China’s ban on the exportation of rare earth element (REE) technologies has reignited REE supply and processing deficiency concerns amongst ASX-listed juniors and industry stakeholders.
Mining executives and industry sources polled by Mining.com.au agree that while China prohibiting the exports of its industry knowledge is nothing new – nor anything to be concerned about – the main question they say is where domestic REEs production and downstream processing opportunities will come from.
China dominates the global REEs sector with the world’s second most populous country responsible for almost three quarters of rare earths ore extraction and the lion’s share of ore processing.
On the back of China’s latest ban, Australian Resource Minister Madeleine King promised the federal government will inject $22 million into various Australian organisations to find alternative solutions and develop REE projects.
King says this is because the path to net zero by 2050 runs through Australia’s resources sector.
“The new research will help Australia further develop critical minerals and rare earths processes and encourage downstream processing to produce components for clean technologies.”
The organisations to receive government funding include the CSIRO, the Australian Nuclear Science and Technology Organisation (ANSTO), and Geoscience Australia.
Speaking to Mining.com.au, ANSTO Senior Process Chemist Chris Griffith says China’s decision to ban REEs related technologies reinforces Australia’s dependency on one major supplier and processor.
“Any such measures serve to contribute to the instability / uncertainty of REE supply chains which has flow-on effects into almost every aspect of Australian life due to the widespread use of REE magnets in personal and handheld devices, automobiles, electric motors of all varieties, and renewables technologies.
As a nation with exceptional resources of REEs but a strong dependence on import of goods based on REE magnets, it is of course a logical outcome that we would examine our role in diversifying supply to remove the instability / uncertainty surrounding their supply chains.”
Shoring up supply
Sharing these sentiments is OD6 Metals (ASX:OD6) Managing Director and Chief Executive Officer (CEO) Brett Hazelden. He tells this news service China’s ban was not much of a surprise but reinforces the need for Australia to develop more of its own technologies and not stay middle of the road.
“The reality is that there has been a ban on China exporting their knowledge for a long time now which has only recently been understood by some of the commentators in the industry plus the government.”
Hazelden says the real issue arising from the fallout of China’s decision is where the new supply of REEs will come from to develop the new Australian alternatives.
“The question really is where is all the supply going to come from and where will it be processed to a final product. Currently China controls and manipulates the rare earth market which is also why we are seeing China taking over the EV car market and controlling supply.
Will the new supply come from mines in other countries backed by China processing technology and money or Western countries like Australia and the US using newly developed technology and downstream factories?
Maybe the answer is who can produce the most cost effective EV.”
“Will the new supply come from mines in other countries backed by China processing technology and money or Western countries like Australia and the US using newly developed technology and downstream factories?“
OD6 Metals is a critical mineral explorer and developer which has developed a relationship with ANSTO and the CSIRO for a number of years to expand on both agencies’ existing knowledge and development of REE technology outside of China.
ABx Group (ASX:ABX) MD and CEO Dr Mark Cooksey believes an answer lies in Australia’s clay-hosted REE deposits, which the company has within its portfolio, yet questions about supply remain.
“Overall I think this announcement in itself is not that significant. It’s almost a streamlining of [China’s] current restrictions. The fact that China’s made this announcement just illustrates the supply chain risks. But it hasn’t actually changed anything.
Particularly in the case of the clays, I think it’s feasible that they could be producing in the next 3, 4, or 5 years. The hard rock ones tend to have a longer time frame, but there’s some projects that are already more advanced.
If a Western company needs magnets with rare earth in them, that’s risky at the moment, especially if you need a lot more magnets in the next five or ten years. How do we get it? We don’t know how we’re going to [do it].”
ABx is a diversified minerals explorer focused on its Australian assets, including its Deep Leads REE Project in Tasmania. The company’s REE mineralisation at Deep Leads is enriched with minerals required in the super-magnet suite of rare earths needed for the transition to decarbonisation, especially Nd and Pr (see image below).
REEs represent an important commodity given its strategic applications and ‘unique’ catalytic, metallurgical, nuclear, electrical, magnetic, and luminescent properties, according to Geoscience Australia.
The commodities are key for the development of electric vehicles (EVs), batteries, and other electrical appliances crucial for Western nations to achieve net zero carbon emissions amid the ‘green’ revolution.
China is the dominant figure in the supply chain of REEs (accounting for 70% of global REE ore extraction and 90% of ore processing as per the Oxford Institute for Energy) — announced in December 2023 it would be banning the exports of technologies to make REE magnets.
REE magnets represent key components for the EV and broader decarbonisation markets, as well as the defence and military sectors.
The super-magnet suite of REE comprises neodymium (Nd), praseodymium (Pr), dysprosium (Dy), terbium (Tb) and samarium (Sm). They are in short supply and are needed for use in EVs, wind turbines, smartphones, computers, and military applications.
Write to Adam Drought at Mining.com.au
Images: ABx, ANSTO & OD6
