Australia Eyes Rare Earths Production Boost

Australia’s Arafura Resources is planning to develop mine and processing facility for two critical rare earth elements, neodymium and praseodymium (NdPr) in the province of Northern Territory. Despite being in one of Autralia’s hottest and driest regions, Arafura believes the investment in the Nolans Project will have lucrative returns. The company thinks the processing facility could produce up to 5% of global demand for NdPr, which are used in high-power magnets used in electric vehicle (EV), renewable energy and electronics industries.

China currently dominates the mining and processing of these rare earth minerals, but geopolitical and trade concerns have pushed the Western governments and industries to find ways for alternative supply chains.

Australia has an experienced mining nation and one of the world’s biggest exporters of iron and coal. Thanks to those characteristics, the country is well placed to join the race to exploit minerals that provide critical parts for EVs and wind turbines.

“This could certainly be a game-changer for Australia. We are relatively well-endowed in rare earth elements,” Arafura Managing Director Lockyer said. He added that it is relatively easy to find a rare earths deposit but what is hard is to find economically feasible quantities.

“It is important to note that an electric vehicle might only have A$200 ($140) or so of NdPr in it, but without it that electric vehicle will not work efficiently. Similarly with the wind turbines,” Lockyer pointed out.

In addition to their civil applications, rare earths are also used in fighter jets, guided missiles and drones, along with other high tech military equipment.

The U.S. Department of Defense has recently authorized Australia’s Lynas Rare Earths to build a multi-million dollar processing site in the United States in order for it to reduce dependence on China for strategic minerals.

Lynas is the world’s only significant rare earths producer outside China and runs the Mount Weld mine in Western Australia.

The Biden administration has been ramping up efforts to create alternative supply chains for critical mineral supply chains. The U.S. Energy Secretary Granholm warned recently at a conference in Sydney that China was “big-footing” renewable energy technology and supply chains.

Experts also underline that Beijing could weaponize its control of the supply of rare earths. After a dispute between a Chinese fisherman and Japanese patrol boats in 2010, China stopped rare earths supply to Japan.

Australian experts have also said that more recently China threatened to limit rare earth shipments to American defense contractors because of U.S. arms sales to Taiwan.

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