Tue, 12 Aug 2025

Tue, 12 Aug 2025 Inside Australia's billion-dollar bid to take on China's rare earth dominance

Recent moves by Beijing have got businesses worried - and Australia is looking to offer an alternative.
In a vast mining territory north of Perth, Australia, lies a massive pit containing 1 million tonnes of critical minerals known as rare earths. These elements are crucial for making electric vehicles, wind turbines, and defense equipment. The Australian government has loaned $1 billion to Iluka Resources to extract these metals from the site, aiming to disrupt China's monopoly on rare earth supply chains. China's control over rare earths has been a major concern due to its ability to restrict exports as a bargaining chip in trade negotiations. In 2019, Beijing restricted exports of rare earth minerals and magnets, leading to shortages for companies like Ford Motor Company. The US relies heavily on China for its rare earth imports, with the European Union also dependent on Chinese supply chains. However, experts warn that without alternative sources, manufacturers will remain vulnerable to supply chain disruptions caused by China's control. Iluka Resources has been mining zircon in Australia for decades and has built up a $650m stockpile of dysprosium and terbium, two of the most sought-after rare earths. The company is now building a refinery with government support to process these minerals and meet growing demand for rare earths. The Australian government sees its investment in Iluka's rare earths project as necessary to provide an alternative supply chain outside of China. However, concerns remain about pollution associated with the processing of rare earths, which involves extraction, leaching, thermal cracking, and refining that produce radioactive components. Experts warn that building a new industry will take time, but Australia seems to have a competitive advantage in the rare earths market due to its cleaner sources and independence from China.
  >>