Cooperation is key for Australia's rare earths sector growth

Cooperation is paramount for the future growth of Australia's resources sector, a key message resonating at the 35th Diggers and Dealers Mining Forum in Kalgoorlie-Boulder. The annual event brings together industry heavyweights, from those working at the coalface to major financial backers, to facilitate deals and discussions.

Amidst the bustling activity, Iluka Resources, a taxpayer-backed company, is making significant strides in establishing a $1.8 billion rare earths refinery in Western Australia's Midwest. This project aims to address the global concentration of rare earth supply, with approximately 90 percent currently originating from China.

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We've got a lot of discussions ongoing with a lot of parties, but all of those discussions are confidential because right now those supply chains rely on rare earths from China.

Dan McGrath, Iluka's head of rare earths, emphasized the need for confidentiality in ongoing discussions with various parties. "We've got a lot of discussions ongoing with a lot of parties, but all of those discussions are confidential because right now those supply chains rely on rare earths from China," he explained. This secrecy is a strategic necessity to mitigate the risk of China potentially cutting off supply before Iluka's refinery becomes operational next year.

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The world needs more rare earths and those manufacturing supply chains are currently captive to the whim of the Chinese government, which has had a tendency over the years to weaponise the rare earths supply chain.

In June, Iluka signed its first offtake agreement with an undisclosed global car manufacturer to supply magnet rare earth oxides starting in 2028. This $US155 million ($220 million) deal will support the initial four years of operations at Iluka's Eneabba refinery. The plant, located about 280 kilometers north of Perth and currently 60 percent complete, will produce critical materials like neodymium, praseodymium, terbium, and dysprosium. These elements are vital for manufacturing high-tech magnets used in electric vehicles, wind turbines, and defense systems.

Critical mineral supply chains, especially rare earths, have become a major focus for Western governments. The Eneabba refinery project itself is supported by a substantial $1.65 billion loan from the federal government's Critical Minerals Facility. McGrath stressed the importance of the Australia-United States relationship, noting that "the world needs more rare earths and those manufacturing supply chains are currently captive to the whim of the Chinese government." He added that Australia and other like-minded nations recognize the need for a sovereign source of rare earths outside of China, engaging in discussions with partners in the US, Europe, and Japan.

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Australia and other like-minded and economically liberal nations realise that their own domestic, sovereign manufacturing capacity needs a source of rare earths that's outside of China.