VINACHEM

Australia's government will funnel 22 million Australian dollars ($14 million) into rare earth and critical mineral research as it endeavors to be a "global clean energy supplier," its resource minister said on Monday.

"The path to net zero by 2050 runs through Australia's resources sector," Madeleine King said. "The new research will help Australia further develop critical minerals and rare earths processes, and encourage downstream processing to produce components for clean technologies."

Those technologies include electric vehicles, batteries and wind turbines.

The package is part of a broader Australian government-backed, multi-billion dollar push that has two goals: to stake out a place in the global supply chains feeding the green energy transition and to reduce reliance on China, a major supplier and the main processor and refiner of the vital metals.

The announcement comes weeks after China tightened export controls on technologies used to turn rare earths into permanent magnets, a core component of EV engines and wind turbines.

The funding announced by Australia will be split between three projects.

Almost AU$14 million will go to the Australian Nuclear Science and Technology Organisation (ANSTO) for research to accelerate the discovery, extraction and processing of rare earth elements from lower-grade deposits.

Another AU$5 million was awarded to the Commonwealth Scientific and Industrial Research Organisation (CSIRO). The government research agency will develop "intellectual property and knowhow" to support downstream industries for metals including lithium, tungsten and rare earths.

In addition, Geoscience Australia received AU$2.7 million to explore the development of a domestic industry for gallium, germanium and indium.

Gallium and germanium, which are important elements in chipmaking, were among minerals placed under export controls last year by Beijing amid rising tensions with the U.S.

As the world acts to tackle climate change, critical minerals and rare earths have emerged as a major geopolitical issue, with China moving to protect its dominant position in supply, processing and refining, leaving Western and other countries to look for alternatives.

Australia is home to Japan-backed Lynas, the only rare earth miner and producer possessing supply chains outside of China, with its refining facility based in Malaysia.

Under Scott Morrison, Australia's former prime minister, the government in 2022 approved a AU$1.25 billion loan to critical minerals company Iluka Resources to develop the country's first rare earths refinery in Western Australia.

Then in October, Prime Minister Anthony Albanese's Labor government announced a AU$2 billion expansion to its Critical Minerals Facility, a fund that finances projects in line with the Critical Minerals Strategy.

The Australian government has also set up a task force with counterparts in the U.S. to "increase investment in critical minerals mining and processing projects in our respective countries and enhance market transparency in this sector."

But closing the gap with China will be extremely challenging, if not impossible, according to some analysts. The country accounts for 70% of the global rare-earth supply, 85% of rare-earth processing, and 90% of rare-earth magnet production.  – Nikkei –