The battle for dominance in the global rare earths market is intensifying, with industry experts pointing to Western Australia (WA) as a potential challenger to China’s overwhelming control.
The International Energy Agency (IEA) estimates that by 2035, China will account for 76 per cent of rare earth refining capacity and 52 per cent of mining operations.
But with geopolitical tensions rising and supply concerns mounting, attention is shifting toward Australia’s capacity to build a competitive, diversified supply chain.
“Western Australia’s leadership in minerals research gives this state a unique opportunity to play a key role in decarbonising the critical minerals supply chain,” WA’s Minister for Mines and Petroleum, David Michael, declared earlier this year.
Michael was speaking after a consortium of academic and industry stakeholders secured an $175,000 grant from the Minerals Research Institute of Western Australia (MRIWA) to explore new methods of extracting and processing rare earth elements (REEs).
The project, led by resource consultancy RSC, brings together Curtin University’s Resources Technology and Critical Minerals Trailblazer, Narryer Metals, Dreadnought Resources, Terrain Minerals, and Pluto Resources.
It will build on earlier work to advance understanding of low-grade, clay-hosted rare earth deposits in WA.
Associate Professor Laurence Dyer, part of the Curtin team, highlighted the complexity of the task.
“The current work aims to build on the characterisation of these deposits – completed in phase one – to work towards developing an economic method of extracting the rare earths,” he explained.
Concerns about supply security surged earlier this year when the Trump administration announced its “Liberation Day” tariffs, prompting China to retaliate with export bans on a selection of rare earths.
With industries worldwide scrambling for alternatives, Australia’s deposits have taken on new strategic weight.
Australia is among the few advanced economies with sizeable rare earth resources.
According to Geoscience Australia, these are spread across diverse geological environments, including alkaline igneous rocks, carbonatites, placer deposits and ion-adsorption clays.
WA, in particular, is regarded as a significant emerging hub.
Some, however, remain doubtful of whether Australia currently has the scale or skills to truly break China’s grip.
Industry leaders argue that progress is already underway.
In May, Lynas Rare Earths announced it had begun dysprosium oxide production at its Malaysian facility.
CEO Amanda Lacaze hailed it as a “significant step for supply chain resilience”, signalling the strategic importance of having a non-Chinese supplier.
Asked whether WA can rival the superpower, Dyer is unequivocal: “Lynas is the largest neodymium/praseodymium producer outside of China with its resource and a significant processing component in WA… The resources are here.”
Lynas’ Mt Weld mine feeds into its WA processing plant, while Iluka Resources’ much-anticipated Eneabba refinery is due online in 2027.
Meanwhile, more than 60 new rare earth deposits have been identified across WA in just the past two years.
Still, Dyer cautioned about the risks, stating: “How much this [Lynas’ Malaysian facility] will be able to expand is dependent on investment and technology development… It [WA] is a very high-cost environment and downstream processing is expensive, particularly to initiate.”
The MRIWA-backed project will focus initially on the Yilgarn region, seeking to establish test facilities, processing methods and purification techniques.
A key challenge lies in managing the chemistry of WA’s rare earth clays. Unlike Chinese ion-adsorption clays, the region’s ores pose tougher extraction hurdles.
“Coupled with scoping leach work to identify appropriate systems, this knowledge will help build toward an effective treatment regime for these ores,” Dyer said.
“This is not something that will happen overnight, but building a process from the bottom up to apply to these materials has the potential to unlock massive resources.”
Given the environmental criticisms often levelled at rare earth mining, sustainability is central to the WA effort.
The MRIWA has said the initiative “aligns with the Cook government’s commitment to environmentally responsible resource development”.
Dyer stresses this point as well: “Chemicals systems, water and waste recycling and management, utilisation of as much of the mined materials as possible such that operation would have the least impact on the environment will be targeted.”
As rivalries between Beijing and Washington escalate, WA’s potential to disrupt the global rare earths landscape is gaining serious international attention.
But for all the ambition, success will take time, investment, and technological breakthroughs.
“The attraction,” Dyer observed, “is the stable, transparent operating environment… as well as the potential to develop supply chains that ease China’s dominance of the market.”
Still, he warns against sacrificing sustainability in the rush to scale up: “As rare earths are key in modern technologies, and in particular energy generation, harsh environmental impacts from producing the elements is a self-defeating enterprise.”
The MRIWA research project is scheduled to run through 2026 – but its outcomes could shape not only Australia’s role in the rare earths sector, but the broader geopolitical balance of critical minerals supply in the years ahead.
