rare earth element

Rare earths: Can Australia challenge China's market dominance

Phil Mercer

By BBC reporter from Sydney

October 18, 2022

The Arafura Nolan's project will be built in central Australia, north of Alice Springs Image Credit, ARAFURA

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Arafura's Nolan project will be built in central Australia, north of Alice Springs.

In the blood-red soil of central Australia, mining company Arafura is planning to build a facility to mine and process those high-demand minerals.

The Nolans Project, 80 miles north of Alice Springs, is located in one of the hottest and driest parts of the country.

Despite the extreme conditions, Arafura believes the investment will pay off. The planned mining and processing facility could meet 5 percent of the world's demand for didymium-praseodymium (NdPr), the metallic element used in powerful magnets.

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They are all rare earth elements, which are crucial in the electronics industry.

Praseodymium, europium, terbium, and other rare earth metals were rarely heard of in the past, but are now widely used in the production of mobile phone touch screens, wind turbines and other modern technology products.

Mining these minerals is an industry currently dominated by China, but geopolitical and trade forces are reshaping the international market.

Rare-earth mine in Baiyun'ebo or Bayan Obo. Baiyun'ebo or Bayan Obo is a mining town in Inner Mongolia in China. The mines north of town are one of the largest deposits of rare earth metals found in the world.

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China dominates the production of rare earth metals.

Australia, an iron ore and coal export superpower with a long mining tradition, believes it is well-positioned to join the mining race to supply key components for electric cars and wind turbines.

“This could certainly be a turnaround for Australia. We are relatively well-positioned in rare earth metals,” said Gavin Lockyer, managing director of Arafura Resources.

"This could really push Australia to the forefront of the renewable industry."

"It is relatively easy to find rare earth deposits, but it is difficult to find large-scale and economically valuable precious metal deposits."

Rare earths are a collection of more than a dozen elements on the periodic table. They are actually not particularly rare, and they are actually quite rich in the earth's crust.

Government research agency Geoscience Australia says the elements have a wide range of industrial, medical, domestic and strategic uses "because of their unique catalytic, nuclear, electrical, magnetic and optical properties."

They are used in "magnets and super-strong magnets, motors, alloys, electronic and computer products, batteries, catalytic converters, petroleum refining, medical imaging and lasers."

Europium is used in fluorescent lights, gadolinium in nuclear power rods, and ytterbium in solar panels.

Metal trading Company Haines and Maassen GmbH in Bonn, The company trades mainly with the rare earth elements and specialty metals.

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Rare earth metals have become important elements in electronics.

Lockyer pointed out that some of the latest technologies depend on these properties.

"It's important to remember that electric cars only contain about $200 worth of didymium-praseodymium, but without it, the electric car will not operate effectively. It is similar for wind turbines," he said.

In times of war and threat, precious metals have strategic value and are used in fighter jets, missiles and drones, among other high-tech devices for space exploration.

Australia's Lynas Rare Earths has contracted the U.S. Department of Defense to build a multimillion-dollar processing facility in the U.S. to reduce reliance on China for strategic minerals.

Lynas is the only major rare earth producer in the world outside of China that operates mines, and it operates the Mount Weld mine in Western Australia.

"We're looking to not only meet the US government's demand for rare earths, but also revitalize the local and rare earths market," Lynas managing director Amanda Lacaze told the ABC.

Jennifer Granholm, US Secretary of Energy, speaks at the Sydney Energy Forum on July 12, 2022, in Sydney.

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U.S. Energy Secretary Granholm has warned that China is "going big" in renewable energy technology.

U.S. Energy Secretary Jennifer Granholm (Jennifer Granholm) warned at a conference in Sydney recently that China is "going big" in renewable energy technology and supply chains.

Beijing's grip on rare earth supplies has been documented by the Australian Strategic Policy Institute (ASPI), an independent think tank in Canberra.

The agency has documented how minerals have become a diplomatic weapon after a 2010 collision between a Chinese fishing boat and a Japanese patrol boat near the disputed island chain. Beijing accused Japan of "illegally intercepting" its trawler and took countermeasures.

"We see that the Chinese government will stop the supply of rare earths to Japan as part of the economic coercion against the Japanese government," said ASPI analyst Albert Zhang.

“Countries have since realized that there is risk in having only one major supplier of rare earths and that this vital raw material cannot be subject to the political will of only one government. Australia has the resources and the right type of business and capital investment , to diversify the world’s supply chains.”

Australian experts have pointed out that because of the US arms sales to Taiwan, China has recently threatened to limit the supply of rare earths to US defense contractors.

Employees work at the assembly line of a wind turbine produced for France's future first wind farm off Saint-Nazaire, at the General Electric plant of Montoir-de-Bretagne, Britany, on September 15, 2020.

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Rare earth metals are often used to make powerful magnets in wind turbines.

John Coyne (John Coyne), director of ASPI's Northern Australia Strategic Policy Center, also warned that China will not easily give up its clamp-like dominance of the international rare earth industry. He noted that Beijing uses its "power and market distortion tactics to strategically dump markets when it wants to drive out competitors and deter new market entrants."

"Australia has the world's sixth largest reserves of rare earth deposits. However, they are largely undeveloped with only two mines in production," he said.

"Australia has huge potential to build a processing base for a variety of ore minerals. However, if miners still have to send (rare earth) minerals to China for processing, then there is no point in creating a resilient supply chain."

China's state-run Global Times said Beijing would welcome "healthy competition" to "improve production capacity" in the industry.

The newspaper pointed out that the United States and its allies are trying to contain China's rise, bringing toxic geopolitics to the key rare earth industry and other economic and trade areas.