Minister for Resources and Northern Australia, Matt Canavan today held talks with U.S. Commerce Secretary, Wilbur Ross and other officials in Washington DC to strengthen U.S.-Australia ties on critical minerals and rare earths. The US-Australia Critical Minerals Dialogue talks agreed that each country’s respective export finance agencies will work together at financing potential critical minerals and rare earths projects. The Dialogue also agreed to plan for another follow-up meeting in February 2020.
“I have now met with Wilbur Ross several times to discuss our bilateral cooperation on critical minerals. I’m leaving the United States satisfied that we have made significant progress through the Critical Minerals Dialogue, today bringing other parties to the table for discussion,” Mr. Canavan said. Participants in the Washington talks included Secretary Ross and officials from the US Department of Commerce as well as officials from the U.S. Department of State, U.S. Department of Energy, U.S. Department of Interior and the U.S. Geological Survey.
The Coalition Government announced last week that projects to extract critical minerals would be eligible for support through Export Finance Australia (EFA), including the Defense Export Facility. “Today’s meetings laid the ground for collaboration between the US and Australia on financing. This work will offer opportunities for new projects to get off the ground. The growing global demand for critical minerals will provide scope for Australian miners to enter stable and secure supply chains to meet growing demand in key economies such as the US.
“Critical minerals and rare earths are becoming increasingly important products in our modern world and Australia has key supplies of these products. With the increasing global uptake of electric vehicles, smart phones, renewable energy and defense applications which need these minerals, Australia is well placed to grasp opportunities.”
“The US has a need for critical minerals and Australia’s abundant supplies makes us a reliable and secure international supplier of a wide range of those, including rare earth elements.”
The US critical minerals list includes 35 minerals. According to Geoscience Australia, the new agreement “focuses on joint critical mineral potential mapping and quantitative mineral assessments; determining geological controls on critical mineral distribution; and developing data analytics capability to understand supply and demand scenarios for developing the critical minerals pipeline.”
Canavan and the Australian government were quite optimistic heading in to the talks last week, saying on November 15 that the high-level talks between the two governments would be used as an opportunity for Australia to talk up its role in the critical minerals supply chain. Australia has long been aware of its unique position when it comes to rare earths and critical minerals, with the country home to the world’s only major rare earths producer outside of China in the form of Lynas as well as a handful of shovel-ready rare earths projects scattered throughout the country.
Speaking at the International Mining and Resources Conference (IMARC) in Melbourne last month, David Grabau, who is the senior investment specialist for resources and energy at Austrade, noted that the US had proven itself to be a unique opportunity for Australia given the federal government there didn’t control the critical minerals supply, putting the Australian government in an ideal position to spruik its own market.
The approach to the news that Australia and the United States had signed a formal agreement to collaborate on critical minerals was very different between the countries, with the Australian government highlighting the financing opportunities of the agreement, while the US Government focused on national security. US Secretary of the Interior said in a release that the formalization of the agreement was “an important milestone in reducing the (United States’) susceptibility to critical mineral supply disruptions.”
The US has been casting around for alternatives to the current supply chain for critical minerals, with China singled out in its “Federal Strategy to Ensure a Reliable Supply of Critical Minerals,” which it published in mid-2019. Along with Australia, the US has also been seeking to do deals with neighboring Canada. China’s dominance of the critical minerals supply chain is well-known, with more than 70 percent of global rare earths production centred there, along with large swathes of downstream processing capacity across the critical minerals sector.
The supply chain of these minerals has been increasingly in the spotlight as the US-China trade war grinds on through 2019. Various sections of the American government have been focusing their attention on the issue, and China has previously restricted rare earths exports to Japan to prove a point.
In mid-November, China announced an increase to its rare earths production quota in response to increased demand.
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