On Wednesday, Prime Minister Scott Morrison announced $243 million in fresh grants for Australian projects that will source and refine critical minerals, including rare-earth metals – key manufacturing ingredients in the renewable energy economy.
The move, in advance of a looming federal election, kills two political birds with one policy stone. In theory, it will build a local industry that supports the world’s shift to a green-energy future, for which these minerals are deeply needed. It will also reduce Australia’s reliance on China, which currently supplies almost all of the world’s critical minerals, and with whom our international relations continue to fray.
Resources Minister Keith Pitt explicitly pointed out that Russia’s oil dominance over other European countries since the onset of the Ukraine invasion was part of what prompted the government to reassess its reliance on China, which holds a roughly 70–80% stake in the global critical minerals market.
“These projects are about manufacturing the products and materials Australians need and the world needs, by making them right here at home,” Morrison said in an interview with news.com.au.
The funded projects include:
- $119.6 million for an integrated nickel manganese cobalt battery material refinery hub in the Kalgoorlie region, supporting 175 initial permanent jobs from 2023, which will be built in partnership between Pure Battery Technologies and Poseidon Nickel
- $30 million for Arafura Resources first-of-its kind rare earth separation plant, the Nolans Project, north of Alice Springs, which will supply neodymium and praseodymium, key raw materials needed for the magnets used in an EV’s motor.
- $49 million for a vanadium-processing project run by Australian Vanadium to complement its Meekatharra mine in WA. The vanadium extracted and processed here will then be transported to another onshore plant to be used in battery making.
- $45 million for a high-purity alumina (aluminium oxide) production facility near Gladstone, between Alpha HPA and Orica.
But absent from the PM’s announcement is a broader plan to locate more of the links in the EV and renewable supply chain onshore: an economic opportunity some policy experts believe the nation should take to help us transition away from our fossil-fuel industry which, even as its death knell sounds, doesn’t seem to want to die.
What are critical and rare-earth metals?
Critical minerals are vital for the world’s economic wellbeing; nickel, manganese and cobalt, all of which are mined in Australia, are needed to make batteries, for example, which will power a greener future, and alumina (aluminium oxide) is needed to make lithium-ion batteries. People often confuse critical and rare-earth minerals, but rare earths make up a specific, highly useful category of their own within the critical minerals family.
The rare earth metals are 15 elements in the lanthanide series of the periodic table (plus two extra ones that aren’t in the lanthanide series). They’re not, in fact, particularly rare in the Earth’s crust; according to Geosciences Australia, cerium is the 25th most abundant element in the crust. As research scientist Chris Vernon, who leads the Green Mineral Technologies initiative at CSIRO, puts it, the first rare earths on the chain, lanthanum and cerium, are “common as muck”.
The rare earths are a bit like chemical wunderkinds: they’re used for all sorts of things most of us don’t even know we need.
Lanthanum and cerium are catalysts in a number of industrial processes; neodymium and praseodymium (commonly short-handed as NdPr) make super-strong magnets, which we need for effective motors in things like wind turbines and electric vehicles; these last two, plus gadolinium, are also used in the teeny tiny magnets in your smartphone’s speaker and microphone. Other rare earths, such as ytterbium and europium, create the colours in LED lighting.
According to Allison Britt, director of mineral resources advice and promotion at Geoscience Australia, rare earths are even used in rapid antigen tests to create the thin red lines that tell you if you’re positive or negative.
So, all these minerals are important for the functioning of the global economy. Most importantly, we need them for renewable energy, particularly for our wind turbines, electric vehicles, and batteries – without them, we have little hope of powering a net-zero future.
What are the benefits of an on-shore critical mineral sector?
We already mine critical minerals here in Australia – the nation produces almost half of the worldwide supply of lithium, for example. But the touted projects would ramp up extraction, and in particular will amount to the first processing of rare earths onshore – up until now, we’ve simply shipped our raw rare-earths abroad.
According to Vernon, “the thing with rare earths is that [up until now] the West forgot about them”.
“In the 1980s China started producing rare earths at really cheap prices, before we’d started to use a lot of rare earths in magnets, but we weren’t even building electric vehicles, so we didn’t care.”
Interest has piqued since the 2010s, with more rare-earth prospecting, but essentially Australia, despite being the fourth-largest producer of rare-earths in the world, still sits on a vast and untapped quantity of these materials.
“The statistics are that Australia might have something like 20% of the world’s supply of rare earths,” Vernon says. “And I think that could go up quite considerably, once we start looking at some of these other deposits.”
Australia sits on a vast and untapped quantity of these materials
Because Australia exports its rare earths elsewhere, there’s a gap for a potentially productive industry – and, in theory, one that could create more jobs as fossil fuel jobs inevitably dry out. That’s what makes these new projects different. The Nolans Project will be the first plant that can actually separate out rare earths onshore, which is notoriously tricky – the rare earths, having similar chemical properties, like to cling to one another.
Some commentators think we should be boldly going even further with our mineral industry, reviving the bygone days when Australia was a vehicle manufacturing hub, or developing our own renewable technology supply-chain that’s wholly local.
