Australia invests $550 mn in rare earths to lead energy transition

In a strategic move to strengthen its position in the global energy transition supply chain, the Australian government has announced an investment of $550 mn (A$840 mn) into a new rare earths project. Located in the Northern Territory, this venture, spearheaded by Australian mining company Arafura, will be the nation’s first combined rare earths mine and refinery.

Prime Minister Anthony Albanese, announcing the project, emphasised its role in shaping a future where Australia is positioned as a “renewable energy superpower”.

The government’s investment seeks to facilitate the project’s execution, which is expected to generate about 300 jobs and attract international financing. Minister for Resources Madeleine King highlighted the project’s significance in an interview with Australian broadcaster ABC, noting its potential to supply up to 5% of the global demand for rare earths.

“Rare earth supply chains are at risk around the world because these rare earths are hard to find and they are hard to extract and process,” she said.

Rare earths are integral to manufacturing high-technology devices, including smartphones, electric vehicles, and wind turbines.

This move by Australia aims to decrease reliance on China, which dominates the rare earths market, encompassing 70% of the supplies and 85% of the processing.

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The country is home to Lynas, the only rare earths miner and processor operating outside of China’s supply chains, underscoring the country’s pivotal role in diversifying global rare earths production.