By Anthony Fensom
Backed by government, Australia’s miners are moving to loosen China’s iron grip on the rare earths market. For an industry critical to defence and the energy transition, the latest moves aim to build new Western supply chains amid Beijing’s export bans.
Canberra has offered grants and loans to miners to spur new projects under its Future Made in Australia policy.
In January 2025, the Albanese Government doubled down on its commitment to Arafura Rare Earths’ Nolans rare earth project in the Northern Territory, with the National Reconstruction Fund pledging a $200-million equity investment, increasing the government’s total exposure to more than $1 billion.
The government said the funding would allow the company to ‘press ahead with raising the remaining funds required to commence development of the new mine and processing facility’.
Located 130 kilometres north of Alice Springs, the Nolans project is expected to produce around 4440 tonnes of neodymium and praseodymium, accounting for around four per cent of global demand from 2032.
Arafura expects that the mine and processing facility will cost around $1.7 billion to build, creating the first such ore-to-oxide operation in Australia.
‘This investment will create a sovereign supply of these critical minerals, mined and refined onshore, as well as new export opportunities,’ says Minister for Industry and Science Ed Husic.
In December 2024, the Nolans project was added to the Materials Security Partnership (MSP) list of projects. The MSP comprises a 14-nation partnership seeking a ‘reliable and environmental, social, and governance–credentialed global rare earths supply chain’.
Arafura Chief Executive Darryl Cuzzubbo told the Australian Financial Review that the company had secured offtake deals with customers prepared to pay higher prices for supply security, including from Europe, South Korea and the United States.
Another new entrant, Iluka Resources, secured an additional $400-million loan from the government in December 2024, supporting its Eneabba rare earths refinery in Western Australia. The new loan added to the original $1.25-billion loan provided by Export Finance Australia in 2022, with the project expected to cost up to $1.8 billion.
Commissioning is expected in 2027, with the plant expected to account for around 10 per cent of the world’s rare earth oxide (REO) supply and refine more than a third of heavy REOs within a decade of commencement.
Another Australian miner to receive government funding is Lynas Rare Earths, which was awarded a US$258-million grant from the U.S. Department of Defense to build a heavy rare earths refinery in Texas.
In November 2024, Lynas opened its $800-million Kalgoorlie rare earths processing facility, which, according to Chief Executive Amanda Lacaze, ‘established downstream rare earths processing in Australia for the first time’.
Mixed rare earth carbonate produced in Kalgoorlie will be shipped to Lynas’s Malaysian facility for processing, ultimately also supplying its future US plant.
The new projects aim to challenge the market control held by China, which accounted for over 90 per cent of global rare earths processing capacity in 2024, according to Benchmark Mineral Intelligence.
China’s moves to impose export controls on rare earths have left Western nations scrambling to secure supply. Beijing has banned exports to the United States of antimony, gallium and germanium, as well as exports of technology used to make rare earth magnets, among other restrictions on critical minerals exports.
Yet, Australia’s moves could challenge China’s market dominance. Due to government support, the nation’s share of global rare earths supply is projected to increase from around five per cent in 2025 to 20 per cent by 2028, according to Benchmark Mineral Intelligence.
‘Australia is leading upstream financing commitments towards the development of an ex-China rare earths supply chain, critical for the national and economic security of Western nations,’ Benchmark Mineral Intelligence said in a 15 February statement.
‘The surge in Australia’s investment and supply is key in countering China’s supply chain dominance.’
Magnet recycling
Not all rare earths miners plan to ‘mine’ their product.Melbourne-based Ionic Rare Earths has flagged plans to develop a commercial REO manufacturing facility in Belfast, Northern Ireland, recycling pre-consumer rare earth magnet scrap and end-of-life magnets for Western customers.
A feasibility study released in November 2024 projected a net present value for the proposed 20-year operation of US$502 million, with capital expenditure costs of US$108 million. The study targeted production capacity of 400 tonnes per annum of separated magnet REOs.
‘The study confirms that the commercial case for magnet recycling is compelling, complementing the clear environmental and sustainability benefits, as well as the imminent need for rare earth element production outside of China,’ Ionic Rare Earths Managing Director Tim Harrison says.
‘Financially, this represents a low capital risk pathway to sovereign magnet REO production compared to alternative sources, offering strong financial returns based on a “circular economy” model of sustainable production, backed by the UK Government and our project partners.’
In December 2024, the company lodged an application for funding under the British Government’s Automotive Transformation Fund, noting that the United Kingdom had provided ‘consistently strong backing for [subsidiary] Ionic Technologies and its patented, leading-edge magnet recycling’.
In January 2025, the company announced a life cycle assessment by analysts Minviro, seeking to demonstrate the smaller carbon footprint of its technology compared to conventional sources.
The Australian company is eyeing further international expansion, signing a memorandum of understanding with DNA Link in February 2025 to collaborate on magnet recycling and end-of-life magnet sourcing in South Korea, the world’s third-largest magnet market.
Ionic Rare Earths is also targeting Brazil, where its Viridion joint venture with Viridis Mining and Minerals aims to develop an REO refinery and magnet recycling facilities in Minas Gerais, Brazil.
‘Ionic Rare Earths is building a global industrial technology business based on our patented magnet recycling technology,’ Ionic Rare Earths Chairman Brett Lynch says. ‘Our de-risked, de-mined strategy is the fastest pathway to delivering shareholder value, replicating our Belfast model in new international markets to swiftly create a secure and sustainable ex‑China rare earths supply chain.’
With production plans at home and abroad, Australia’s rare earth miners are building new supply chains that could prove vital in this key industry of the 21st century.
