US Officials in Talks with Australia to Develop REE Plant

Rare earths are currently used in a variety of technological applications, ranging from permanent magnets in electric vehicle motors and wind turbines to complex smartphone components.

In the latest chapter of the trade war between Beijing and Washington, US officials confirmed they have met with Australian officials about a rare earths project on the island nation.

At a Monday (August 26) US Department of Defense (DOD) press conference, Ellen Lord, the Pentagon’s under secretary of defense for acquisition and sustainment, told reporters the Pentagon has been focused on rare earths for “quite some time,” and is actively looking at securing its supply chain.

“The challenge is really the processing of them and having facilities to do that. Because quite often, China mines them elsewhere and brings them back to China to process them,” said Lord.

Concern over rare earths supply and production appears to be cyclical — rising every five years or so — and this latest tension between China and the US has brought the technology metals back into focus.

Rare earths are currently used in a variety of technological applications, ranging from permanent magnets in electric vehicle motors and wind turbines to the complex smartphone components that allow vibration and audio effects.

That makes it easy to see why securing a robust supply of the materials is crucial for any country looking to expand its communication, transportation and green energy sectors.

Lord addressed the need for the US as well as other industrialized nations to work together to ensure supply is not disrupted or disturbed.

“One, I think, of the highest potential avenues is to work with Australia. When I was in Australia this summer, we had discussions about rare earths and whether or not we could work with Australia to stand up a facility that would take care of our DOD needs, but a variety of other international needs, as well.”

This isn’t the first proposed dual country initiative to hit the rare earths sector in the last few months.

In mid-May, Lynas (ASX:LYC,OTC Pink:LYSCF), the largest rare earths producer outside China, entered into a memorandum of understanding with Texas corporation Blue Line to develop a rare earths separation facility in the US.

Lynas CEO Amanda Lacaze pointed to advantages for both Lynas and the US, as the former would be able to expand its footprint and the latter would be able to have domestic refining capacity.

“This is an exciting opportunity to develop local separation capacity for our customers in the United States and to close a critical supply chain gap for United States manufacturers,” she said.

“We already have an excellent commercial partnership with Blue Line serving key North American customers and we are looking forward to working closely with Blue Line over the next 12 months as we develop this joint venture.”

The need for the US to develop a domestic rare earths sector was also reiterated by Lord during her press conference.

“We’re concerned about any fragility in the supply chain, and especially where an adversary controls the supply,” she told the audience.

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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.

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