Australia Must Choose Defense or Social Spending, Rabobank Says
For now, the government is opting for 'butter,' but it retains substantial fiscal headroom to bolster military spending when compared to peer economies, Rabobank economist Benjamin Picton said in a research note on Tuesday. The nation's debt is lower than that of counterparts as a share of its gross domestic product.
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Yahoo
21 minutes ago
- Yahoo
The West Looks to Break China's Grip on Critical Minerals
Western governments have recognized the need to intervene and safeguard their existing critical minerals supply chain from extinction in a market heavily dominated by China. Even more efforts will be needed in the West to establish new manufacturing capacities and ensure that production is at prices higher than those in China. The U.S., Australia, and the EU have made the first steps to ensuring non-Chinese supply of critical minerals and rare earths—from bailouts in Australia to a direct government investment in companies in the U.S. But the West will need much more, in terms of support and investment, to tackle China's dominance. Beijing holds a dominant global position in the supply of critical minerals and rare earths, but its grip on the value chain – minerals processing and magnet production – is even tighter. The U.S., the EU, and Australia will require significant investment and federal incentives to establish a robust minerals refining supply chain at home or in allied countries, enabling the processing of raw materials and challenging China's dominance. This will likely require billions of dollars and years to build processing capacities that rival China's decades-long strategic positioning in mineral refining, its access to materials in Africa, and its cheaper labor and construction costs. Despite major deals and government support in the West for building domestic supply chains, China has raised its market share over the past few years, the International Energy Agency (IEA) warned in its new annual report, Global Critical Minerals Outlook. China dominates refining for 19 of the 20 minerals the agency has analyzed, holding an average market share of around 70%. 'Three-quarters of these minerals have shown greater price volatility than oil, and half have been more volatile than natural gas,' the IEA said, noting that major risk areas include high supply chain concentration, price volatility, and by-product dependency. China is also using its dominant position to restrict global supply through export controls in an increasingly protectionist and polarized world. And the West is considering ways to counter the Chinese grip on the supply chain that's key to the defense, automotive, and clean energy industries. Australia, for example, last week bailed out two struggling smelters ultimately owned by commodity trading giant Trafigura to help them convert into sites capable of producing critical minerals. Australia is also considering establishing price floors for rare earths to get new projects off the ground, Resources Minister Madeleine King told The Australian last week. 'Mechanisms for an appropriate price floor are under active consideration,' King said. In the U.S., rare earths miner and magnet producer MP Materials Corp announced last month it had entered into a transformational public-private partnership with the Department of Defense (DoD) to accelerate the build-out of an end-to-end U.S. rare earth magnet supply chain and reduce foreign dependency. With a multibillion-dollar package of investments and long-term commitments from DoD, MP Materials will construct its second domestic magnet manufacturing facility, the '10X Facility'. For a period of 10 years following the construction of the 10X Facility, DoD has agreed to ensure that 100% of the magnets produced at the 10X Facility will be purchased by defense and commercial customers with shared upside. DoD will also become MP Materials' biggest shareholder with a 15% stake. International partnerships and collaboration are also part of the arsenal to reduce dependence on China. Australia's Lynas Rare Earths, the world's top producer outside China, last month signed a preliminary agreement to collaborate with South Korean permanent magnet manufacturer JS Link to develop a sustainable rare earth permanent magnet value chain in Malaysia. The companies will work on an NdFeB permanent sintered magnet manufacturing facility near the Lynas Malaysia advanced materials plant in Kuantan. Another Australian firm, Arafura Rare Earths, said this week that Export Finance Australia (EFA) has provided a non-binding conditional Letter of Interest (LOI) relating to potential further investment to support Arafura's Nolans project in the Northern Territory. The German government is also appraising the project for potential support and could get both the Australian and German governments on board. The West is taking the first steps toward breaking free from China, but it will take time and a lot of money, including government funds, to build a true critical minerals supply chain. By Tsvetana Paraskova for More Top Reads From this article on Sign in to access your portfolio
Bloomberg
33 minutes ago
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FTSE 100 Live: UK Economy Grew More Than Expected in the Second Quarter
Real GDP per capita grew by 0.2% in the second quarter, up 0.7% compared with the same quarter a year ago. That's a better start to the year after it fell in the second half of 2024.
Bloomberg
an hour ago
- Bloomberg
Ampol Halted After Report of A$1 Billion Petrol Station Deal
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