US updated an official list of critical minerals such as nickel and zinc that are central to energy, defence, electronics and other vital industries, as the administration tries to reduce its dependence on overseas supplies.
President Biden was expected on Thursday (Friday AEDT) to enact the Defence Production Act – a wartime power – that enables the government to fund the production of these minerals at current operations, as well as help finance-related productivity improvements, safety upgrades and feasibility studies.
Ore crushing at MP Materials’ Mountain Pass mine in California. The company is currently the only rare earths producer in the US. Bloomberg
The share prices of critical minerals stocks in the US rose on the leaked news.
Australian companies that stand to gain include Iluka, Australian Strategic Minerals, Cobalt Blue, Lynas, RZ Resources and VHM. Lithium company Ioneer is seeking funding from the US Department of Energy of about $US500 million ($665.9 million) and is currently in a due diligence process.
RZ Resources is an unlisted critical minerals and rare earth miner due to begin production in early 2024.
Founder and managing director David Fraser said: “Government support from both countries will be imperative in ensuring Australian companies like RZ can start production early and fill supply chain gaps brought about by global geopolitics.
“Strategic partners like the US and Australia working together so closely means we can be confident of bringing our project to market with reliable and trusted off-take partners in the US.”
A spokesperson for Lynas, which was also represented at the ministers’ meeting in Washington, said the company was “actively engaged with the Australian and US governments on meeting supply chain challenges”.
Dependence on China Demand for critical minerals is being driven by increased demand for renewable energy generation, electric vehicles, electronics and defence equipment, but there are also supply problems. The US wants to move away from its dependence on China’s rare earths mining and processing, which accounts for as much as 80 per cent of global supply.
Sanctions on Russia’s exports over its invasion of Ukraine are also adding pressure on supply.
Mr Tehan met officials from the Export Import Bank and the Development Finance Corporation – equivalent agencies of Export Finance Australia – this week in Washington. He also met US senators to firm up support for changes.
“We are going to be making sure that we work to get the agencies lined up to do the type of work we need to get that investment, whether it be with debt or equity,” Mr Tehan said.
Australia in pole position According to the International Monetary Fund, Australia is in pole position to benefit from a sixfold increase in demand for critical minerals, worth $US12.9 trillion, over the next two decades.
Mr Tehan and Ms Raimondo also met to launch the so-called Indo-Pacific Economic Framework, part of the inaugural Australia-US Strategic Commercial Dialogue. The ongoing dialogue is between the US Commerce Department and Australia’s Department of Foreign Affairs and Trade.
Ms Raimondo said the US and Australia stood side by side against China’s economic coercion and human rights abuses.
“China’s anti-competitive coercion, there is no place for that. And we will stand with our allies against that, whether it is unfair practices as it relates to trade, which undermined the stability of our industrial base and our workers, or whether it is standing up against the human rights abuses, we’ll stand strong with our allies to do that,” she said.
A mine in the Democratic Republic of Congo, which produces around 70 per cent of the world’s cobalt supply. RELATED Greenstone confident in cobalt demand as mulls spin-off She said the US and Australia would be drawing up a list of countries to be included in the Indo-Pacific Economic Framework.
“It’s a region for which we have been absent in the recent years. And it’s time for us to step up affirmatively around the digital economy, supply chains, critical minerals, infrastructure [and] the green economy,” Ms Raimondo said.
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