Speech to the ANU-ASPI Rare Earths Conference

Delivered virtually

Before I begin, I would like to acknowledge the traditional owners of the land we’re meeting on – here in Canberra, the Ngunnawal and Ngambri people – and pay my respects to their elders, past, present. I extend that respect to all First Nations peoples in the audience today.

Together we all have an important role to play to ensure First Nations Australians sit at the table as a valued partner in all discussions and decisions.

They are the custodians of the land on which many resources projects are located.

Investments must benefit local communities, and lead to the creation of new and sustainable jobs, underpinned by social infrastructure and led by communities.

I’d like to thank the ANU Research School of Earth Sciences and the Australian Strategic Policy Institute for convening this conference, and for bringing you all together to discuss these issues, which are of growing importance.

As Minister for Resources and Minister for Northern Australia, my role sits at the nexus of important elements of the Government’s agenda:

  • economic growth;
  • regional development;
  • supporting the growth of new industries in the North;
  • implementing the Uluru Statement to the Heart and enshrining a Voice to Parliament
  • and of course, achieving net zero and supporting the clean energy transition.

Across Australia, and particularly in the North, we have an enormous amount of resources. Resources we – and the world – need to achieve net zero.

The resources industry of this country has generated the prosperity we all enjoy today.

A rich history of development has led us to the point where the industry accounts for our three largest exports and each of them – coal, iron-ore and liquified natural gas – are of enormous strategic importance to those nations we export them to. To build cities and infrastructure, and then to power them.

This important role for our traditional resources sector will continue while a new resources economy develops.

It is not widely understood how critical the resources sector will be in reaching these global emissions reductions targets.

In order to reach net zero emissions, the world will need to increase mining, not reduce it.

The world will need more minerals, not less.

This is a significant opportunity for Australia – for our resources sector and the workforce it supports; for Northern Australia; and for First Nations communities.

You all know how vitally important critical minerals – including rare earths – are.

They are key components for most of the technologies that are being embraced globally in the quest for a clean energy future: electric vehicles, batteries, solar cells and energy efficient technologies.

And rare earths are also an essential input to the advanced manufacturing, aerospace and defence industries of our allies and partners.

So their supply is as much a national security issue as one of energy and economic security.

Indeed it could be said Australia’s critical minerals are at the centre of an important moment in history which could dictate the shape of the world that we will live in for the next century.

The importance of ensuring resilient and diverse supplies of these valuable materials will heighten as demand for these products continues to grow.

Those in the room do not need reminding of the scale of demand for this industry into the future.  

I am here today to talk in more detail about how Australia is playing and will continue to play a global role in helping diversify these rare earths supply chains

And how – by working with like-minded international partners – we can help to promote geopolitical stability.

You all know that the rare earths permanent magnet supply chain is heavily concentrated.

China has the largest rare earth reserves globally; the highest production of rare earth concentrates; and controls as much as 85‑90 per cent of global production at various value-added stages of the supply chain.

In 2021, China produced 168 kilotonnes of rare earth oxide equivalent, almost four times more than the world’s second largest producer – the US – which produced 43 kilotonnes.

For rare earth magnets, it is estimated 174 kilotonnes of permanent magnets were produced in 2021 – with very little magnet production occurring outside China.

Japan, the second largest producer of permanent magnets, holds a market share of under 9 per cent.

It is a fact that the scale of China’s manufacturing and demand has played a key role in driving down the cost of crucial technologies like solar pv, batteries and electric motors.

But this level of supply chain concentration, regardless of where the concentration points lie, leads to significant vulnerabilities which have been all too apparent in recent years.

We have seen first-hand how the impacts of natural disasters; pandemics; and geopolitical events can rock fragile markets – from titanium, to gas and coal, to fresh fruit and vegetables.

Diversity of supply is an intrinsic good in these markets.

Establishing new sources of supply and demand, diversifying supply chains and bringing in new entrants provides a broader range of supply options.

Diversifying supply chains in rare earths and other critical minerals is about making these markets stronger, more efficient, more resilient and more transparent.

It is about taking practical steps to address the inherent vulnerabilities of concentrated supply chains.

Fortunately, Australia can have an outsized impact in helping diversify rare earths supply chains.

And we can do this to our benefit, and to the benefit of others around the world.

Australia is renowned for maintaining the highest environmental, social and governance standards, which supports our efforts to attract foreign investment.

Indeed, there is barely a month that passes in which I am not approached by representatives of other countries seeking access to Australian critical minerals.

Australia is already the fourth largest producer of rare earth concentrate and we have the potential for significant growth with high-quality deposits of both light and heavy rare earths.

I acknowledge Lynas in particular – and CEO Amanda Lacaze who will be speaking later today.

Lynas is the largest integrated rare earths producer of its kind outside China.

Its presence in Malaysia supports that country’s pivotal position in the global supply of separated rare earth elements. 

It is a testament to persistence and partnership building.

In this regard, we remain very pleased that the Australia-Japan partnership is demonstrated so positively and concretely through the Japanese Government’s far-sighted and patient investment in Lynas Rare Earths.

