Australia Launches Multiple Rare Earth Projects, China Announces A 10% Increase in Output

Australia has identified 15 rare earth and critical mineral projects to champion as part of joint Australia-US efforts to challenge China's dominance in the supply of materials commonly used in the defense and high-tech industries in September last year. The 15 development projects include plans by Australia-listed Northern Minerals to build a mine and processing plant in the Western area.

According to British media news on February 27, Australian mining company Lynas Corp., the world's second-largest rare earth producer, announced that Malaysia has approved its $ 800 million (about 5.6 billion yuan) processing plant to continue operations until 2023. Previously, local residents and environmental groups in Malaysia had been opposed to building a factory in Lynas. But now, Malaysia's approval to continue operations.

But, according to Malaysian requirements, Lynas must establish a factory outside the country by July 2023 to remove low-radioactive materials from materials shipped to Malaysia. On the other hand, Lynas must build a permanent processing waste treatment site within a year, otherwise, its processing plant will once again face a shutdown dilemma.

It is worth mentioning that Lynas did a good job in recent years. Per its earlier released annual report, the company's main product rare earth output reached a record high in the fiscal 2019, and its annual profit increased by 50%. Specific data shows that as of June 30, the after-tax profit for fiscal year 2019 was $ 80 million (about 370 million yuan), which was higher than $ 53.1 million a year ago.

The Australian giant received permission from Malaysia. In the meantime, the Chinese market also announced an important decision. In the middle of this month, China announced that the first batch of rare earth ore mining total control indicators in China in 2020 to 66 thousand tons, which is half of the 132,000 tons of total mining control indicators last year, a 10% higher than the first batch of mining in 2019.

It is reported that due to the increase in domestic demand for rare earths, China raised the annual control index for the total mining of rare earths last year. However, to protect the resource, the country has also stipulated that the total annual exploitation should be controlled within 140,000 tons.

Based on Chinese rare earth mining and processing advantages, Australian think tanks warned that Australia's announcement of launching multiple projects is risky, as the pricing power is in the hands by another country, and more analysis points out that the country may spend years to build a supply chain. In this case, it is difficult for Australia to replace China in the supply market.

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