Inside Australia's billion-dollar bid to take on China's rare earth dominance

Australia is making a major move to challenge China's control over the rare earths market. Rare earths are a group of 17 minerals that are essential for making products like electric vehicles, wind turbines, and military equipment. Although these minerals are not actually rare, they are critical because they are used in many small but important parts of modern technology. Right now, China dominates the rare earths industry, mining more than half of the world's supply and processing almost 90 percent of it. This means that countries like the United States and those in Europe rely heavily on China for these minerals.

In Western Australia, near a town called Eneabba, there is a huge pit filled with what looks like ordinary dirt. However, this dirt contains a million-tonne stockpile of rare earths, collected by a company called Iluka Resources. The stockpile is worth more than $650 million, and the Australian government is supporting Iluka with a $1 billion loan to build a refinery. This refinery will help separate and clean the rare earths so they can be used in manufacturing. The goal is to create a new supply chain for rare earths that does not depend on China. This is important because China has used its control over rare earths as a bargaining tool in trade negotiations, even causing companies like Ford to stop production when supplies ran short.

Iluka Resources has been mining other minerals for years, but the byproducts of their work include valuable rare earths like dysprosium and terbium. Processing these minerals is difficult and expensive because they are chemically similar and often produce radioactive waste. The Australian government sees investing in rare earths as a strategic decision to support industries and national security. Australia's resources minister, Madeleine King, says that having an independent supply chain is crucial for businesses. The new refinery is expected to be ready in two years, and automakers are already asking about future supplies.

However, there are challenges. Processing rare earths can cause pollution, and critics say that China's weak environmental regulations have led to serious damage, including chemicals and radioactive waste leaking into waterways. Australia has stricter rules and hopes to handle the waste responsibly. The European Union has accused China of using its near-monopoly on rare earths to gain an advantage in key industries. Even though China has loosened some restrictions, the risk of supply chain shocks remains. Australia is working to become a cleaner, more reliable, and independent source of rare earths, which could help the world rely less on China in the future.