Australia’s Rare Earth Highway: A Race to Resilience or Dominance?

Abstract

The anticipated global demand for rare earth elements (REEs) is projected to reach 315,000 tonnes by the year 2030, which can be mostly attributed to the worldwide transition towards clean technology, including electric vehicles, wind power, and solar power. The expanding demand, and the increasing control of China over the REE supply chain have prompted the formation of collaborative resilience initiatives at both bilateral and global levels.

A secure rare earth supply chain requires resilience in three main components: upstream (extraction and separation of rare earth oxide); midstream (processing of rare earth metals and alloys); and downstream (manufacturing of permanent magnets and end-products). It is noteworthy that China dominates in all the components; thus, a robust and dependable network of countries with thriving economies is required to maintain resilience within the environmental, social, and governance (ESG) frameworks. Although the capacities of the upstream and midstream sectors have witnessed expansion in most countries, downstream capacities are still underdeveloped, which makes it imperative to foster collaboration. Within these resilience initiatives, Australia is well-positioned to fill the gap for advancing downstream capacities outside China, considering its abundant resource endowment, strong mining capacity, and well-established processing infrastructure.