Australian Companies Mark Rare Earth Production Milestone
Experts have described the first rare earth production by Australian companies outside of China as a significant advancement. This move diversifies the supply chains that Beijing currently controls. Yet, a recent announcement from Lynas Rare Earths indicates that further efforts are needed to enhance the supply of essential components for electric vehicles and renewable energy technologies.
Understanding Rare Earth Elements
Rare Earth elements (REEs) consist of 17 metals that are integral to a variety of products, from everyday items like light bulbs to advanced technologies such as guided missiles. Neodymium and dysprosium are particularly important, especially in creating powerful magnets used in electric vehicle batteries and wind turbines.
Despite the term “rare,” these elements are relatively common in the Earth’s crust, though it’s indeed challenging to find them in their pure form. Among the various categories of REEs, heavy rare earths are sought after for their high atomic mass and value.
Currently, China maintains a tight grip on the entire rare earth supply chain, accounting for over 60% of mining operations and an astounding 92% of global refined production, according to the International Energy Agency.
Lynas’s Recent Achievement
Lynas has announced that it is now producing oxidants at its facility in Malaysia, making it the only commercial producer of heavy rare earths processed outside of China. The company hopes to improve its production of another heavy rare earth, terbium, next month; this substance is useful in bulbs and permanent magnets.
Neha Mukherjee, a senior analyst at Benchmark Mineral Intelligence, noted that this comes at a critical time, especially as China’s REE supply is entangled in ongoing trade disputes with the U.S. The duration of a recent 90-day ceasefire raises questions about whether or not China will ease its restrictions on exporting certain rare earths.
Experts caution that a backlog of permit approvals could complicate transactions going forward. Mukherjee remarked that while Lynas’s developments are meaningful, there is still a need for broader global diversification in the sector.
The Significance of Lynas’s Progress
Lynas has been somewhat vague about its production levels amid warnings from rare earth specialist John Haikawy regarding limitations faced by the company. Haikawy, the president of Stormclaw Capital, remarked that the amount produced isn’t particularly substantial since the ore contains a limited quantity of heavy rare earths. While Lynas can produce terbium and dysprosium, it’s not enough to meet demands without more resources.
The richest sources of dysprosium are predominantly located in southern China, though there are known deposits in Africa and South America. Gavin Wendt, founder of Minelife, emphasized that, despite Lynas’s efforts, China continues to dominate the market. However, he acknowledged that this was a starting point and hoped that other potential projects in regions like the U.S., Canada, and Europe could gain traction.
Challenges in Diversifying Supply
The current landscape of China’s dominance is partly attributed to longstanding industrial policies. There are only a few places, such as Estonia, that refine light rare earths. Additionally, there is hesitation regarding in-situ mining, a technique that is tricky to implement in countries with lower price points and stricter environmental standards.
This creates a significant barrier as producing rare earths can be costlier, leading to higher prices necessary for viable profits. Mukherjee pointed out that the market conditions have not favored new project development recently, meaning many non-Chinese projects may struggle to break even.
Technical challenges also abound in the treatment of rare earths, which requires specialized and efficient methods and can produce substantial waste that is hard to manage.
Future Prospects
Lynas is working on expanding its processing capabilities in Malaysia, potentially allowing for the production of up to 1,500 tonnes of heavy rare earths. If focused on dysprosium and terbium, the company may capture a significant portion of the global market, Mukherjee noted.
Plans are also underway for a new processing facility in Texas, although rising costs have cast some uncertainty on its feasibility. US MP Materials has completed preliminary testing for heavy rare earth separations and aims to ramp up production this year. Meanwhile, Aclara Resources in Canada is developing similar plants in the U.S.
The current ambiguity around China’s export policies could lead to a rise in prices, potentially benefiting smaller producers. Mukherjee suggested that Lynas’s announcement indicates that progress is achievable, given the right mix of technical readiness, demand, and geopolitical factors.
