Australian rare earth miners push development deals to counter China grip

Australian rare earth miners push development deals to counter China grip

Rare earth developers in Australia say they are edging closer to signing deals with new customers that would drive forward their projects amid mounting global supply concerns over the minerals that are crucial to high-tech industries, reports Trend with reference to Reuters

Australia contains only 2.8% of the world’s rare earth reserves, according to the United States Geological Survey. However, the country accounts for more than half of the new projects in the global pipeline, according to data compiled by the Western Australian School of Mines (WASM) at Curtin University.

Rare earths are a group of 17 minerals critical to a wide array of industries from high-tech consumer electronics to electric vehicles and sophisticated military equipment.

Most of Australia’s projects, however, have been stuck as developers struggle to secure financing because of the domination of China, which accounts for about 90% of global rare earths processing capacity and one-quarter of the world’s reserves.

Even the projects closest to start-up are unlikely to begin operations until 2023 at the earliest, the WASM data shows.

Still, those projects may speed up amid the escalating trade war between the United States and China. The United States imports 80% of its rare earths from China, where state-owned news outlets have reported it could cut its shipments to the U.S. as part of the dispute.

Northern Minerals, which is developing the Browns Range project in Australia’s northwest, said last week that it was in “discussions with an internationally recognized industrial group” for supply.

“The level of interest has increased since the increased news focus on the issue,” a company spokesman said this week.

Hastings Technology, which is readying its Yangibana rare earths project in Western Australia for late 2021 production already has one preliminary supply agreement with Germany’s Thyssenkrupp and signed another with automotive supplier Schaeffler AG last week.

“We are working on another German supply agreement which we expect to tie up this year,” said Charles Lew, Hastings’ executive chairman.

Additionally, Hastings is receiving financing from Germany’s strategic minerals procurement body, he said.

The prospects for Australia’s rare earths industry are picking up based on growing demand expectations.

The U.S. said this week it would look to Australia and Canada to develop rare earths reserves around the world to reduce the global reliance on China.

A Thyssenkrupp spokesman said last week that “in the area of rare earths we are regularly on the lookout for new partners to serve the growing global demand.”

The reason rare earths projects outside of China have not advanced is because China’s vast production, underpinned by cheaper labor and less stringent environmental regulations, means no one else can compete on cost, said WASM Professor Dudley Kingsnorth.

Australia’s Lynas Corp, the world’s only rare earths producer outside of China, has been supported by low interest loans from Japan’s government. Last month Lynas outlined expansion plans including building a U.S. processing plant.

Kingsnorth estimates the world will need 75,000 tonnes of rare earths per year to be independent of China by 2025. However, his projections are that the rest of the world will only be producing 50,000 tonnes independent of China by that time.

End-users are not willing to invest in mines that are years away from production and more costly than in China, he said.

However, companies are not pricing in the risk of a politically driven supply disruption, he said.

“It’s not about being competitive with China, it’s do you get your metals or not?” said Kingsnorth.

Without government support, most new projects will struggle to see the light of day, said a resource companies analyst who declined to be named because of company policy.

Especially if companies are planning to build processing plants, the cost of which can be an order of magnitude more than the value of the companies building them, he said.

For example, Australian rare earths miner Arafura Resources, a company with a market capitalization of A$77 million ($53.24 million), is seeking to secure $1 billion in funding for its project that includes a processing plant.

Arafura and fellow miner Alkane Resources met with U.S. defense officials as part of an Australian trade delegation in February but returned empty handed, executives from both companies said.

“The conundrum that’s occurring is do or don’t people wish to put money on the ground to pay higher costs to mitigate risk?” said Alkane’s Managing Director Nick Earner.

