Australia Could Play Bigger Role In Supplying U.S. Military With Rare Earth Minerals

WASHINGTON – With trade tensions between U.S. and China still on a high boil, Australia stands poised to become the Defense Department’s primary supplier of Rare Earth metals, a department official said Monday.

Rare Earth metals are a collection of 17 minerals used in everything from magnets and batteries to cell phones and fighter jets, and satellites to high-tech guidance systems.

Currently, nearly all of the world’s supply — roughly 85% — is produced by state owned enterprises in China, which has threatened to withhold them.

As a result, “we’ve been focused on Rare Earths for quite some time,” said Ellen M. Lord, the Undersecretary of Defense for Acquisition and Sustainment, during a briefing with reporters on Monday.

“We’re concerned about any fragility in the supply chain, and especially where an adversary controls the supply,” she said.

The only other significant source of Rare Earth metals is mined in Western Australia, located about 620 miles northeast of Perth, which produces about 15 percent of the global supply.

Lord said when it comes to Rare Earth metals, “the challenge is really the processing of them and having facilities to do that.”

And while China does indeed have significant mines within its borders, the reality is its great strength in the market is based on its mining Rare Earth metals elsewhere and bringing them back to China for processing.

“So we are looking at a variety of mechanisms to stand up processing facilities,” Lord said. “And one of the highest potential avenues, I think, is to work with Australia.”

In fact, mining industry analysts have long said that if Australia could grow its production of Rare Earth metals, it could attract significant investment from the U.S. and others looking for a safe and secure supplier.

Lord said she visited Australia this summer and had extensive discussions about whether or not the U.S. and Australia could work together on a Rare Earth metals processing facility “that would not only take care of our DoD needs, but a variety of other international needs as well.”

Australia’s Northern Minerals opened a pilot processing plan last year and began shipments from it in September 2018.

It hopes to someday be a significant global supplier of dysprosium, which is used by electric vehicle makers in the manufacturing of industrial magnets that are used in electric engines., and can also be found in wind turbines and other large industrial engines.

The research and development phase for the pilot plant began in June 2018 and is expected to take up to three years.

Lord didn’t say whether she actually visited the plant while in Australia, telling reporters only “a variety of avenues were pursued.”