06-05-2025
Australian miners see opportunities during US and China trade war chaos
Australian mining companies are walking a tightrope between China, the nation's biggest market for our resources, and the United States, our greatest ally.
The trade war between them could open up some big opportunities but there is also a risk that Australian companies could get caught in the crossfire.
China has banned exports of some rare earths and critical minerals to the US, a move that threatens high-tech industries there.
In August, the Chinese government embargoed the supply of gallium to the US.
Gallium is a key component in thermometers, semiconductors, LED screens, smartphones, and Blu-ray technology.
They also banned germanium, which is used in space tech, renewables and telecommunications; antimony used in bullets and other weapons; and graphite used in electric vehicle batteries.
US Critical Minerals executive director Harvey Kaye said the embargo has become a geopolitical issue.
"They are now overtly utilising the withdrawal of those critical elements that affect our defence, our chip manufacturing, satellites, and artificial intelligence,"
Mr Kaye said.
Harvey Kaye says the company is one of many on Donald Trump's list for fast-tracked development.
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Supplied: US Critical Minerals
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US on fast track
In response, US President Donald Trump has issued a raft of executive orders to cut red tape, speed up mining approvals, and wants to fund projects by creating a new sovereign wealth fund.
US Critical Minerals is one of those companies listed for fast-tracking, according to Mr Kaye.
"We have ability through small mining exemptions, categoric exemptions, and the Defence Production Act to fast-track something that would have taken a few years [to get approval] down to 12-14 months," Mr Kaye said.
He thinks US government money could flow into processing projects in Australia.
"We're in direct conversation as we speak with the [Export-Import] bank … to encourage trade both ways," he said.
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We have identified Australia as our prime candidate to foster business relationships with.
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Glencore's Murrin Murrin mine in WA accounts for about 5 per cent of global cobalt production.
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Supplied: Glencore
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Australian miners vulnerable
Mining generates more than $450 billion in export revenue for Australia, with most of that from iron ore and coal, according to the Minerals Council of Australia.
Critical mineral exports are estimated to be worth just $7.6 billion this financial year according to the March Resources and Energy Quarterly Report from the Department of Industry Science and Resources but that could still increase significantly according to Professor Vlado Vivoda, the director of the Strategic Minerals Advisory and Research consultancy and a professor at the University of Queensland.
"Our reserves of lithium, nickel, cobalt are number two in the world, the same for copper, we're fourth for rare earths,"
he said.
Vlado Vivoda thinks Australia can ramp up production of critical minerals and rare earths.
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Supplied: University of Queensland
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Australia is also the number one processor of lithium globally, although the price has fallen to its lowest level in four years.
Professor Vivoda said China has used its market dominance as a processor of critical minerals and rare earths to kill off competition from other countries, which is exactly what it did recently to Australia's nickel and lithium industries.
"They flooded the market with cheap Indonesian nickel, that's produced under not best practice … and a lot of our producers in Western Australia had to put mines into care and maintenance," he said.
He said the sector needs protection.
"This is not a free market globally so there is some necessity for strategic intervention to safeguard some of these mines that are deemed strategic or critical,"
Professor Vivoda said.
Australia has some of the richest critical mineral deposits in the world.
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Supplied: Geoscience Australia
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He said the relationship with China has a chequered past.
"China has been the backbone of the Australian economy for a lot of lot of years, but … there have been certain frictions in that relationship," he said.
China banned key Australian commodities during the previous Liberal government including coal, barley, seafood, wine and beef.
All of those bans have since been lifted with China recently granting 10 new red meat companies access to the Chinese market and approving new protocols to allow Australian apples to go to China in increasing volumes.
Government policies
Critical minerals are a priority for the re-elected Labor party, which has provided tax breaks for miners and promised to set up a federal
Photo shows
A person holds a handfull of ground nickel
Australia is joining the European Union and the United States in establishing strategic reserves of critical minerals, but what do they actually do, and why are they so important?
It would offer voluntary agreements to miners to buy some of their output, and create a national stockpile of the minerals, effectively underwriting mines by guaranteeing some demand.
Professor Vivoda thinks that's a good idea.
"That would be a way to protect our producers,"
he said.
The Minerals Council of Australia is less sure.
The council's northern Australia executive director Cathryn Tilmouth said the policy could impact the commercial viability of Australian operations.
She said miners would need support to deliver those minerals to a reserve.
"To ensure they were able to afford energy, that they had appropriate IR (industrial relations), legislation, that they were able to get through the approvals processes, that they weren't facing the removal of fuel tax credits," she said.
Lynas Corporation runs the Mt Weld mine near Laverton in WA.
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Supplied: Lynas Corporation
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Walking the tightrope
RST Solutions is one of those Australian companies walking the tightrope between China and the US.
They are working on mining projects all over the world, including China, and are expanding into the US through a partnership there.
They have provided environmental services to the big Stargate nickel processing plant set up by the Chinese in Indonesia to produce ferronickel and new energy nickel battery materials.
Operations manager David Handel said they were helping to clean up the mine site.
"Sediment is getting washed off the mines into the waterways, so we're trying to stop it at the source," he said.
RST Solutions is working with Chinese and Indonesian companies on environmental management at the Stargate Nickel mine in Indonesia.
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Supplied: RST Solutions
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He said Australian companies have a lot to offer in terms of expertise in mining sustainably, but he doesn't think it will be easy for other countries to combat China's dominance of the sector.
"You'll never get the economic advantage that everyone's had out of China for years and years,"
Mr Handel said.
And he's not concerned about the trade war and US tariffs because the Australian dollar is low, making his company's products and services relatively cheap in that country.
"Our Aussie dollar is so low, we're so attractive still, so these guys aren't even blinking when we're talking tariffs, it's not even coming up in conversation," Mr Handel said.
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