As the demand for rare earth elements (REEs) escalates, Australia finds itself at a pivotal juncture in the global supply chain. Recent reports from Adamas Intelligence shed light on the shifting landscape, particularly regarding the competition between China and non-Chinese producers. With China’s domestic needs for neodymium iron boron (NdFeB) magnets increasing, the implications for Australia and other nations are significant.
The landscape of rare earth production is undergoing a transformation, with the potential for Australia to become a key player.
The global mine-to-magnet supply chain is being scrutinized as countries strive to enhance their production capabilities and reduce dependence on China. This article explores Australia’s current standing, production capacities, and emerging projects within the REE sector.
Table of Contents:
Australia’s production capabilities
A recent assessment by the Association of Mining and Exploration Companies (AMEC) highlighted Australia as one of the top holders of rare earth resources, ranking fourth globally. With an estimated reserve of approximately 5.7 million tonnes of rare earth elements, Australia is significantly behind China, which leads with 44 million tonnes. However, the Australian production landscape is promising, with the country also ranking fourth in terms of actual output.
According to the US Geological Survey, around 390,000 tonnes of rare earths were produced worldwide in, with China contributing a staggering 270,000 tonnes, accounting for roughly 70% of the total output. In contrast, Australia produced only 13,000 tonnes, primarily from the Lynas Rare Earths’ Mt Weld mine. This facility stands out as the only significant producer of separated rare earth materials outside of China.
Key facilities and advancements
The Mt Weld mine, located in Western Australia, is a critical asset in the global REE landscape, with a resource estimate of 106.6 million tonnes at an average grade of 4.12% total rare earth oxide (TREO). Lynas operates a processing facility in Kalgoorlie, which is recognized as the first of its kind in Australia. The materials processed here are further refined at Lynas’ plant in Malaysia, ensuring a comprehensive supply chain.
In May, Lynas achieved a significant milestone by producing dysprosium oxide for the first time at its Malaysian facility. This development is seen as a crucial step towards enhancing supply chain resilience and providing customers with alternatives to Chinese suppliers. The company has also announced plans for further expansion, including a new Heavy Rare Earth (HRE) separation facility to meet growing global demand.
Emerging projects and investments
Several Australian companies are stepping up their efforts in the rare earths sector, driven by government support and increasing global demand. The National Reconstruction Fund (NRFC) has committed AU$200 million to the Arafura Rare Earths’ Nolans project, which aims to be Australia’s first ore-to-oxide processing operation. This facility is expected to contribute significantly to the global supply of neodymium and praseodymium by 2032.
Additionally, Iluka Resources received AU$400 million in funding for its Enneaba rare earths refinery. This project aims to position Western Australia as a strategic hub for downstream processing, targeting the production of various essential rare earth elements starting in.
Strategic partnerships and future outlook
Looking ahead, the strategic acquisition of Australian resources is becoming increasingly attractive. For instance, Energy Fuels is proposing to acquire Australian Strategic Materials, which includes the Dubbo rare earths project. This move is aimed at establishing a comprehensive supply chain from mining to metal production.
As Australia continues to develop its rare earth capabilities, it is crucial to address the challenges of processing and exporting materials. The government is actively pursuing policies to accelerate domestic processing capacity, which is vital for reducing reliance on China. According to industry insights, Australia could potentially increase its production share to 20-25% of the global rare earth output by 2030 if it maximizes its resources effectively.
In conclusion, Australia’s position in the rare earth elements market is set to evolve significantly by 2040. As global demand rises, the potential for Australia to become a central player in the REE supply chain is evident, provided that it can enhance its processing capabilities and foster strategic partnerships.
