Australia must be realistic about where it can compete in critical minerals and batteries, and shying away from collaboration with the Chinese across investment and technology is "a mistake", according to panellists at a recent Argus forum in Perth, Australia.
Australia has been pulled into a strategic competition between the US and China to its disadvantage, chief executive of Australia's Association of Mining and Exploration Companies, Warren Pearce, said during a panel discussion at the forum earlier in the week.
Australia should have been able to play the US and China off against each other to gain investment, but instead explorers are being pressured to align with the US from the get-go, taking Chinese investment and early-stage opportunities off the table, Pearce said.
"What is in the US interest is not necessarily in our interest," Pearce said, adding that there is room for Australia to co-operate with China to bring technology and build capability in the former given that not all critical minerals are crucial to defence applications and national security.
China first added gallium and germanium products to its list of export-controlled dual-use items in August 2023 and subsequently added more products, including some rare earths products and other critical minerals, to the export-controlled dual-use list in the following years.
China introduced even tighter measures for exports of some products to the US and Japan this year. It imposed export controls on heavy rare earths and dual-use technologies to Japan in January, and tightened existing controls on a wide range of dual-use critical minerals to the US in July. Dual-use products are goods and technologies that can be used for civilian and military purposes.
Some of the Australia's decisions could close the door on Chinese Investment, Pearce said, citing recent decisions by the country's Foreign Investment Review Board (FIRB).
Australia's Foreign Investment Review Board (FIRB) ordered China-linked investors to divest from Northern Minerals' Browns Range heavy rare earth project in 2024.
The board issued further sell-off orders in May. But three investors have repeatedly failed to comply with the orders. The firm previously targeted an FID for its Browns Range mine in Western Australia by 30 June. It currently aims to reach FID in the July-September quarter.
Australian producers also need to think through their position on developing intermediate and downstream products, according to Australian Strategic Materials (ASM) chief financial officer Stephen Motteram, as they might be better off sitting closer to final end-users.
ASM is developing the Dubbo rare earth project in New South Wales, and manufactures rare earth alloys and metals at its Korean Metals Plant in Ochang, South Korea, where some of the end-users are.
US uranium producer Energy Fuels is aiming to set up the first part of a mine-to-magnet supply chain outside of China. Energy Fuels bought ASM in mid-August
ASM also originally planned to produce separated rare earth oxides at the Dubbo project, but is now considering producing mixed rare earth hydroxide precipitate and shipping it directly to its parent company's White Mesa Mill in Utah for further processing.
Consumers need to value non-China alternatives for projects to get built in the west and induce a demand for Western supply chains, Motteram said.
China accounted for about 90pc of global rare earth refining in 2025. But that may fall to 70-73pc by 2035 if foreign projects reach production, according to the International Energy Agency's modelling.
Battery industry
Chinese firms also continue to dominate the global battery industry, including the low-cost lithium-iron-phosphate battery chemistry.
But competing with China's battery chemistry forte that it has worked on over the last decade is "never going to win", said Ron Mitchell the chief executive officer of Australian manganese firm Firebird Metals. "The only way to do it is to look at the next generation [batteries]," he said, adding that being smarter around production pathway can be an advantage to offset higher production costs.
Firebird owns the Oakover manganese project in Australia. It also built a demonstration-scale plant in Perth to produce cathode active material (CAM) via an end-to-end process — from manganese ore conversion into high-purity manganese sulphate monohydrate all the way to CAM. The plant is expected to commission in October-December, the firm said.
Argus Consulting expects high-manganese battery chemistries' market share to grow from 2pc in 2025 to 14pc in 2036, with automakers such as General Motors looking at commercialising lithium-manganese-rich batteries.
