Lynas boss Amanda Lacaze accused western governments of “policy ADHD” when it comes to critical minerals like rare earths. Credit:Eamon Gallagher
“The west is almost offended by China’s dominance in this industry. Their dominance in the market is a result of 30 years of the west saying we just want (China market) access.”
When Lynas was on its financial knees, and struggling with its quest to become the only rare earths miner and processor outside of China, it was Japanese government money that kept the struggling company afloat with cheap loans.
The cheap loans are still in place, and as Lacaze told to investors this week, they ensure the Japanese industry effectively gets first right of refusal to Lynas’ rare earths.
Japan’s lesson with China is now being learned by western governments like the US and Australia. There are no signs that the federal government is looking to intervene directly in limiting Chinese investment into rare earths, but post-pandemic geopolitics may yet play a decisive role in shaping the road ahead for the likes of Lynas, with China no longer the only game in town.
“We’ve had the geopolitics, we’ve had the pandemic, and it’s reminded everyone that maybe that’s not quite the best strategy,” Lacaze said.
And Chalmers agrees.
He noted that China produces 75 per cent of all lithium-ion batteries. It also produces 80 per cent of the world’s graphite, mines 60 per cent of the lithium market and accounts for even more of the lithium processing market.
“In 2022, you don’t need to look that far back, or that far forward, to appreciate the challenges and risks that such concentration can pose,” Chalmers said.
“What we are seeing with the supply of gas now, we have seen plenty of times before with supply of oil – where supply and price become hostage to geopolitical competition, conflict, or circumstance.”
And he is well aware of the challenges the sector faces – beyond funding – when it comes to disentangling itself from China’s ecosphere.
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