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Australia unveiled on Wednesday a new support scheme for its domestic rare earths mining and supply chain industry as the U.S. ally looks to reduce global dependence on China for the minerals critical to technology manufacturing and the energy transition.
Australia’s government said it would allocate US$180 million (AUS$250 million) in the 2022-2023 budget to support the growth of Australia’s critical minerals sector and create a domestic supply chain of secure and stable rare earth metals supply. The federal government also announced over US$175 million (AUS$243 million) in support for four projects—an integrated nickel manganese cobalt battery material refinery hub, a project to process high-grade vanadium, a first of its kind rare earth separation plant in Australia, and a high purity alumina production facility.
According to Roskill, a Wood Mackenzie commodity research business, China accounted for 54 percent of global rare earth elements mining in 2021 and for a massive 85 percent of refined REE supply in the world.
“The geographic concentration of rare earth mining and refined production has long raised concerns over the potential for supply disruption and the wide-ranging end-use markets they serve,” Wood Mac’s analyst Ross Embleton and David Merriman, Manager, Battery & Electric Vehicle Materials, said in October 2021.
Commenting on the new Australian initiative, Minister for Industry, Energy and Emissions Reduction Angus Taylor said: “Australia is lucky to have some of the largest reserves of the critical minerals and metals which drive the modern global economy. But China currently dominates around 70 to 80 per cent of global critical minerals production and continues to consolidate its hold over these supply chains. This initiative is designed to address that dominance.”
“These investments align with the government’s commitment to securing our sovereign manufacturing capability, unlocking a new generation of high wage, high skill, high tech jobs by expanding into downstream processing, and will embed Australia in global supply chains for technology ranging from mobile phones to fighter jets,” Keith Pitt, Minister for Resources and Water, said in Australia’s 2022 Critical Minerals Strategy.
Australia’s goal is to become a critical minerals powerhouse by 2030, under its strategy, thanks to its high geological potential for a range of minerals, including critical minerals like cobalt, lithium, and rare earth elements.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.