Key facts
- Australia should be realistic about its competitive landscape in critical minerals and batteries.
- Avoiding collaboration with China on investment and technology is considered a mistake.
- Australia is being pulled into US-China strategic competition to its disadvantage.
- Explorers face pressure to align with the US, limiting Chinese investment and early opportunities.
- China has imposed export controls on key minerals and dual-use technologies.
- Australia's Foreign Investment Review Board has ordered divestments from Chinese-linked investors in rare earth projects.
- Developing intermediate and downstream products closer to end-users may be more advantageous.
- Focusing on next-generation battery technologies is recommended over competing with China's current strengths.
Panellists at a recent Argus forum in Perth, Australia, have urged the nation to adopt a realistic approach to its role in the critical minerals and battery sectors, suggesting that shunning collaboration with China on investment and technology would be a strategic error.
Warren Pearce, chief executive of Australia's Association of Mining and Exploration Companies, stated that Australia has been detrimentally caught in the middle of US-China strategic competition. He argued that Australia should have leveraged the rivalry to attract investment, but instead, local explorers are facing pressure to align with the US from the outset, consequently excluding Chinese investment and early-stage opportunities.
Pearce highlighted that US interests do not always align with Australia's and that cooperation with China is possible for technological advancement and capability building, particularly for minerals not critical to defence or national security. China has already implemented export controls on gallium, germanium, and various rare earth products, with further restrictions imposed on exports to the US and Japan.
Recent decisions by Australia's Foreign Investment Review Board (FIRB), such as ordering China-linked investors to divest from Northern Minerals' Browns Range heavy rare earth project, could further limit Chinese investment. Despite sell-off orders, some investors have failed to comply.
Stephen Motteram, CFO of Australian Strategic Materials (ASM), advised Australian producers to consider developing intermediate and downstream products closer to end-users. ASM is developing the Dubbo rare earth project and manufacturing rare earth alloys in South Korea. He noted that consumer demand for non-China alternatives is crucial for Western projects to proceed.
In the battery sector, Ron Mitchell, CEO of Firebird Metals, suggested that competing directly with China's established battery chemistry expertise is unlikely to succeed. He advocated for focusing on next-generation battery technologies and optimizing production pathways to offset higher costs. Firebird Metals is developing the Oakover manganese project and a demonstration plant for cathode active material production. Projections indicate a significant growth in the market share of high-manganese battery chemistries.