The US and Australia are comfortable with critical metals

The global hunt for critical metals needed in innovative technologies and renewable energy is bringing the US and Australia closer, while opening a gap with China.

Two deals in recent days illustrate these points, one involving lithium, a key battery metal, and the other involving rare earths important in a wide variety of applications, including permanent magnets used in wind turbines.

Pilbara Minerals, one of Australia’s most successful lithium miners, has signaled its interest in approaching the US and the investment incentives on offer even as it partners with a Chinese company on an expansion project.

Whether the plan to build a lithium conversion plant with Chinese group Ganfeng Lithium outside of China and use the US government’s Inflation Reduction Act (IRA) can succeed remains to be seen, but Pilbara management believes that it can work.

“For the avoidance of doubt, we are looking at new battery materials outside of China,” Pilbara chief executive Dale Henderson said last week.

“We want to make sure that we are able to take advantage of these new markets that will be developed with the subsidies that the US is offering.”

Anywhere but China

The plan was carefully explained in a headline in Australia’s national business daily, the Australian Financial Review, which read: “Pilbara Minerals considers building lithium processing plant anywhere but China.”

How the Pilbara will structure a joint venture with a Chinese partner and still have access to the incentives offered by the IRA is not yet clear.

The second friendly agreement between Australia and the US is simpler, but involves finding a way to address a decades-long challenge to monetize a unique geological structure rich in rare earths and other critical minerals.

The Export-Import Bank (EXIM), a trade finance arm of the US government, has provided a $600 million letter of interest to Australian Strategic Minerals (ASM) to help finance the final design and development of the Dubbo project in Australia. State of New South Wales.

Following this EXIM announcement came a report that ASM had awarded Bechtel, one of the largest US engineering and construction companies, a contract to provide technical ore processing and infrastructure services.

The combination of a government funding agency and a major engineering firm puts a firm US stamp on the Dubbo project, which has spent 30 years in an appraisal process aimed at finding a way to make a profit from a complex ore.

Bechtel Mining and Metals president Ailie MacAdam described the Dubbo project as globally strategic in the rare earth and critical minerals sector.

The cocktail of minerals Bechtel will deal with in Dubbo includes the highest-value rare-earth neodymium and praseodymium, along with tantalum (used in electronics), niobium (steel hardening), hafnium (nuclear reactor control rods) and zirconium (jet engines and cells hydrogen fuel ).

Finding ways to separate the different metals was the first challenge for ASM with the new test being to find a way to produce materials that customers demand at a competitive price.

Taming Dubbo has been the focus of the Australia-US Critical Minerals Working Group, which aims to harness Australia’s geological advantage to benefit US industry.

Rowena Smith, ASM chief executive, said the Dubbo project was well placed to support the shared goals of Australia and the US