(Jan 12): Australia plans to buy and stockpile minerals essential for defence and advanced technologies from domestic mining companies to help strengthen global supply chains.
The government will initially focus on rare-earth elements, antimony and gallium for the A$1.2 billion (RM3.27 million) stockpile, Treasurer Jim Chalmers, Resources Minister Madeleine King and Trade Minister Don Farrell said in a statement Monday (Jan 12). Australia is one of the top producers of rare earths outside China and the reserve is intended to offset some of Beijing’s influence.
Critical minerals have been at the centre of geopolitical and trade tensions in recent years as part of a broader tussle among governments to ensure access to vital commodities. Beijing used its dominance of the sector to its advantage in responding to the trade war initiated by US President Donald Trump, prompting a push by rivals to boost local output as well as stockpiling.
“Developing the Strategic Reserve is another important step in Australia leading on critical minerals globally,” Chalmers said in the statement. The stockpile will ensure “Australia is at the centre of efforts to build stable and reliable supply chains for our international partners”, he said.
Shares in Lynas Rare Earths Ltd rallied as much as 6.5% in Sydney while Larvotto Resources Ltd — which is developing one of the world’s biggest antimony mines in Australia — soared 8.8%.
“The federal government is leading from the front on this and we’re extremely happy antimony is one of the focuses,” Larvotto CEO Ron Meeks told Bloomberg by phone. “We will produce 7% of the world’s antimony, so we will be one of the largest suppliers. We’ll start production in August.”
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Larvotto has had multiple conversations with the Australian government and the US Trump administration over supporting international supply chains for antimony from its Hillgrove project in New South Wales state.
The stockpile plan comes after China recently restricted exports of rare earths to Japan amid rising tensions over Taiwan. It also follows a landmark pact signed last year between Australia and President Trump to boost the US’s access to rare earths and other critical minerals to counter China’s dominance. That deal will support a pipeline of projects across critical minerals and rare earths valued at about A$13 billion, according to Monday’s statement.
A key objective for the reserve would be to establish a floor for critical-mineral prices, the government has said. That would help protect producers against future market slumps driven by surges of cheap supplies from China.
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Rare earths are used to make permanent magnets essential in technologies from fighter jets to medical equipment. Antimony is used in flame retardants, electronics and specialist alloys while gallium is key for advanced semiconductors used in radar and telecommunications.
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