Monday , October 21 2019
Home / Business / Rare earths miner slams ‘complicit’ manufacturers over China predicament

Rare earths miner slams ‘complicit’ manufacturers over China predicament

The White House is worried China may move to block global rare earths supply in response to heightened trade tensions between the countries, which could have serious security implications given their necessity in defence technology.

Ms Lacaze said China’s domination of the supply chain came from a concerted effort by its government and industry.

“Thirty years ago China was not in this position. Chinese industry had resource, but not the downstream steps,” she said.

“With government policy targeted at delivering significant value to the Chinese economy and jobs in the high employment downstream steps, China has executed an integrated strategy with discipline and much success.”

She said the rest of the world’s supply chain was ‘fragmented’ and pointed the finger at European and US manufacturers who had put their own businesses at risk for the sake of cheaper materials.

“For three decades outside-China manufacturers, especially in Europe and the US, have been complicit in supporting a strategy that has delivered a concentrated and at times distorted market, which can ultimately threaten their businesses,” she said.

Loading

“The risk created by this distorted market will only increase as applications continue to grow.”

In order to combat China’s advantages, Ms Lacaze said countries such as Australia and the US could learn from it.

“China has given us a perfect case study of how governments can support the rare earths industry, they put their support behind a few large players and have insourced the technology to be successful,” she said.

“Outside China the market is distorted and open to influence, therefore simply relying on market forces is unlikely to be successful. Support for industry may come in the form of funding or it may be in the form of policy support.

“I would argue the key role of government is to provide a stable operating environment and to implement policies that support industry growth.”

United States Geological Survey National Minerals Information Center director Steven Fortier said regardless of the country, if minerals were concentrated on one country it always posed a risk.

He said heavy rare earths separation and metal alloy production should be a priority for governments.

“Those kinds of capabilities need to be identified, supported and facilitated in some way,” he said.

“We have to be able to diversify the supply chain so that no one country or company has leverage over defence systems for Western nations. It’s just a risk we can’t afford to take, whether it’s likely or not.”

Dr Fortier said both Lynas and Northern Minerals, another WA rare earths miner, had visited him at the White House to brief the Executive Branch and members of the National Security Council.

Lynas' Mt Weld mine in Western Australia.

Lynas’ Mt Weld mine in Western Australia.Credit:Bloomberg

A University of Sydney US Studies Centre report on rare earths released Wednesday said it would not be in China’s interests to impose an embargo on rare earths, because the last time it did it substitutes were found.

“The result would be the stimulation of competitive rare earths production and substitution,” report author David Uren said.

“China’s rare earths companies are aware of the risks of pushing prices too high, because they’ve done it before in 2010. It seriously damaged the market.

“Total sales took a decade to recover, and for some rare earth elements, the damage has been permanent as substitutes have been found.”

Most Viewed in Business

Loading

About admin

Check Also

NAB paid $1m in commissions to unlicensed introducers: ASIC

The document filed by ASIC shows the commissions were typically worth a few thousand dollars …