Australia set to take China on, in the Rare Earth mineral sector, Chinese exports in that sector decline by 18%

Canberra/Washington: There seems to be a new turn in the China-Australia relations, which are already strained, over the last few years. Australia talking tough regarding the issues of the South China Sea and Chinese interference in other countries has prepared to challenge the Chinese domination in the Rare Earth Minerals sector. Talks have already been completed with the United States, Japan and South Korea and moves to increase production and processing have already started.

Last month, a special meeting was organised, against the backdrop of the UN general assembly meeting, held in the United States. Nine countries including Australia consented to participate, in the ‘Rate Earth Initiative’ proposed, by US Secretary of State, Mike Pompeo. As per the information given by Pompeo, Australia, Brazil, Botswana, Peru, Argentina, DR Congo, Namibia, Philippines and Zambia have agreed to join the US venture.

Against the background of this consent, the Australian initiative is noteworthy. Australian Resources Minister, Matt Canavan, gave information regarding the Australian efforts, in the Rare Earth Minerals sector. At this time, he issued a clear warning that the monopoly in this sector needs to be dismantled, without naming China.

Canavan pointed to the Chinese domination in the sector saying that the supply of Rare Earth Minerals should not remain concentrated in one place and there is a need for international cooperation, and there is a perfect opportunity, as of today. The market of these minerals being concentrated only in one region is dangerous from the security point of view. Supply of sensitive Rare Earth Minerals should be appropriate and at reasonable prices.

Australia has opened a fresh dialogue with the United States, to challenge Chinese dominance, in the Rare Earth Minerals. The Australian Minister informed that talks on similar lines have been completed with Japan and South Korea. It has also been exposed that Australian company Lynas, the largest supplier of Rare Earth Minerals, outside China, held discussions with the US defence department, in August. The company has started preparations to start a factory for Rare Earth Minerals, in the US State of Texas.

US President Trump has highlighted the Rare Earth Minerals issue and has adopted a clear policy that there will be no compromise, against the background of national security. Preparations are also underway to provide additional facilities to the company, currently operational in the United States. Last year, the US agencies also visited the Australian Rare Earth mines and projects.

China is known as the largest producer of the minerals going into the manufacture of smartphones, computers and electric cars. It is claimed that more than 30% deposits of the 17 ores, known as the Rare Earth Minerals, are with China. China has a 95% share, in the total Rare Earth Minerals produced in the world. Whereas, 80% of the Rare Earth Minerals required by the United States, are imported from China.

But against the background of the trade war started by the United States, the Rare Earth Mineral imports also have declined. China exported a total of 3,751 tonnes of Rare Earth Minerals in September, and this is a decline of a whopping 17.9%, as compared to August. China had threatened to use the ‘Rare Earth Minerals’, as an aggressive option in the trade war. This decline becomes significant, given the threat.