Australia's plan to challenge China's dominance in critical minerals and rare earths | The Business
China dominates the entire rare earths ecosystem. Around 90 per cent of all rare earths are refined in China. But when it comes to heavy rare earths — which now are required for ultra-high technology uses — it has a complete monopoly.
Companies or countries that produce rare earths ship their raw material to China for processing, leaving Beijing with almost complete control over marketing and pricing.
While almost any mineral element can be regarded as a “critical mineral”, the term is usually reserved for elements crucial for battery development or renewable energy sources.
Chief business correspondant, Ian Verrender explains to The Business host, Kirsten Aiken, that to maintain its monopoly, Beijing has never been afraid of using its market power.
He says it has alternatively flooded markets with material to make it uneconomic for others to establish rival industries, or denied access to refined product to others as punishment.
Such overwhelming supply domination, and the pricing power that comes with it, has raised questions over whether governments should continue to allow market forces to determine the supply of materials vital for national security and development in an increasingly divided world.
Hence, the Albanese government’s initiative to help fund a critical minerals stockpile, to create a local industry and to expand negotiating leverage with an increasingly capricious US government on trade negotiations.
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