SYDNEY: A new minerals agreement between Australia and the United States could soon challenge China’s total domination of rare earths production according to a leading mining executive.
United States President Donald Trump signed the breakthrough deal this week with Prime Minister Anthony Albanese granting American access to Australia’s extensive rare earths and critical minerals reserves.
Arafura Resources chief executive Darryl Cuzzubbo stated that developing projects outside China would benefit global market stability.
Cuzzubbo explained that China has historically controlled the rare earths market through price manipulation of these essential components for solar panels and precision missiles.
He expressed concern about China using its 90% production control as a geopolitical tool against manufacturing nations.
The mining executive highlighted that the partnership provides investor confidence that like-minded countries will actively work to change China’s market dominance.
The agreement essentially involves United States financial support for Australian rare earths projects in exchange for preferential mineral access.
Australia excels at mineral extraction but traditionally struggles with onshore processing capabilities similar to most mining nations.
More than 90% of Australia’s lithium currently gets shipped to Chinese refineries annually despite the country’s substantial mineral reserves.
Arafura Resources secured financing through this new agreement to rapidly expand its refining capacity for rare earth elements.
Another Australian firm Lynas Resources holds a 258 million US dollar contract to construct a rare earths refinery in Texas according to the announcement.
Cuzzubbo predicted ongoing market negotiations with China until diversified supply chains become fully established worldwide.
He suggested China would maximize its current advantage knowing that control could diminish within three to five years.
Industry analysts believe Australia will unlikely match China’s massive refined rare earths production scale in the foreseeable future.
Even achieving a small fraction of China’s processing capacity could significantly loosen Beijing’s market stranglehold according to experts.
The Centre for Strategic and International Studies recently identified Australia as America’s most crucial partner in countering Chinese rare earths dominance. – AFP
