Rare earths miners see opportunity in US trade war

Perth Now

4 days ago

Trade tensions between the US and China are playing into the hands of Australian rare earths miners.
The weapons and electronics ingredients with hard-to-pronounce names such as praseodymium and neodymium have become the centre of a geopolitical tussle between the two largest world powers.
For aspiring vertically-integrated rare earths producer Australian Strategic Minerals, that presents an attractive opportunity.
The ASX-listed firm is busy working on getting its construction-ready Dubbo mine online, but has already been inundated with orders for its South Korea processing plant.
It all kicked off when China retaliated to US tariffs by cutting off its near-total supply of rare earth minerals.
That sent a wake-up call to American policymakers who realised they needed to take control of their supply chains, ASM chief executive Rowena Smith said on Monday.
"The Korean metals plant, particularly in recent months since those restrictions that we saw imposed by China, has had a huge influx of inquiry. So we're busy ramping up our facility there," she told the Diggers and Dealers mining forum in Kalgoorlie.
The plant, located 115kms south of Seoul, is one of a few facilities outside of China capable of refining rare earths into the high-tech metals and alloys that are then turned into magnets essential for making electronic devices.
In July, the US Department of Defence invested $US400 million in rare earths miner MP Materials, including a generous guaranteed price floor of $US110 per kilogram for neodymium and praseodymium.
The decision put a rocket under rare earth prices and put the market on notice that the US government was looking to do business.
"At the moment, we've been talking to the DoD about funding support" for a US-based facility, Ms Smith said.
"What we're seeing in the US is that the policy is extremely supportive of putting this facility into that jurisdiction.
"And we are seeing that, not just at the Trump administration - the federal - but actually at the state level, very strong competition to having this facility put into their own jurisdiction."
Another Australian company that has benefited from the Americans' determination to achieve supply chain independence is Lynas, the biggest producer of rare earths outside of China.
The Perth-based company has been awarded funds by the DoD to construct a processing facility in Texas, which will add to its current facilities in Malaysia and Kalgoorlie.
More details about the project are likely to be revealed on Tuesday morning, when Lynas general manager development Alex Logan takes to the Diggers and Dealers stage.