Australia to compete for China's rare earths boom

Treasurer Jim Chalmers wants to stop China's monopoly of global tech supply chains by investing in mining rare earth minerals used to create iPhones and computer monitors,.

Treasurer Jim Chalmers wants to stop China's monopoly of global tech supply chains by investing in mining rare earth minerals used to create iPhones and computer monitors,.

Treasurer Jim Chalmers is calling for Australia to invest in critical minerals, to prevent Beijing from capturing a future monopoly on global tech supply chains. 

Critical minerals, including rare earth elements like lithium and copper, are essential for producing gadgets like smartphones, but they also underpin the transition to clean energy by powering electric cars, solar panels, storage batteries and wind turbines. 

China dominates the mining of rare earth and therefore controls tech supply chains from beginning to end. They also process the majority of the world's lithium - used to make batteries for electric vehicles - despite Australia being the largest producer of the mineral and supplying about 55% of the world's lithium.

Additionally, China creates three-quarters of all lithium-ion batteries and builds more than half the world's electric vehicles.

Chalmers, in a speech to The Australian-PwC critical minerals summit on Friday, said critical minerals would become increasingly important to economic influence in the region. He called Australia's seizure of the market, "the opportunity of the century". 

He warned of the "risks" of China holding this concentration.

"This kind of concentration creates supply chains that are especially vulnerable to disruption – with economic consequences that are far-reaching and deeply-felt."

When Beijing abruptly ceased rare earth exports to Japan in 2010 over a fishing trawler argument, it threatened Japan's high-tech industry.

"Our international friends need to rely on someone, so let’s have them relying on us," Dr Chalmers said, urging global investors to help fast-track the mining and processing of Australia's critical minerals.

Executive chairman of iron ore giant Fortescue Metals Andrew Forrest signaled at an annual shareholder meeting on Tuesday he hopes to start mining and refining rare earths. He joins Lynas and Iluka Resources in a race to produce rare earth metals.

Australia is the third-largest producer of cobalt and the fourth-largest producer of rare earths.