South East rare earth deposit expansion puts SA on track to rival China

A huge expansion of a rare earth deposit could put the state on track for a multi-generational boom with major implications for future technology.

South Australia will challenge China’s stranglehold on the world’s supply of magnets used for the production of electric vehicles and wind turbines after a huge expansion of a rare earth deposit in the state’s south east, sparking the potential for a “multi-generational” economic boom.

Industry experts say the new breakthrough has the potential to establish the state, and the country, as a world leading supplier of rare-earth material used to produce permanent magnets.

China currently supplies the world with 95 per cent of these magnets, which are essential for the motors in EVs and wind turbines.

Last month, Tesla boss Elon Musk announced the company’s next generation of electric vehicles would not use rare-earth material, causing Chinese stocks to tumble.

Also last month, Japan acquired its first interest in rare-earth elements in attempts to reduce reliance on China.

Elon Musk’s Tesla announced its next generation of EVs would not use rare-earth material. Picture: JIM WATSON / AFP

An announcement by ASX-listed company Australian Rare Earths that its ionic clay deposit at Koppamurra near Naracoorte has increased by 25 per cent has been celebrated by the industry as a huge opportunity for Australia to become a major global supplier rivalling China.

The expansion of the site, though still in the exploration phase, will take the deposit to more than 100 million tonnes of clay, rich with 80,000 tonnes of rare-earth oxide.

But the company has a huge exploration target that would grow the deposit to 1.4 billion tonnes of rare-earth mineralised clay.

Australian Rare Earths has so far been granted exploration leases for 4000 square kilometres in SA and Victoria, but Managing Director Rick Pobjoy said most of the resources were within SA.

He said the company was preparing to submit a mining application to the state government.

Mr Pobjoy said China had a “stranglehold” on the world’s rare-earth permanent magnet supply, which places risk on international decarbonisation efforts through the use of EVs and wind turbines.

“We’ve uncovered a very large resource of rare earth mineralised clays, but attached to that we’ve got a greater than one billion-tonne exploration target,” he said.

“The whole region is endowed with rare earths in the clays, and that presents the potential for multi-generational production from this location.”

Generic image of Australian rare-earth material. Picture: Supplied by Australian Rare Earths

What makes the Koppamurra so significant is that the site contains “heavy” rare-earths such as dysprosium and terbium, unlike so many other mines around the world that can only provide “light” rare-earths.

It’s the “heavy” material that is so strategically important, as it is crucial for the current technology in EVs and wind turbines, Mr Pobjoy said.

“It’s going to be so important for global EV manufacturers, whether it’s north Asia or Europe or the US to have access to these critical rare-earths,” he said.
Energy and Mining Minister Tom Koutsantonis said the Koppamurra project “stands to significantly advance SA’s position as a global leader for critical minerals exports”.

“South Australia is already a trailblazer in critical mineral exports from the world’s largest zircon mine, Jacinth-Ambrosia,” he said.

“Work is also underway towards a comprehensive state Critical Minerals Plan, which the State Government plans to release this year.”

SA Chamber of Mines and Energy chief executive Rebecca Knol said as global demand for clean energy increases, so too would the demand for rare-earths.

“Exploration is critical to ensuring a future pipeline of resource projects in South Australia and is key to increasing the resources sector’s already-significant economic contribution to the state,” Ms Knol said.

Australia Sovereign Capability Alliance director Martin Hamilton-Smith said rare-earth mining presented “new opportunities for Australian local investment and ownership”.

“A national strategy to ensure rare-earth investments develop under sovereign ownership and control would lock in value and long-term benefit for Australian taxpayers, financiers, investors, miners and skilled workers,” Mr Hamilton-Smith said.

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