In February, the Australia Institute released a report arguing that the nation should build an electric vehicle manufacturing industry, to help propel a cleaner energy future and secure local jobs. The report points out that Australia has almost all the crucial elements for such an industry: rich mineral reserves, a big industrial base, and a skilled minerals workforce.
Gail Broadbent, a researcher in electric vehicle uptake and policy at the University of New South Wales, agrees.
“If we just dig it out and then ship it, we don’t capture the value,” Broadbent says. “We’re in a very lucky position that we’re a continent and we have just about everything you need to make electric cars, including a skilled workforce that can actually build them.
“We’ve got the opportunity to remove the workforce from coal, here’s an opportunity to get them to work on something that’s a bit more sustainable”
“We’ve got a coal industry that needs to be closed down, and here we’ve got the opportunity to remove the workforce from coal, here’s an opportunity to get them to work on something that’s a bit more sustainable.”
CSIRO materials scientist Matthew Hill agrees an onshore minerals supply chain will offer needed benefits as the world, and the country, adjusts to this strange time of energy transition.
“If we can start to have a local industry, there’s all the jobs and the higher value of producing a value-added product instead of just selling the raw commodity,” he says. “But more than that, it will underpin the whole economy by helping to provide access to cheap energy [ie from renewable sources].”
Broadbent says it’s important, though, that these kinds of projects are matched with an actual impetus to wind down the fossil fuel sector.
“It’s a great thing as long as you don’t just say, ‘oh, the coal can keep going and we’ll just expand these other things’, you do have to provide a just transition out of the coal industry.”
But doing so, Broadbent says, would benefit people and the planet.
“Here’s an opportunity to develop something that we might need for Australia’s future prosperity, and in fact the planet’s viability in the long-term.”
Ok, sounds great, but are there any problems with all this mining?
If this gets your hackles up you wouldn’t be the only one. Mining and resource extraction are increasingly contentious concepts: we’ve largely built the climate crisis by taking finite resources from the ground and burning them up, and we’ve irreparably scarred landscapes and destroyed precious culture in the process.
Although critical for a sustainable future, rare earth mining since the 1990s has left a sordid legacy in the mountains of China, where it was largely unregulated until the 2010s.
Back then, rare earth mining often involved removing layers of topsoil and transporting them to leaching ponds, where acids and chemicals were used to separate the rare earth elements from the soil that contained them. Such leaching and tailings ponds dot the Chinese countryside and some have leaked their contents into the soil and water supply of nearby villages.
And rare earth mining typically generates large volumes of toxic and radioactive materials, because thorium and uranium are co-extracted with the metals. In September 2021, the Public Health Association of Australia released a policy statement warning that imperfect rare-earth mining could poses a serious risk to human health; it recommended attempting to source rare earths by recycling existing components in electronic waste, and developing strict environmental guidelines for rare-earth projects.
“One of the best ways to be green is to use less energy and create less waste, and I think Australian companies understand that”
But Vernon says extraction processes today are better than ever, and he believes Australia’s mining industry has a strong incentive to adhere to strict environmental standards.
“One of the best ways to be green is to use less energy and create less waste, and I think Australian companies understand that.”
And, to some extent, we have no choice: “Generally speaking, you can’t generate power from modern wind farms or build an electric vehicle without rare earths,” notes Britt.
“Last year, the International Energy Agency published a report that showed if countries meet their stated clean energy policy objectives, then the demand for rare earths in clean energy technologies will triple,” she explains.
“The simple fact of the matter is people all over the world want to buy an electric car, they want to use renewable energy, but at the same time they want to know that the cobalt in their car battery hasn’t come from child labour, and they want to know the rare earths in their electric motor haven’t come from an environmentally destructive process.”
“I would trust what’s done in my backyard, rather than somebody else’s,” adds Vernon.
The best solutions might be close: researchers are currently developing new methods that might one day allow us to mine these important minerals sustainably. One research team, a collaboration between Deakin University’s Institute for Frontier Materials and the Tecnalia research centre in Spain, say they’ve developed a new way to use environmentally friendly chemicals to recover rare-earth metals. It’s a process called ‘electrodeposition’, in which a low electric current causes the metals to deposit on a desired surface.
Vernon is a fervent advocate for the importance of recycling rare earths, not just because we’ve got a huge supply languishing in unused or disposed-of electronic equipment, but because rare earths are a finite resource, and we will one day exhaust supply if we’re not careful.
“I’m pretty passionate about recycling,” he says. “It’s difficult to recycle little things that contain rare-earth magnets, but when you think about recycling the electric motor out of an air conditioner, or a wind turbine, or a worn-out electric vehicle, they’re big, chunky magnets and there’s a super easy way to recycle them.”
Vernon concedes that we don’t have a rare earth recycling capacity here in Australia as it stands, and that’s something he’d like to see.
“We should be looking towards a whole value-chain,” he says. “The circular economy approach is absolutely necessary to reduce the environmental impact, and to ensure that we’ve got the materials to enjoy in the future.”
He’s optimistic that a more circular approach to the materials supply chain, including more sophisticated recycling abilities, could be around the corner.
“There’s not a big demand in Australia yet, but it’s coming.”