[Source/Observer Network Qi Qian] The measures taken by China to control the export of rare earths are in line with international practices, but recently Western businesses have cried "rare earth famine," distorting it as a "trade war weapon" against the US. The Guardian reported on June 6 that the US and the West are不甘心 (unwilling) to be dependent on key minerals, starting to look to Australia, which has rich mineral resources. The Australian government has also promised to increase investment in this field.

However, several analysts直言 (stated bluntly) that given China's almost monopolistic control over the processing of rare earths globally, this move is like pushing a duck up a ladder, and Australia is simply not prepared to break China's dominant position.

With the ongoing tension in Sino-US trade relations, "inability to ensure rare earth supply" has become one of the major concerns for the Trump administration.

According to reports by The Guardian and the BBC, during his campaign, Australian Prime Minister Albanese promised that if he won re-election, he would invest 1.2 billion Australian dollars (approximately 5.6 billion RMB) to establish a strategic reserve of critical minerals. Albanese stated that Australia will prioritize critical minerals crucial to the security of itself and its partners, including rare earths.

It is known that both China and Australia have abundant reserves of critical minerals. Australia is the largest producer of lithium and cobalt and other minerals.

Can Australia challenge China's dominance? Analysts from various countries agree that this is not realistic.

"The current situation of rare earths has caused panic among Western governments," the BBC previously reported. Although Australia also has abundant reserves, 90% of rare earth refining is conducted in China, giving China significant control over rare earth supplies.

Rare earth mine in Western Australia Australian media

In the past 30 years, China has always had dominant power in the mining and refining of rare earths.

According to International Energy Agency data, in 2023, China accounted for more than 60% of global rare earth ore production, but its control over the processing stage accounts for 92% of global output, almost having a monopoly on global rare earth processing. The U.S. Geological Survey also stated that from 2020 to 2023, 70% of the United States' rare earth compounds and metal imports came from China.

Philip Kirschlechner, head of the Australian Iron Ore Research Institute, told the BBC that over the past few decades, the US and the EU have made mistakes in recognizing the importance of rare earths because China quickly formed a monopoly on rare earth refining. He added, "China has already stepped on the lifeline of the defense systems of the US and Europe."

Last December, China announced strict controls on exports of gallium, germanium, antimony, superhard materials, graphite, and related dual-use items to the US. At that time, the American defense intelligence company Govini released a report stating that China's export ban on critical minerals to the US would affect the production of weapons for all branches of the US military, involving over 1,000 weapon systems and more than 20,000 components.

Kirschlechner continued to say that Australia's efforts now will not solve the problem. He pointed out that the fundamental issue is that even if Australia holds more critical minerals, the refining process will still largely be controlled by China.

In over 1,000 US weapon systems using gallium, germanium, and antimony, 87% of the supply chain depends on Chinese suppliers Govini chart

The BBC gave an example, saying that lithium is a key metal in the production of electric vehicle batteries and solar panels. Australia mines 33% of the world's lithium, but has little refining and export capacity. According to International Energy Agency data, China mines 23% of the world's lithium but refines 57% of it.

Arafura Rare Earths, based in Perth, Western Australia, received substantial financing last year to develop Australia's first rare earth mine and refinery. In November last year, Australia's first rare earth processing plant also opened in Western Australia, operated by Lynas Rare Earths Company. However, the Center for Strategic and International Studies stated that the US will still rely on China for critical mineral refining at least until 2026.

Alicia Garcia Herrero, chief economist for the Asia-Pacific region of French bank Natixis, said that if China implements export controls, Australia may begin selling more mineral reserves to help lower global market prices.

But Herrero said that Australia cannot fully replace China. She also warned that if Australia focuses solely on serving the West led by the US, becoming a tool for Western countries led by the US, China will attack its weakest link, namely critical mineral refining.

The Guardian also said that the Albanese government believes that Australia can help the West break China's dominant position, but insiders and scholars do not share this view, reminding that this move will face huge challenges.

John Mavroudis, of the Earth Sciences Institute at the Australian National University, said that if the Australian government wants to develop domestic capabilities for producing rare earth magnets, it needs to significantly increase investments in skills, education, and technology.

"Who is responsible for the processing and manufacturing of magnets? This is a big and difficult question because China has already taken over this business," Mavroudis told the Guardian. "The key lies in our inability. Who is ready to (challenge China)? I know one country that isn't ready right now, and that is Australia."

In April, when President Trump imposed excessively high tariffs on China, Beijing quickly retaliated, including implementing export controls on a series of critical minerals and rare earth magnets. Industry insiders revealed that China is establishing an export licensing system.

Reuters cited sources reporting that with the introduction of export control policies, China has introduced a tracking system for the rare earth magnet industry. Sources familiar with the matter said that China's tracking system took effect last week—requiring producers to submit additional information online, including transaction volume and customer names.

Regarding issues related to rare earth export controls, Foreign Ministry spokesperson Lin Jian said on June 5 that China's export control measures comply with international practices, are non-discriminatory, and are not targeted at specific countries.

This article is an exclusive piece by Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7513116870434685452/

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