(Feb 4): Australia is weighing a price floor for critical minerals, including rare earths, to help its producers counter China’s dominance and draw foreign investment to build new mines and processing projects.
The nation, holder of the fourth-largest rare earth reserves, is among countries weighing a minimum price for the critical minerals used in everything from defence industries to tech firms to help producers compete in a market saturated by Chinese supply.
The policy would rely on support from Export Finance Australia, the government’s export credit agency, Resources Minister Madeleine King said at a press conference in Washington DC, where representatives from multiple countries gathered for a Trump administration-convened summit on critical minerals.
“We will work to make sure Export Finance Australia has the right financial tools to be able to introduce price floors,” she said. Australia was well behind China in processing and refining of rare earths and would need to work hard to catch up, King said, adding that the country’s resources industry has always depended on foreign investment.
The move comes just a day after US President Donald Trump announced plans to launch the so-called Project Vault, a strategic critical-minerals stockpile with US$12 billion ($15.25 billion) in seed money to slash America’s reliance on Chinese rare earths and other metals. China has a near-monopoly over processed critical minerals and has previously used supply as leverage during trade disputes.
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The European Union will pitch the US on a critical minerals partnership to curb China’s influence, looking to shape the Trump administration’s push to strike global agreements this week.
Like the US, Australia is planning to build its own critical minerals stockpiles, albeit smaller at A$1.2 billion (US$843 million or $1.07 billion). The government will initially focus on purchasing rare-earth elements, antimony and gallium. The effort sits alongside a landmark pact Australia signed with the US in 2025 to boost America’s access to rare earths and other minerals.
Meanwhile, as part of the sales pitch, the government has launched an online prospectus outlining 49 mines and 29 processing facilities “ready for investment”, according to King, adding that investment could take the form of offtake agreements.
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The US last year offered to guarantee a price floor to one key producer, but that has so far not been extended to any other companies.
Shares of Sydney-listed critical minerals companies rallied on Wednesday. Lynas Rare Earths Ltd soared as much as 6.9%, Iluka Resources Ltd advanced 5.2%, Arafura Rare Earths Ltd climbed 6.3% and Sunrise Energy Metals Ltd jumped 10% during morning trade.
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