Subscribe to Trend in Google News! Subscribe
U.S. job growth misses expectations in Nov.
U.S. job growth misses expectations in Nov.
New U.S. COVID-19 international travel testing rules take effect Monday
New U.S. COVID-19 international travel testing rules take effect Monday
Oil rises on OPEC+ plan to meet if Omicron hits fuel demand
Oil rises on OPEC+ plan to meet if Omicron hits fuel demand
Loading Bars
Latest
UK records more than 50,000 new coronavirus cases
Italy's economy projected to grow 6.3 pct this year
Kazakhstan decreases petroleum gas export to Hungary amid global pandemic
Militants kill 7 soldiers in Nigeria's northeastern Borno state
Iran nuclear talks adjourn, resume next week
South Africa hit by fourth COVID wave driven by Omicron
Budget for social rehabilitation and childcare to reach 52 mln GEL next year, Georgian PM says
Putin informs Erdogan on main results of Sochi trilateral meeting
Turkey introduces action plan to improve lives of the disabled
Construction of 50MW solar power plant underway in Kazakhstan
Azerbaijani FM, OSCE rep exchange views on OSCE Charter (PHOTO)
Human remains discovered in Caspian Sea and recovered - SOCAR
Iran highlights need for more customs cooperation with Pakistan
bp discloses investments in construction of power plant in liberated Azerbaijani lands
Turkmen gas may be supplied to Europe via Caspian Connector project - ambassador
Turkish, Russian Presidents hold phone talks
Azerbaijan’s Pasha Holding talks about development strategy
Azerbaijan's Heydar Aliyev Foundation, UNICEF sign another memorandum of understanding (PHOTO)
Azerbaijan shares data on number of vaccinated citizens
Azerbaijani, Turkish military pilots conduct joint training flights in Baku (PHOTO/VIDEO)
Azerbaijan confirms 1,703 more COVID-19 cases, 2,180 recoveries
Turkmenistan can supply natural gas to European market until 2050 - ambassador
Azerbaijan discloses export volume of petroleum coke
Azerbaijan's Finance Ministry to auction gov't bonds via Baku Stock Exchange
SOCAR begins testing of new mobile diving complex
Israeli co Fireblocks raising $400m at $8b valuation
Croatia remains one of Russia’s key partners in EU
Value of goods transported via road increases in Azerbaijan
U.S. job growth misses expectations in Nov.
Policy and Management Consulting Group shares data on Georgia’s economic outlook
Georgia, Qatar discuss favorable investment climate
Price indexes of financial, trade sectors at Uzbek stock exchange fall
Uzbekneftegaz obtains new industrial gas flow from Kulbeshkak field
Uzbek Statistics Committee shares data on imports of meat for 10M2021
Georgia’s economic climate remains stable – PMC
Uzbekistan reveals volume of bank loans allocated to various sectors of economy
Iran, Turkmenistan and Azerbaijan gas swap - win-win deal, says Iranian analyst
FMs of Azerbaijan, Poland hold meeting within OSCE Ministerial Council
Co-op between Turkmenistan, EU to focus on improving business climate till 2027
Azerbaijan's food import volume down for 10M2021
Zones free from animal diseases being created in Azerbaijan’s Karabakh, East Zangazur
Azerbaijan considers opening Indonesian Chamber of Commerce
Azerbaijan increases chemical production volume for 10M2021
Azerbaijan, Turkey begin work on establishing joint university - minister
Azerbaijan’s liberated territories have several types of renewable energy sources– RES agency
Azerbaijani parliament adopts amendment to servicemen insurance law
Azerbaijan may exempt sale of electric cars from VAT
Azerbaijan introduces excise taxes on electronic cigarettes, shisha
Concept for creation of "green energy" zone in Azerbaijan’s liberated territories prepared
Transaction to sell Chinese oil company’s stake in Azerbaijan closed
Output volume at Azerbaijan’s Kursangi, Garabagli fields revealed
Austrian interior minister becomes candidate for country’s next chancellor
Azerbaijan begins geological exploration at Tutkhun gold deposit in Kalbajar
Iran to import hay from Russia
Uzbek home appliance manufacturer Artel joins United Nations Global Compact
Economic stability - framework of Iran`s next year budget
BioNTech CEO confident of quickly adapting vaccine for Omicron
Situation is still fragile in South Caucasus - OSCE Chairperson-in-Office
Azerbaijan to strengthen social protection of population in 2022 – PM
Azerbaijan may exempt import of books and paper from VAT
Iran reveals its non-oil trade in 7 months
Iran aims to build new oil, gas refineries amid growing consumption
Uzbek Central Bank shares data on leading banks in terms of loans
Azerbaijani PM talks on measures to curb price increase
Iran seeks to establish joint banking network with Syria
Azerbaijan to expand agriculture dev’t in Karabakh in 2020 – minister
Demining of water basins in Azerbaijan's liberated Fuzuli, Aghdam underway - ministry
Azerbaijan removes electronic bracelets from 134 convicts within amnesty act
India seeks strong ties with EU, cooperation in transition to clean energy
Dubai's DP World pulls out of Haifa port privatisation bid
Azerbaijani Artillery Units hold live-fire exercises (PHOTO/VIDEO)
Azerbaijan to change state duties on issuing registration plates of road vehicles
Georgian business sector sees average monthly salary increase
Cementing ties with France, UAE places $19 bln order for warplanes, helicopters
Azerbaijan preparing development strategy for Karabakh - Karabakh Revival Fund (PHOTO)
Man of Armenian origin who attacked Azerbaijani soldier neutralized – MoD
Azerbaijan releases 14 prisoners from correctional institution № 16 as part of amnesty act (PHOTO)
Azerbaijan releases 122 prisoners from correctional institution within amnesty act (PHOTO)
Australia calls on Azerbaijan, Armenia to delimit and demarcate state borders
Azerbaijan sees growth of trading via Baku Stock Exchange
Azerbaijan to release 65 female prisoners within act of amnesty
Georgia’s domestic supply of natural gas slightly decreases
Azerbaijan clears almost half of "Araz Valley Economic Zone" Industrial Park of mines - minister
Azerbaijan releases seven prisoners within act of amnesty (PHOTO)
Azernews newspaper selected as media partner of ECO from Azerbaijan (PHOTO)
bp is first company to use flexible approach in management of energy resources during pandemic
Turkey’s fuel exports to Georgia plummet
EU firms in infrastructure sector spent higher share of their investment on energy efficiency
Azerbaijan to strengthen control over allocation of subsidies
Share of EU firms investing in improving energy efficiency falls
Partnered with Azerbaijani banks, VISA actively developing technologies for issuing digital cards
Azerbaijan expands list of goods not covered by VAT refund
Georgia’s electricity exports triple
Azerbaijan’s justice ministry talks number of people released under amnesty act (PHOTO)
Further strengthening of Azerbaijan's army is one of important tasks – PM
Azerbaijan discloses expenses on COVID-19 vaccination
Opening of Zangazur corridor is one of most important issues – PM
Azerbaijani Parliament adopts amendments to Tax Code
Over half of EU firms affected by physical climate change risks
Russia records over 32,900 COVID-19 cases in last 24 hours
All news