Aust eyeing minerals supply boost to US
Australia has a fresh opportunity to supply the United States with critical minerals after recent changes to US regulations aimed at cutting its dependence on China, an Australian government report says.
President Donald Trump in July signed five memoranda authorising US Department of Defence funding to be directed to resources or technology "essential to the national defense" in a move aimed at shoring up domestic supplies.
That opens the door for the US to offer project funding for rare earths, a group of 17 elements used in products ranging from lasers and military equipment to magnets found in consumer electronics, according to the report by Australia's Trade and Investment Commission issued on Tuesday.
China supplied 80 per cent of the rare earths imported by the US from 2014 to 2017.
"The US government has taken the decision to reduce dependence on China-based supply chains. In the case of purchasing by the US Department of Defense, this policy is now mandatory," the Commission said in a report.
"This has opened a new opportunity for Australian companies to supply a growing US specialist manufacturing industry with the required raw or semi-processed materials."
President Trump and Australian Prime Minister Scott Morrison were due to meet earlier this month to discuss details of an agreement on rare earth supply, according to a senior administration official.
No details of the discussions have since been released.
US reliance on foreign minerals has worried officials since 2010, when China embargoed exports of so-called rare earth minerals to Japan during a diplomatic row.
The issue took on new urgency earlier this year after Chinese officials suggested rare earths and other critical minerals could be used as leverage in the trade war between the world's largest economic powers.
Australia said establishing a consortium between government, defence firms and critical minerals companies to finance new projects via debt and direct investment, as well as arranging supply agreements could help revitalise the US industry.
"The lack of downstream processing capability at scale in the US presents both a challenge and an opportunity for the Australian critical minerals sector," it said.
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