Pacific Money | Economy | Oceania

Australia’s Rare Earth Sector

Opportunity, risk and the commitment gap

Rare earth elements (REE) are 17 minerals that quietly underpin much of the modern global economy. Found in everything from electric vehicle motors and wind turbines to fighter jets and semiconductor fabrication equipment, they are crucial to civilian and military technology. China produces nearly 70 percent of the world’s rare earths and dominates the processing industry, giving Beijing unrivaled leverage over a crucial component of global supply chains. China weaponized that leverage in 2025, when it implemented a series of escalating export controls. A temporary reprieve – a one-year pause on its most recent restrictions, agreed during a Trump-Xi summit – has offered some breathing room for affected industries. But with many other controls still in force and the pause set to expire in November 2026, the fundamental vulnerability for the rest of the world remains unresolved.

International governments and businesses are now scrambling to diversify their REE supply chains and reduce dependence on China. From Greenland’s vast heavy rare earth deposits to coal waste sites in the American Appalachian mountains, capital is flowing into alternative sources at an unprecedented pace. Western buyers are now willing to pay 15–30 percent premiums for non-Chinese supply, and multi-year offtake agreements with guaranteed pricing have become the new norm. Japan has urged G7 unity against China’s export curbs, while India is negotiating trade deals with Chile and Peru to broaden its sourcing options.

In this environment, Australia is........

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