1. Albanese named two \u2018priority projects\u2019 in Australia <\/p>\n
The Australian prime minister specifically referred to two \u201cpriority projects\u201d, one by Alcoa and the other by Arufura Rare Earths, that will get an injection of capital from the government as part of a broader list.<\/p>\n
The first is a proposed gallium plant in Western Australia, to be co-located at one of Alcoa\u2019s alumina refineries.<\/p>\n
Gallium is a strategic mineral vital for modern technologies like military equipment \u2013 including in advanced electronic warfare systems such as missile guidance technology and radar.<\/p>\n
The US is wholly dependent on gallium imports, with China having near complete dominance over its production \u2013 it is typically churned out as a byproduct by the country\u2019s vast network of aluminium smelters.<\/p>\n
Sign up: AU Breaking News email<\/a><\/p>\n Like much of the critical mineral supply chain, China priced out rival gallium producers over several decades until it achieved its monopoly position. The US briefly had a dedicated gallium mine in the 1980s, according to the Atlantic Council, an American thinktank, but it proved unsustainable.<\/p>\n The Australian government will invest up to $US200m in the Alcoa operation while the US will also have an ownership stake. Japan is also a project partner.<\/p>\n 2. The deal aims to end China\u2019s monopoly on rare earth production<\/p>\n China is a large producer of rare earths and has near-complete control over the refining processes<\/a> needed to make the minerals useful. It also produces about 90% of rare-earth magnets.<\/p>\n Its recent curbs on supplies<\/a> has shown how reliant the rest of the world now is on its supplies.<\/p>\n The Australian government announced it will provide a $US100m equity injection into the Arafura Rare Earths project, located north of Alice Springs in the Northern Territory.\u00a0<\/p>\n The company, backed by Australia\u2019s richest person, Gina Rinehart, plans to produce the rare earth oxides \u2013 neodymium and praseodymium \u2013 crucial to the production of magnets.<\/p>\n Rare-earth magnets are used in wind turbines, medical devices, combustion and electric motors and ballistic missile guidance systems.<\/p>\n The US government is considering investing up to $US300m, but first requires further due diligence.<\/p>\n Australia has some rare earths processing capability through Lynas\u2019 WA facility and the government has backed the development of a project by Iluka designed to produce several oxides.<\/p>\n 3. The deal doesn\u2019t necessarily mean Australia will become a high-end manufacturer<\/p>\n Rare earths oxide in Australia would still need to be transported to global partners for metallisation, followed by magnet-making, given Australia does not currently have the manufacturing processes.<\/p>\n Tim Buckley, director of thinktank Climate Energy Finance, says it is urgent to position Australia as \u201cmore than a quarry digging and shipping our raw commodities\u201d.<\/p>\n