Debate has reignited in Australia over how to leverage its rare earth resources to tackle China\u2019s stranglehold over the industry, following Beijing\u2019s tightening of export controls and Australian miners providing feedstock for a landmark magnet factory in Europe. <\/p>\n
The world\u2019s fourth biggest rare earth reserves are in Australia, making it a key player in the race to build a supply chain outside China, which has the most reserves and controls more than 85 per cent of downstream processing. <\/p>\n
Australia is developing some of the world\u2019s biggest rare earth processing and refining capacities outside China, but industry experts are urging a faster build-out to help secure western supply chains and create a commercially viable industry domestically.<\/p>\n
\u201cIf you go all the way to completion and sell [rare earth] products, you can make some good money. But if you just sell the minerals, you don\u2019t get that much out of it,\u201d says John Mavrogenes, an economic geology professor at Australian National University. \u201cIf we were to get serious, we need to go further down[stream].\u201d<\/p>\n
Europe has turned to Australia to supply its factories converting rare earths into the permanent magnets needed to power green technologies. In September, Canada\u2019s Neo Performance Materials opened what it describes as Europe\u2019s first mass-scale production plant for these magnets in Estonia, announcing that the feedstock comes from Australia.<\/p>\n
Neo\u2019s vice president for corporate development, Vasileios Tsianos, tells fDi<\/strong> that rare earths major Lynas is a supplier. Meanwhile, ASM\u2019s first commercial sales of terbium and dysprosium metals was a sample sent to the Estonia plant. Hastings Technology Metals also has an agreement with Neo to explore supplying the Estonia plant in future, and a similar pact with Solvay, which is developing a magnet facility in La Rochelle, France. <\/p>\n No free market<\/strong><\/p>\n The Estonia factory opening has shone a light on Australia\u2019s important role as a source of rare earths to build supply chains beyond China<\/a>, but also its need to expand downstream capacity. <\/p>\n Tim Buckley, director of think-tank Climate Energy Finance, is among those calling on Australia to do more \u201cvalue-add\u201d to its resources, arguing: \u201cWe\u2019ve been a quarry to the world for too long.\u201d<\/p>\n Lynas is the largest separator of rare earth oxides outside China thanks to its plant in Malaysia, but it also operates a processing facility in Australia. The country\u2019s only other two notable downstream projects are separation plants being developed by Illuka Resources in Western Australia and Arafura Rare Earths in the Northern Territory. <\/p>\n Illuka has received A$1.65bn ($1.08bn) and Arafura A$800mn in debt support via the government\u2019s Critical Minerals Facility. The Future Made in Australia Act, which was introduced last year, also offers a 10 per cent tax credit for rare earth processing and refining. <\/p>\n