Government backing for critical minerals should focus on four rare earths vital for clean energy and national security and emulate an existing scheme underpinning renewable projects, the sector has told ministers.
The Association of Mining and Exploration Companies has released a blueprint, commissioned by the Government, for underwriting rare earths projects using the critical minerals strategic reserve Anthony Albanese announced during the election and spruiked to Donald Trump.
It says the strongest market interest is in praseodymium, neodymium, dysprosium and terbium.
These are used to create the very strong magnets used in electric motors in everything from cars, phones, scooters and cordless power tools to lifts, wind turbines, fighter jets and nuclear-powered submarines.
“It’s what’s most important and most in demand from our strategic partners,” AMEC chief executive Warren Pearce told The West.
The United States, European Union, Canada, Japan and Korea, among others, have been in talks with Australia about how to break China’s stranglehold on critical minerals and rare earths and market-distorting practices.
AMEC has proposed these projects be underwritten with a “rare earths production scheme” operating similarly to the capacity investment scheme already running for large-scale renewables and storage projects.
Under the proposal developed in concert with 10 rare earths companies, including Arafura, Wyloo, Hastings and Northern Minerals, the government would call for a particular quantity of one of the four rare earths and set floor and ceiling prices.
If the price drops below the floor, the government pays the difference, and if it soars past the ceiling, the government receives a percentage of the revenue.
Mr Pearce said industry knew it couldn’t ask for a blank cheque from taxpayer funds.
“It helps these projects get up, it helps make a clear connection in the supply chain with our strategic partners, and it gives Australia a strong ability to influence or be a strong and reliable partner to be a provider of those critical minerals,” he said of the proposal.
“If you set up a model that gives government the ability to control or cap its potential risk, you also set up a possibility that they can more confidently expand the program down the road to ensure they’re achieving their objectives.”
The Government is expected to release the next steps of its critical minerals strategy within weeks.
A spokesperson for Resources Minister Madeleine King said the strategic reserve would involve offtake agreements and selective stockpiling of critical minerals.
“The reserve will focus on a subset of Australia’s 31 critical minerals that are most important for Australia’s national security and the security of our key partners,” they said.
The final list will be announced after consultation with industry and partners including internationally.
https://thewest.com.au/politics/federal-politics/the-association-of-mining-and-exploration-companies-releases-rare-earths-support-blueprint-c-21183267
