Inside the rare earths agreement that could rival iron ore boom
When it matures, this boom will be different to the other three because we are returning to the practices that built Broken Hill and Mount Isa in the 19th century.
With the help of our gas and US capital, Australia is going to refine more of our heavy rare earth minerals in Australia rather than export concentrates.
But there is another difference. A rare earths and critical minerals boom will require significant advances in industrial technology to extend markets beyond defence and current industrial markets.
US President Donald Trump embraced the Australian refining strategy (thanks in part to the brilliant work of Australia’s ambassador to the US, Kevin Rudd).
Sadly, in Trump’s earlier meeting with Ukraine’s Volodymyr Zelensky, the US President did not appear to realise how Ukraine fits into the jigsaw as a global leader in rare earths technology, which it is initially applying to drones.
Trump’s desire for another “peace deal” means Ukraine technology is in grave danger of falling into Russian hands because Zelensky was not able to convince Trump that the Russian-Ukraine borders Trump was proposing could not be defended without enormous expenditures.
Ukraine’s drone and heavy rare earth technologies, plus the oil embargoes, are boxing Russia into a corner. Trump did not believe him and preferred the explanation of what was happening in Ukraine than that put forward by Russian President Vladimir Putin.
It’s important for Australia to understand how heavy rare earths technology is set to change a wider area of global industry.
Current usage is linked to combining the heavy rare earths with other materials for specialist defence and industry applications. Technically, there is no reason why the heavy rare earths cannot be combined with, say, iron to produce materials that will compete with many other metals and metal alloys.
What prevents this research and development is the high cost of the heavy rare earths. But such a reduction is now looking closer. Australia and China have developed similar technologies to lower extraction costs, and the ores at Northern Minerals’ Browns Range and Haoma’s Bamboo Creek are higher grade than many of the other Australian heavy rare earth deposits.
And the looming boom has an ironic twist. The ‘Big Australian’, BHP, was pivotal in the iron ore, coal and gas booms and now analysis of samples it took from Bamboo Creek almost 30 years ago will be pivotal in determining the size and grade of a potential heavy rare earths deposit.
We will know in about a month. BHP sold its stake in Bamboo Creek when it exited gold.
The Chinese understood the potential of the Northern Minerals deposit at Browns Range well before most Australians and purchased a significant equity. The pilot plant at Browns Range is using Chinese technology, which is similar to Haoma’s Elazac separation process being used Bamboo Creek.
Australia ordered the Chinese to sell their Northern Minerals equity, but it looks like the buyers are mainly based in Hong Kong, which means the deposit is still under Chinese influence. Haoma is using the technology to extract gold, platinum and silver before separating Terbium and other heavy rare earths which transforms the economics
Apart from Bamboo Creek and Browns Range, Australia has other heavy rare earth deposits which will be important in the US agreement.
Preliminary testing work indicates that there may also be iron-linked heavy rare earth deposits in the Pilbara, which will increase supply and reduce the price to facilitate technology to widen the application of heavy rare earths.
At the moment, China and Ukraine are world leaders in drones – another defence technology using heavy rare earths.
Ukraine is able to pinpoint Russian oil targets and has destroyed about 20 per cent of Russia’s naval fleet (the rest is out of action being tucked away in remote places to avoid being destroyed) and it killed an unprecedented number of Russian and North Korean troops creating a World War I-type stalemate. Russia is paying very high interest rates on the borrowings it requires.
Russia does not seem to have the same control over its drones, which prompted Poland to close its border with Russian ally, Belarus, which impacted China’s ability to trade with Europe via land. China now realises the dangers.
Russian drones over Denmark caused Denmark to start searching the old Russian oil-carrying vessels in the Baltic Sea, delaying their passage. Ukraine is now able to export its wheat and other agricultural commodities.
But Putin has the ear of Trump.
Germany and Poland are emerging as major European backers of Ukraine and will not want a peace deal that could enable Russia to invade at a future date.
Ukrainian technology and its deposits of rare earths could transform Europe, if Russia takes control then Putin or his successor will gain the Ukraine drone and industrial technology plus Ukraine’s rare earth deposits.
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Australia’s post-World War II boom was driven by iron ore, gas and coal. A fourth boom was launched this week in the White House – heavy rare earths like terbium and dysprosium, plus other critical minerals.