【Text by Observer Net, Xiong Chaoran】On October 16 local time, Australian Treasurer Jim Chalmers held talks with Kevin Hassett, Director of the White House National Economic Council.
Before the meeting, Chalmers told reporters in Washington: "Australia has the capability to meet the demand for rare earths. We will work with our partners to ensure that we can become a very reliable supplier, meeting the demand for critical minerals in Australia, the United States, and other global markets."
Bloomberg reported on the same day that Chalmers' remarks were intended to emphasize that Australia is capable of becoming a key component in the U.S. push to diversify rare earth supply chains and reduce dependence on China. The report stated that rare earths are crucial for various fields such as semiconductors and military technology. Australia has the world's fourth-largest rare earth deposit and a long history of mining, which strengthens its position as a viable alternative to Chinese rare earth supply.
Previously, Lynas Rare Earth, a company based in Perth, Australia, had begun refining so-called "heavy rare earths" at its factory in Malaysia, which has become the only heavy rare earth production base outside of China.
Photo: Previously, Australian Treasurer Chalmers met with U.S. Treasury Secretary Becerra and White House National Economic Council Director Hassett. Australian Broadcasting Corporation
On October 17 local time, The Australian newspaper cited unnamed industry sources saying that the Trump administration is considering acquiring partial equity in Australian rare earth projects. The report said that the equity investment could come from various U.S. government agencies, including the Pentagon and the U.S. Export-Import Bank.
Over the past few months, the U.S. government has started similar equity acquisitions for major participants in the industry, including shares in rare earth producer MP Materials and Lithium Americas. According to reports, these measures are part of a broader supply chain strategy the U.S. has developed to compete with China.
According to informed sources, last month, more than a dozen Australian mining companies met with officials from multiple U.S. government agencies in Washington and were told that the U.S. is seeking to invest in related companies through similar equity acquisition methods.
This news led to a significant increase in stock prices of Australian critical mineral project companies, including Nova Minerals and Resolution Minerals. These two companies said they will brief the Australian government before Prime Minister Albanese meets with President Trump next week.
Chalmers said that people are still concerned about the reliability and stability of the critical mineral market.
"There's no doubt that this will be part of the discussion between Prime Minister Albanese and President Trump next week," Chalmers said: "This will be an important topic of my meeting with Kevin Hassett tonight."
In fact, this is not the first time Australia has shown its "allegiance to the U.S." regarding rare earth issues.
According to Nikkei Asia, on August 20 this year, former Prime Minister of Australia, currently the Australian Ambassador to the United States, Kevin Rudd participated in an event hosted by the Center for Strategic and International Studies (CSIS) in the U.S., where he stated that advanced military equipment such as submarines and stealth fighters rely heavily on rare earth elements and claimed that Australia and the U.S. are committed to reducing their reliance on China's critical minerals.
"Whether we like it or not, the reality is that our most critical actions in the military field depend on the availability of critical minerals and rare earth supplies," he then "volunteered" to claim: "As an ally of the U.S., Australia is ready to help, and we have the capability to do so."
Rudd also insisted that Australia has the ability to assist the U.S. in achieving supply chain diversification. "The geological conditions allow many countries to benefit, whether it's Australia, the U.S., or Canada. Given that we have advanced mining companies, a deep capital market, and the determination of the governments in Washington and Canberra to turn things around, I believe we can achieve a high level of resilience in critical mineral resources."
On October 9, the Chinese Ministry of Commerce issued two announcements regarding the strengthening of export controls on rare earth-related items. On the same day, China also announced several other announcements, not only adding several new rare earth elements and dozens of rare earth processing equipment to the export control list, but also involving superhard materials, lithium batteries, and artificial graphite anode materials.
That day, the Wall Street Journal published an article stating that the latest Chinese measures on rare earths are considered to be almost unprecedented (a nearly unprecedented) export controls. The Financial Times, on the other hand, stated that China's export controls have increased concerns in the U.S. and Europe about their continued access to these rare earth metals.
"The Pentagon is seeking to purchase up to $1 billion worth of critical minerals as part of its global reserve operations to counter China's dominance in the defense manufacturer's key (rare earth) metal sector."
The Financial Times reported on October 12 local time that the U.S. Department of Defense's Defense Logistics Agency (DLA) disclosed the Trump administration's plan to accelerate the expansion of national reserves in recent months. Previously, China imposed export restrictions on various rare earth materials, and in the supply chain for key minerals and permanent magnets required for various technological equipment from smartphones to fighter jets, China holds a dominant position.
A former U.S. defense official said, "They (the Pentagon) place great importance on reserves. They definitely want more, and they are expanding in a planned and broad manner, looking for new sources of different minerals needed for defense products." Another former U.S. defense official claimed that this $1 billion plan represents a significant acceleration compared to previous reserve efforts.
On October 15, Chinese Foreign Ministry spokesperson Lin Jian presided over a regular press conference, once again responding to the rare earth control measures.
Lin Jian stated that the relevant Chinese authorities have clarified their position on the export control policy for rare earths. China legally implements export controls on relevant items to better maintain world peace and regional stability, fulfill international obligations such as non-proliferation, and this is in line with international practice. We are willing to strengthen dialogue and exchange on export controls with all countries, and maintain the security and stability of the global supply and value chains.
China's position has been consistent and clear. It is the U.S. that is talking one moment and threatening and imposing high tariffs, and introducing new restrictive measures the next. This is not the right way to deal with China. We urge the U.S. to quickly correct its wrong practices and resolve the issues through dialogue and consultation on the basis of equality, respect, and mutual benefit.
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