According to Australia’s resources minister, Matt Canavan, rare earth mining is now seen as a “national priority.” The country is considering underwriting loans to develop its reserves of critical metals and such as rare earths and is seeking development partners such as the United States.
As we indicated our previous rare earth article the US has now signed an agreement with Australia to collaborate in extracting and processing rare earths. However, to date no state investment has been committed. Commitment from the US and similar countries such as Japan and South Korea is critical. While Lynas is operational and accounts for around 15% of global supply, Australia has identified another 3 advanced-stage projects that require an estimated A$5.7bn in financing to get off the ground.
Nations line up to co-operate with Greenland on rare earths
Meanwhile China has been anything but complacent. After President Trump’s failed bid for Greenland, a Chinese firm is expected to issue an invitation to Greenland this month. According to the agency responsible for Greenland’s mining companies, they have received a number of co-operation invitations various nations including Europe, Canada, Australia and China. However, Chinese companies have been particularly active.
Greenland’s rare earth reserves are significant compared to the rest of the world’s
Greenland is the world’s largest island spanning 2.16 million square kilometers. Most importantly, the country boasts rich resources, including 31 billion barrels of oil reserves in the northeastern part of the island and rare earth oxide reserves which have been estimated at 38.5m tonnes. This compares to the world’s combined rare earth reserves of 120m tonnes.
China has a history of making positive investments in Greenland
It is not unforeeseable that China will be able to conclude a deal with Greenland. Four years ago, a Chinese firm successfully inked an iron ore mining contract with Isaiya iron ore to the value of $2.35bn, the largest mining investment in Greenland’s history. Moreover, in January this year, the China National Nuclear Corporation and Shenghe Resources Holding Co. established a joint venture to process and sell rare earth materials in Greenland. As such, it is foreseeable that China will be able to use its history of positive investments in the region to further entrench itself with the Island. China has already beefed up their bid by promising to expand three major airports in Greenland. If successful, this will only further cement China’s global rare earth advantage.
