News
26/08/21
Australia must stay realistic in metals race: Panel
Singapore, 21 August (Argus) — 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 . By Daniel Gage-Brown and
Joseph Ho Send comments and request more information at feedback@argusmedia.com
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