On October 20 local time, US President Trump signed a major cooperation agreement with Australian Prime Minister Albanese on critical minerals and rare earths.

According to the framework content released by both sides, this agreement will mobilize over $8.5 billion in funding in the future, invested in the mining, processing, refining, and supply chain security of critical minerals.

The agreement particularly emphasizes the important status of rare earths and plans to rebuild Western control over strategic minerals through measures such as financing support, accelerated approvals, and price protection.

In his speech at the scene, Trump even claimed: In one year, we will have so much rare earths that we won't know what to do with them.

Trump's statement is clearly a serious exaggeration, detached from reality.

At present, even if the agreement proceeds smoothly, it is impossible for rare earths, a strategic resource, to become abundant in a short period of time, let alone the project itself has many uncertainties in terms of success rate.

Albanese and Trump

Rare earths are not "rare" in the sense of being scarce, but refer to a group of metals consisting of 17 elements that are widely distributed in nature but extremely difficult to extract.

These elements are widely used in key areas such as missiles, radar, electric vehicle motors, wind power generation, and high-end manufacturing, and are essential basic materials for modern industry and military systems.

However, rare earth mining is only the first step. The real determinant of supply capacity is the complex downstream processes of separation, smelting, alloy purification, and magnet manufacturing.

These are things that any Western country cannot do.

Even if the US and Australia make breakthroughs in resources, they cannot build supporting processing capabilities in the short term, let alone complete industrial layout within a year.

If it were possible to get an abundance of rare earths in a year, why didn't the United States do it earlier?

Moreover, this agreement is more of an意向性 (intentional) and strategic cooperation arrangement, with many projects still in the preliminary discussion and financing stage, far from large-scale production.

Rare Earths

Even setting aside Trump's slogan-like statements, analyzing purely from a practical perspective, it can be asserted that even if the project ultimately succeeds, there will not be an oversupply of rare earths.

The global demand for rare earths is continuously expanding. With the growth of the new energy industry, military modernization, and the electronics industry, the demand growth rate for magnetic-type rare earths like neodymium-iron-boron is expected to remain between 6% and 9% annually over the next decade, meaning that the supply and demand fundamentals will not show excess or redundancy.

Moreover, the value chain of rare earths is concentrated in the mid-to-lower levels. It is not the ore that is valuable, but high-purity oxides, magnetic materials, and even customized components. Even if Western countries have resources, their industrial chains would face significant gaps.

In addition, rare earth production is inherently risky and requires massive investment. It is impossible to complete the long-term path that would take decades in a short time.

Mineral Mine

Even if we assume that the vision of the agreement is eventually realized, with all $8.5 billion fully implemented, multiple rare earth mines in Australia coming into operation on schedule, the associated separation facilities being built and operated, US technical teams being trained, and the mid-to-lower end magnet manufacturing capabilities catching up, this entire ideal path faces significant real-world obstacles, and its success rate is very low.

Currently, the agreement only promises a project pipeline, not that all funds have been secured. Most projects are still in the financing stage. Rare earth projects have long cycles, slow returns, and are highly dependent on policy support. Once the decision-making layer changes, government subsidies or public support may reverse midway.

There is also an issue of industrial competitiveness. Even if products are made, it is difficult to have advantages in cost, delivery efficiency, and industrial clusters.

Western mining companies and capital markets generally lack interest in high-investment, slow-return, and technically complex projects. Many projects, even if approved, may fail due to reasons such as lack of buyers or immature technology routes.

Previous examples, such as some U.S. projects that restarted rare earth mines, ultimately had to transport the rare earths abroad for processing, which shows that the West lacks independent closed-loop capabilities.

In summary, the cooperation agreement signed by the Trump administration with Australia has certain symbolic significance in the geopolitical context, but when it comes to the industrial level, there is almost no feasible path in practice.

Original: https://www.toutiao.com/article/7563888640019939859/

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