Australia’s critical steps towards securing a future opportunity

The Dubbo rare earths project in New South Wales. Image: ASM.

The Australian Government is focussing its attention on identifying and progressing opportunities within the critical minerals and rare earths sectors. Salomae Haselgrove finds out what role two Australian companies can play.

Australia has the potential to be a global leader in the environmentally responsible supply of critical minerals like lithium, zircon and dysprosium due to its large but underexplored deposits.

While the nation is a leader in the exploration, extraction and production of critical minerals, Australia is lagging behind when it comes to downstream processing and manufacturing opportunities.

Due to the long-time dominance of China in this space, it is a challenging field to break into, but companies like Northern Minerals and Australian Strategic Materials (ASM) are taking steps by forming partnerships with nations that are consumers of critical minerals.

Northern Minerals has inked an agreement with international engineering company thyssenkrupp, which will buy rare earths from the mining company and support the expansion of its Browns Range dysprosium project in Western Australia.

As Northern Minerals chief executive officer Mark Tory explains, the partnership with thyssenkrupp, which has existing relationships with the Chinese market, will help the Perth-based company to establish itself within the critical minerals super nation.

“China has done a fantastic job over the last 20 to 30 years developing the downstream rare earths industry so the market is controlled by China,” Tory tells Australian Mining.

“It isn’t just the mining and processing that’s over there, it’s the magnet making and electric vehicle industries, so it’s going to be really challenging for Australia to break in.

“Our agreement with thyssenkrupp will be helpful as they have existing relationship into where we need to go in China, so they will act as a marketing arm for us and our Browns Range project.”

The agreement will see thyssenkrupp purchase 100 per cent of the output from the Browns Range pilot plant and give Northern Minerals the flexibility to supply heavy rare earths as separated products in the future.

This allows Northern Minerals to focus on its operations at Browns Range and develop new technology for this on-site separation, further distancing its capabilities from China’s dominance in the sector.

“The product we produce at Browns Range is a carbonate that has all 17 elements in it all mixed together in a pure form,” Tory explains. “They still need to be separated and the only place that can be done at present is China.

“thyssenkrupp has existing relationships with separation companies in China, which means we don’t have to go in there and form those relationships ourselves.”

Northern Minerals’ next step is to complete further testing of its beneficiation plant to extract the desired rare earth elements and produce concentrate closer to the end product before it is exported.

The company has invested $17 million in a pilot plant to test its abilities before doing an updated feasibility study to build a larger scale plant to complete more of the downstream process in Australia.

“Because China dominates the downstream industry, the next logical step for Northern Minerals is magnet making,” Tory says.

“China holds about 85 per cent of the market for permanent magnets. While we’re moving to make sure we can process and separate rare earths in Australia, the end market for permanent magnets is still in China.”

For the Australian critical minerals industry to be successful, Tory says the government must create a long-term plan based on the way China has built itself up over three decades in this industry.

“Critical minerals are seen as highly valuable and we’ve got to think of the long-term strategy and think outside of the box, like China, if we’re really serious about a future in critical minerals,” he says.

“We are in the perfect position globally in relation to heavy rare earths. We have high-grade deposits – we just need to be able to commercialise it.”

The Dubbo project pilot plant. Image: ASM.

ASM is another Australian critical minerals company that has set up a strategic relationship in Asia by partnering with South Korean company Zircon Technology to produce high purity dysprosium.

The company then acquired 95 per cent of its joint venture partner in early November, giving it access to the low emission and high purity metal-refining technology and Zircon’s pilot plant.

The company partnered with South Korea as it is highly developed in manufacturing with a very stable manufacturing industry, but does not have the natural resources to source the materials it requires for modern vehicles and technologies.

For the partnership, Zircon Technology will fund the final stage research and feasibility of converting metals from the Dubbo project into oxide, so it is of high marketable purity.

ASM will invest $US1.2 million ($1.7 million) towards a pilot plant facility for late stage piloting and feasibility studies for a larger scale development and commercialisation of the process.

ASM managing director David Woodall says nations like South Korea are looking to alternative sources for the rare earth materials they require for manufacturing because the publicised tensions between the United States and China are threatening trade relationships.

“South Korea realised it has to have an alternative supply of critical minerals with the increased tensions between the United States and China, increased nationalism within the trade sphere and COVID-19,” Woodall says.

“To protect its manufacturing sector, it developed a strategy to de-risk its critical minerals supply chain.”

From here, ASM formed a partnership with the South Korean Government, which provided the company with a $US4.5 million grant to progress its Dubbo project, which has a large in-ground polymetallic resource of rare earths, zirconium, niobium, hafnium, tantalum and yttrium.

With Australia’s range of deposits, skilled workforce, educated people and the world-renowned Commonwealth Scientific and Industrial Research Organisation (CSIRO), the country is an attractive destination for South Korea to invest in for a stable supply of critical minerals.

This fits with ASM’s strategy to enter a larger market and bring the value into the critical minerals sector that China has enjoyed for so long into Australia.

Similarly with Tory, Woodall says Australia must move towards bringing more downstream processing activities to the country’s shores to unlock the true value of the critical minerals sector.

“When you’re selling a particular rare earth material as an oxide, the oxide market around the world is worth about $US4 billion,” Woodall explains.

“However, once that oxide is converted into a permanent magnet, the magnet industry is valued at closer to $US40 billon and once you begin selling electric vehicles or wind turbines, your operation is part of a $US4 trillion market.

“ASM’s strategy is that we want to be part of that larger $US40 billion market.”

While the Australian Government has been proactive in forming relationships with the United States and India, Woodall urges Australia to take advantage of the market before the opportunity slides.

“Australia has a great opportunity in the market, but the window is only open for a short period of time,” he says. “If we haven’t got a definitive and focussed strategy for the next five years, we may lose that opportunity.

“The next step is providing an alternate, stable, secure and sustainable supply chain in Australia now that it is highlighted how important these metals and materials are to future technologies.”

This feature also appears in the December edition of Australian Mining.

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