Regulation

Rare-Earth Metals Market Dynamics

Australia is positioning itself to address the global demand for rare-earth metals, which are essential for the defense industry and AI-related manufacturing, including semiconductors.

China’s Export Restrictions

China recently imposed stricter export controls on 12 of the 17 rare-earth metals. These controls affect 70% of the global supply, which is mined in China, and 90% of the processing that occurs there. The restrictions are part of strategic trade discussions with the United States.

Australia’s Potential Role

Australia’s Treasurer, Jim Chalmers, announced that Australia is well-positioned to supply rare earths to meet global demand, particularly for the US market. Australia aims to become a reliable supplier by engaging with international partners.

Industry Developments

On October 8, US company Noveon Magnetics partnered with Lynas Rare Earths, Australia’s largest rare earths producer, to supply magnets to US defense firms. This agreement propelled Lynas’s share price to a 14-year high.

US-China Trade Tensions

The US government has responded to China’s export restrictions with a proposed 100% tariff on Chinese goods, effective November 1, citing national security concerns over supply chain vulnerabilities.

US-Australian Relations

The US and Australia established a “Critical Minerals Taskforce” to strengthen economic ties. Despite recent tensions over tariffs, both countries continue to collaborate on security and mineral supply chain initiatives.

Global Strategic Partnerships

President Trump has pursued critical-minerals agreements with several countries, including Ukraine, the Democratic Republic of the Congo, and Pakistan, to reduce US reliance on China for rare-earth supplies.