Australia can play a role in diversifying supply by not only increasing production of rare earths, but also by increasing our involvement in downstream processing.

But we must be realistic. This will require a sustained effort over the coming decades, underpinned by enduring collaboration with international partners and investors. There is no quick fix or easy answer.

In the lengthy and complex rare earth supply chain, Australia is currently only involved in mining and beneficiation.

We are moving to capture the next stage – cracking and leaching – on shore through projects like Lynas’ Kalgoorlie project, and Hastings’ Yangibana project.

The Australian Government – and the Australian industry – is determined to go further.

Consistent with the Government’s manufacturing policy and ambitions, including our battery strategy, we want more of our own rare earths to be processed here.

We want to capture more of the regional economic benefits of processing here.

We want to develop new capabilities and industries through growing our manufacturing sector here.

And most importantly, we want to help ensure reliable and affordable supplies of these materials to underpin the global net zero transition by diversifying supply chains.

In this regard, I acknowledge the work of Iluka Resources – and CEO Tom O’Leary who will be speaking to you later today – to establish the Eneabba project in Western Australia.

When operational this will be Australia’s first fully integrated rare earth oxide refinery.

This refinery has received approval for a 1.25 billion dollar loan through the Australian Government’s Critical Minerals Facility – administered by Export Finance Australia.

This project will be crucial in diversifying the downstream components of rare earths supply chains.

And it will give Australia a processing base from which to, ideally, further grow our manufacturing sector.

The Government’s contributions are intended to catalyse private sector investment, which continues to step up.

For example in July, alongside US Secretary of Energy Jennifer Granholm, I was pleased to witness the signing of a memorandum of understanding between Australia’s Arafura Resources and major US company General Electric (GE). This was done in the margins of the Sydney Energy Forum.

It was at this forum that I became aware that there is only one rare earths processing facility in the US. I suppose I should have known that before, but, like many, I presumed there would have been more capacity to refine rare earths in the US. This serves to highlight the importance of Australia’s efforts to develop this processing facility to ensure our partners have diverse supply chains. But for me it was a light-bulb moment, where the magnitude of the opportunity available to Australia was made clear. The responsibility is equally enormous.

And project financing for Hastings’ Yangibana rare earths project is underpinned by its binding offtake contract with Thyssenkrupp.

Working with industry and international partners, the Government wants to help create the capability for Australian projects to be involved in more of the downstream processing stages and reap the benefits of contributing more complexity and therefore more value to what we produce.

It is our aim that precursor products will be made here and, eventually, technologies like batteries, solar panels and magnets.

Australia’s critical minerals list names the Government’s priority critical minerals. The list is based on global needs and is designed to reflect evolving technological needs and the international economy.

I can confirm I have asked my Department to review the list to ensure it is fit for purpose and is reflective of the Government’s strategic objectives.

We need to ensure we are doing all we can to ensure we have the right minerals on the list to suit our future needs and the needs of our strategic partners.

Last month the Prime Minister and I announced that the Government will be refreshing Australia’s Critical Minerals Strategy. The new Strategy will be developed in consultation with industry and other stakeholders to best identify how we can help grow the sector.

In the October Budget we allocated $50 million over three years to the Critical Minerals Development Program for competitive grants to support early and mid-stage critical minerals projects. This funding builds on the $50 million recently committed to six key projects across Australia as part of Tranche 1 of the program, leveraging over $143 million in private sector co-investment.

We are also investing $50.5 million over four years for an Australian Critical Minerals R&D Hub to help unlock our nation’s critical minerals potential.

Our resources of natural gas will be important in processing these critical minerals.

In talks in Perth two weeks ago, Japanese Prime Minister Fumio Kishida and Prime Minster Anthony Albanese signed a landmark security cooperation agreement.

But perhaps just as important was the agreement signed at the same Perth summit by myself and Hirohide Hirai, Japan’s Vice Minister for International Affairs, Ministry of Economy, Trade and Industry on critical minerals.

The partnership will establish a framework for building secure critical mineral supply chains between Australia and Japan.

A secure supply chain of critical minerals between our two countries will be just as vital to our shared regional security as our supply of gas and coal to Japan.

We are also working closely with all key international trading partners to link Australian critical minerals supply with international demand.

We are working with the United States, the United Kingdom, the European Union, the Republic of Korea, India and many others.

We want to increase domestic and foreign investment in Australia’s critical minerals sector, foster commercial offtake agreements and get local projects off the ground.

And we aim to establish the diverse sources of supply required to provide geopolitical stability to like-minded countries.

Australia also continues to advocate for open, rules-based trade, which supports vertically-integrated projects across multiple jurisdictions, like Lynas’ operations.

This work will also link to the Government’s broader objectives to develop new clean energy industries and position Australia as a supplier of clean energy products that will help other countries reduce their carbon emissions.

This will be among the most valuable contributions we can make in the transition to net zero. But we need to be equally cognisant of the role Australia’s critical minerals will play in the security of our trusted regional friends and allies.

The Government is rolling up its sleeves and is ready to do the work to achieve its objectives.

Working together with industry, local communities and overseas partners, we can have a global impact on rare earths supply chains.

Thank you.