Can a U.S.-Australia Deal on Rare Earths Counter China’s Dominance?

In a bid to challenge China's stranglehold on the global rare earths market, the United States and Australia are exploring a new partnership that could help diversify the supply of these critical minerals. Rare earths, a group of 17 elements used in everything from high-tech gadgets to renewable energy technologies, are a crucial component of modern industries. However, China currently dominates the market, accounting for over 80% of global production and processing.Australia, with its vast reserves of rare earths and expertise in mining, is well-positioned to help the United States reduce its reliance on China. The two countries are discussing a deal that would facilitate investment in Australian rare earths projects, with the goal of establishing a more robust and diversified supply chain. The United States is keen to secure alternative sources of rare earths, as concerns about China's growing assertiveness and trade tensions have highlighted the risks of dependence on a single supplier.However, building a new rare earths industry from scratch will not happen overnight. Developing mines, refineries, and factories will require significant investment and take years to come online. Australia's Lynas Rare Earths, one of the world's largest producers outside of China, has already begun construction on a new processing facility in Texas, but similar projects will be needed to make a meaningful dent in China's dominance.Despite these challenges, the U.S.-Australia partnership has the potential to make a significant impact on the global rare earths market. With Australia's expertise and the United States' willingness to invest, the two countries can work together to create a more stable and secure supply chain. This could involve not only extracting and processing rare earths in Australia but also developing new technologies and manufacturing capabilities in the United States.While it remains to be seen whether the U.S.-Australia deal will ultimately succeed in countering China's dominance, it represents an important step towards reducing the world's reliance on a single supplier. As the global demand for rare earths continues to grow, the development of alternative sources will be crucial for ensuring the long-term stability of supply. The partnership between the United States and Australia is a positive move in this direction, and it will be closely watched by industries and governments around the world.