Australia’s Rare Earth Supply Could be the Key to US National Security

Australia’s Rare Earth Supply Could be the Key to US National Security

Australia hit the geological jackpot.

You want oil? We got it…

You want gas? We got plenty of that too.

Copper, iron ore, zinc, lead, silver, and gold…yep, yep, yep, yep, yep, and hell yes.

We’ve even got the unpopular ores that nobody likes until that commodity cycle is hot again, like uranium and coal.

To boot, because of our climate we can grow and farm almost any agricultural commodity in the world.

Wheat. Wool. Cotton. Sugar. Soya beans. Cattle. Salmon. Pigs. Timber. Dairy. An incredible mix of fruits and vegetables.

Our ability to mine it or grow it is surpassed by very few countries…

Which means that mining and farming are pretty much Australia’s superpowers.

Australia could supply the world for decades

We have some of the oldest rocks in the world.

And you might have noticed one missing from the list above.

I didn’t mention rare earths.

While China has the world’s largest deposit of rare earths, Australia also has significant rare earth deposits too.

Although the name ‘rare earths’ is misleading.

Because there are plenty of those elements around in the Earth’s crust.

It’s just that they are rarely found in deposits economical enough to mine.

Australia alone has 3.2 million tonnes of rare earths.

Even though our supply of rare earths is barely 3% of the world’s total reserve, our meager deposits could supply the world for decades.

Think about that.

China might have almost half the world’s supply of those elements. But Australia’s modest 3% of the stuff could supply the world into 2050.

So the problem of finding rare earths isn’t really a problem.

Believe it or not, the biggest risk when it comes to rare earths, is processing them.

That’s something the world accidently let China dominate…

The superpower of metals

Think of rare earths as the ‘superpower’ of metals.

Adding them into the mix notes Daniel Cordier, a mineral commodities specialist for rare earths at the US Geological Survey, just makes everything ‘better’, saying:

They help everything perform better, and they have their own unique characteristics…particularly in terms of magnetism, temperature resistance and resistance to corrosion.1

A United States Studies Centre report notes that you’ll find tiny bits of them in almost everything.

Pick up any electronic device around you, and it will have small traces of rare earths in it.

Rare earths are used in less than 1% of all military applications in the US…but the military goods can’t be made without them.

We already know that these elements are in high demand for future technology.

Yet securing supply of both is becoming harder.

This lesson was learnt by the world back in 2010.

China banned rare earth exports to Japan in 2010 over an international waters dispute…and as a result Japanese companies started to look for other metal alternatives.2

However, it was this dispute that drove many rare earth users to secure another supply.

Almost a decade ago now, we all learnt an ugly lesson. That is, not only have we farmed off rare earths to China. Allowing them to control the elements deposits. We also allowed them to spend 20 years perfecting the processing of rare earths.

As I explained yesterday, almost every rare earth element ends up in a different final form.

China has had a head start on the rest of the world: They’ve been the dominate producer of rare earths so they have excellent production knowledge and skill sets.

Something every other country with a rare earth deposit lacks.

Because rare earths are crucial to ordinary and military technology…the government is stepping up and declaring rare earths as a strategic resource…

Government to save rare earths?

The rare earths market may end up being propped up by governments in the West.


Cutting off the supply of rare earths in 2010 for just one country became a powerful lesson for countries around the world.

So much so, that when Japan lost their supply, they began looking for alternate mines.

Japan has been instrumental in funding many parts of Australia’s rare earth market.

The 2010 crisis for Japan triggered a wave of investment into alternative sources…and was behind large amounts of funding to the get the Lynas Corporation-owned, Mount Weld — a rare earths processing facility in Western Australian — off the ground.

Just yesterday the Australian Financial Review announced that the Australian government and the US government will work together to support the industry, writing:

The Morrison government is pulling out all stops to make cheap money available for rare earths and other critical minerals projects as it works with the United States on ways to reduce China’s near stranglehold on supply.

The government will set up a dedicated office within the Department of Industry as it looks to secure critical minerals projects in Australia with an emphasis on those strategically important in defence.


The critical minerals push comes as Resources Minister Matt Canavan and US Commerce Secretary Wilbur Ross prepare to co-chair a meeting of the US-Australia Critical Minerals Dialogue in Washington on Tuesday.

Australia and the US have made it clear they are worried about rare earths supply in particular because the resources are needed in leading-edge technology, including guided missile systems and other defence equipment.

The entire global rare earths industry is worth less than US$4 billion a year.

Which isn’t much.

However, for two allies to step in and work towards protecting such a small industry, tells us a lot about how critical these minerals are to our future.

Proving once again, that Australia’s geological jackpot continues.

Until next time,

Shae Russell Signature

Shae Russell,
Editor, The Daily Reckoning Australia

PS: Five months ago I interviewed a geologist with a military background. In that interview he stated that the government will have to step in and save ‘rare earths’ for our own protection. There was nothing in the media about this at the time. Yet because of my contact, I was able to follow this story much earlier than the mainstream. How can you get your hands on this insider information? Over the coming weeks, I’ll reveal all…

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