Western allies need to break China’s critical minerals monopoly

The roundtable is designed to highlight deepening co-operation between Australia and the US over critical minerals and boost the chances of Australian companies participating in initiatives flowing from the US Inflation Reduction Act.

“We agree fully that there is a win-win situation here for our countries, for our mutual national security and for the corporate sector of both of our countries,” Ms Raimondo said.

‘China has a head start’

China announced last Friday it would restrict exports of graphite, used in batteries, citing national security grounds. The move is regarded by some observers as a tit-for-tat action after the US earlier announced restrictions on the types of semiconductors that can be imported by China.

Ms Raimondo admitted “China has a head start” in critical minerals. “And that means we have to work a little harder and a little faster,” she said.

“They have the technology and sustained investment over a long period of time, particularly in midstream processing and refining to dominate the market for critical minerals.

“And we all know if China were to point that new direction unfavourable to us, it can cause a great deal of pain very quickly. And so, we have a job to make sure that doesn’t happen by drawing closer to one another and becoming less vulnerable.

“I’d say most troublingly they’ve shown a willingness to employ export restrictions on critical minerals as a retaliatory measure. We’ve seen what’s happening with germanium and gallium and, most recently, graphite.”

Ms Raimondo’s strong comments on China come ahead of Mr Albanese’s visit to Beijing and Shanghai next week.

The roundtable was attended by miners, processors and purchasers of critical minerals, including Lynas chief Amanda Lacaze and Iluka’s chief Tom O’Leary, as well as ACTU president Michele O’Neil and AFL-CIO president Liz Shuler, representing the Australian and American union movements.

‘Massive profits to be made’

Mr Albanese and Resources Minister Madeleine King announced ahead of the roundtable that Australia would double to $4 billion the Critical Minerals Facility, which makes cheap loans and guarantees available to miners that need government support to get their projects off the ground.

However, with some industry players believing tax credits and grants would be more helpful, Mr Albanese indicated further support remained an option, identifying processing as a priority.

“There are massive profits to be made. And yes, every single company will always … prefer a grant to a loan,” Mr Albanese said. “We know that that’s the case. But what we are doing here is providing what is needed.

“But we’ll continue to do what is necessary to not just look at providing support for extraction, if you like, of our resource, but value-adding as well. That’s the big next step that we need to do. Because that’s where the jobs really come from. And I want to see us move up that value chain.”