Singapore, August 24th (Argus) - At the Agus Australia Key Minerals Forum held in Perth last week, experts attending the event stated that Australia should develop mid-to-lower processing capabilities and achieve supply chain diversification to maintain strategic relevance.
Penelope Stoner, the Chief Corporate Affairs Officer of Arafura Rare Earths, an Australian minerals developer, said during a panel discussion: "Resources alone cannot make a project successful. Resources are not enough; you must have strategic relevance."
The experts pointed out that Australian producers should identify areas where they can create more value domestically and demonstrate competitive commercial capabilities in these supply chain segments.
Stoner said: "We need to go beyond the model of merely exporting concentrates. We need to look at where we can add value. If we can capture these additional values as oxides within Australia instead of just exporting concentrates, it will bring strategic advantages when we supply to the Western world."
Australia is a major source of rare earths, but its development in mining and beneficiation is still higher than downstream separation, metalization, and magnetic material manufacturing. A large amount of Australian rare earth raw materials still need to be sent overseas for processing.
Arafura Company signed a binding purchase terms list with a member of an Indian industrial group's subsidiary, supplying 500 tons of rare earth magnetic material raw materials from its Nolans project annually. The company stated that it will supply the purchaser with praseodymium-nickel oxide (NdPr), dysprosium (Dy), and terbium (Tb) within the initial five-year period and can choose to extend for another two years.
China's Dominance
In 2024, China will account for approximately 90% of global rare earth separation and refining capacity. This has prompted Australia and other Western countries to seek alternative supply chains.
In this context, the experts stated that Australia should focus on its competitive value chain segments rather than attempting to replicate China's complete vertical integration industry.
Australian Strategic Materials' Chief Financial Officer, Stephen Mortram, said that regardless of the scale or the complete vertical integration system established through decades of national investment, China will maintain a dominant position for a long time. However, he added that Australia does not need to pursue a comparable scale and should focus on establishing a reliable alternative supply chain.
Stoner believes that Australia may not need to establish every production segment domestically.
She said: "We don't have an end-to-end manufacturing industry here. This is not our failure. It's specialization in division of labor, and we focus on doing what we do best and supplying products to those markets."
Robert Caruthers, the representative director of the International Lithium Industry Association in Australia, agreed. He believes that Australia should explore opportunities beyond mining in the broader metal industry.
Caruthers said: "I think Australia has the ultimate choice and can decide where to place our raw materials. We need to have the ability to choose how best to create value for Western Australia and the entire Australia."
According to data from the International Energy Agency, if all announced midstream mining and processing projects outside China can be put into operation as scheduled, by 2035, the production of magnetic rare earths mined and refined outside China could almost triple.
Lynas Rare Earths, an Australian producer, mines and processes rare earth ores at Mount Weld in Western Australia and then transports the concentrate to its factory in Malaysia for separation, producing a single rare earth product. This company is the sole global commercial producer of light and heavy rare earth oxides outside China. Lynas plans to build a heavy rare earth separation plant with an annual capacity of 5,000 tons in its Malaysian factory in two phases over the next two years, in order to further expand the scale of its smelting plant.
Lynas began producing separated dysprosium oxide and terbium oxide at its Malaysian factory in May and June 2025, and produced its first batch of samarium oxide in March 2026.
