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Highlights

  • China’s new rare earth export restrictions intensify global supply chain tensions.

  • Shares in Australian rare earths miners like Lynas, Northern Minerals, and Arafura rally.

  • Australia emerges as a key player in efforts to diversify critical mineral supply chains.

  • Government support and strategic projects aim to reduce Western dependence on China.

Several Australian rare earths miners have seen their share prices jump following China’s decision to tighten export controls on critical minerals. The move, which escalates ongoing trade tensions with the US, sent a positive signal across global markets — yet stocks like Lynas Rare Earths, Northern Minerals, and Arafura Rare Earths bucked the trend, gaining more than 10% in the past week.

These gains reflect growing investor confidence in Australia’s potential as a secure supplier of rare earths and other critical minerals vital to the defence, robotics, clean energy, and automotive sectors.

China’s latest export restrictions apply to seven rare earths and permanent magnets, including medium and heavy metals such as dysprosium (Dy) and terbium (Tb) — both essential in high-performance magnets used in electric vehicles and military applications.

Australia’s Strategic Role Improves

Lynas, backed by Japanese investment and known for mining light rare earths in Western Australia and refining them in Malaysia, has announced record NdPr production and plans to start producing DyTb by mid-2025. It’s also building a rare earths separation facility in Texas, supported by the US Department of Defense — a project now expected to speed up following renewed urgency.

Iluka Resources, meanwhile, is developing a heavy rare earths refinery in Eneabba, Western Australia, with the help of A$1.6 billion in government loans. The facility is scheduled to begin operations in 2027.

Northern Minerals is progressing with the development of a rare earth deposit in Western Australia, highlighting the growing appetite for non-Chinese supply sources. CEO Shane Hartwig noted China’s latest move “proves the risks of single-source supply chains.”

Challenges and Opportunities

Despite the momentum, analysts caution that building a fully integrated supply chain — from mining to refining and manufacturing — remains a major challenge. Gavin Mudd, director of the UK’s Critical Minerals Intelligence Centre, stressed the need for more government intervention to support infrastructure like refineries and recycling facilities.

While China still produces 60% of the world’s rare earths and processes nearly 90%, Australia holds some of the world’s richest high-grade rare earth deposits, positioning it to play a critical role in future supply diversification.