Perth: A senior defense official declared on Wednesday that the United States is making strides to establish a domestic rare earths supply chain, aiming to meet defense needs by 2027. This initiative comes amidst efforts to reduce reliance on China, the dominant producer of these critical metals.
“We are on track to meet our goal of a sustainable mine-to-magnet supply chain capable of supporting U.S. defense requirements by 2027,” stated Assistant Secretary of Defense for Industrial Base Policy Laura Taylor-Kale at a mining conference in Perth.
Australia, alongside Canada and the UK, is categorized as a domestic source of supply for critical minerals for the U.S., and funding opportunities are being extended to Australian mine developers. This year, the U.S. has allocated support to two Australian-listed rare earths projects with up to $850 million to bolster the supply chain. Additionally, funding has been provided to Lynas Rare Earths, the world’s largest producer outside of China, for the construction of a new rare earths processing facility in Texas.
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Domestic government support is also evident. Australia’s federal government has pledged a A$1 billion ($667 million) loan to mineral sands producer Iluka Resources to establish a new minerals processing plant on the country’s west coast.
However, these expansion efforts coincide with a slump in rare earths prices due to increased supply from China. Tom O’Leary of Iluka noted that even China’s top three rare earths producers are experiencing financial challenges amidst declining prices. He advocated for Western rare earths prices to decouple from Chinese prices.
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Amanda Lacaze, CEO of Lynas, highlighted the need to address the market imbalance by fostering growth in supply outside of China. She emphasized the significance of partnerships with governments, such as the collaboration with the U.S. and Iluka’s relationship with the Australian government, in achieving this goal.
