Long Road Ahead Before Australia Can Challenge China for Rare Earths Dominance: Miner

Major hurdles stand in the way for Australia to create an alternative critical mineral supply chain to China, one mining company says.

Australian Strategic Minerals (ASM) says despite the country’s vast mineral reserves, transforming it into operating mines with processing facilities will need to overcome challenges like infrastructure gaps, complex approvals processes, and skills shortages.

Appearing before a parliamentary inquiry on May 19, ASM said it had spent nearly 20 years trying to bring a project in Dubbo, New South Wales online. The project contains rare earths, zirconium, niobium, and hafnium that are important for advanced manufacturing, EVs, and medical technologies.

“Delays, duplication, and uncertainty across planning and environmental approvals can materially impact investment decisions and project timelines,” said Annaliese Eames, chief legal and external officer at ASM, in comments to the House Standing Committee on Primary Industries.

Projects like this also need major investment in roads, rail, ports, power, and water infrastructure.

“Critical minerals projects will only succeed in Australia if they are economically sustainable, environmentally responsible, and supported by the communities in which they operate,” she said. “We’re not just creating mines, we are actually trying to create an entire industry at the same time.”

Building More Than Just Mines

The minerals extracted from Dubbo will be processed in Australia and are then further refined at ASM’s metals facility in South Korea.

Labor MP Mary Aldred Swanson, who chaired the committee, questioned why the company had set up operations in South Korea instead of Australia.

The ASM representative said Australia currently lacks a large EV manufacturing base and the critical mass of customers and businesses to support specialised processing.

ASM explained that as processing moves further downstream, production becomes more specialised and critical mineral miners need to be closer to car manufacturers and customers.

South Korea offers these conditions: established automotive supply chains, talent, and businesses that can buy these materials for use in electric vehicles and other technologies.

“I don’t think this is something that one country, one company can do. I think it requires collaboration across various jurisdictions and various parts of the supply chain,” Eames said.

ASM argued Australia would benefit from stronger coordination between state and federal approval systems, clearer regulatory pathways and more investment in regional infrastructure.

Rare Earth Race Heats Up

Democratic nations have pushed hard to establish critical mineral supply chains independent of China in recent years, largely because of its dominance in the sector—it controls about 70 percent of global processing.

From a risk standpoint, it means any disruption to Chinese trade or refining of critical minerals will have major ramifications for the global manufacturing of smartphones, semiconductors, rechargeable batteries, heavy machinery, and even jet fighters.

Ahead of the 2025 election, Prime Minister Anthony Albanese announced a $1.2 billion Critical Minerals Strategic Reserve aimed at strengthening Australia’s position in the sector. The reserve is expected to begin operating in the second half of 2026.

In October 2025, Australia and the United States agreed to each commit at least US$1 billion (AU$1.41 billion) towards a US$8.5 billion pipeline of priority critical minerals projects across both countries over six months.

Global Prices Likely Controlled by China: Eames

ASM said access to funding remained one of the biggest barriers to Australia.

Unlike commodities such as gold, critical minerals and rare earths do not operate within a global transparent pricing system, making investment decisions more difficult.

“We’re trying to do that in a market at the moment where the market prices are set by China. It’s not transparent; it’s highly likely they’re being manipulated,” the committee was told.

The company also warned about workforce shortages, particularly in technical fields needed to support future projects.

“I think what’s of real concern to us is the diminishing numbers of enrolments across STEM subjects, and specifically mining engineering, geology, things like that,” Eames said.

ASM said maintaining university and TAFE pathways alone would not be enough and called for broader efforts to encourage young people into mining, engineering and resources careers.