How we can fight China rare metal monopoly: mining boss
Australia and its allies may be forced to embrace market intervention to combat decades of inaction that has led to China dominating critical raw materials, an outgoing mining magnate says.
Lynas Rare Earths chief executive Amanda Lacaze told the National Press Club on Wednesday Australia should train more mining engineers, consider tax credits and push for more sourcing from supply chains outside China.
Such moves could help counter the dominance of China, which has struggled for 30 years to develop a monopoly in the processing of rare earth metals, a group of elements vital to modern high-tech applications.
China’s push to monopolize rare earth processing was given little notice as governments believed in the benefits of globalization, but it has since become clear that some countries will use industrial policy primarily to advance their own national interests.
In 2010, following a territorial dispute over uninhabited islands in the East China Sea, China cut off rare earth supplies to Japanese industry, creating a crisis that resulted in Tokyo financing the development of the Mt Weld mine in Western Australia by Lynas.
But after the crisis passed, China flooded the market with rare metals, driving down prices and driving another miner, US-based Molycorp, into bankruptcy in 2015.
Lynas survived thanks to Japanese support, but his troubles did not end there.
When Ms Lacaze became CEO in 2014, she said the company’s controversial processing plant in Malaysia “frankly wasn’t working”.
“We had limited knowledge of how to fix the plant, a broken balance sheet, little or nothing to sell, difficult relationships with our suppliers and a shareholder record lacking any corporate funding,” he said.
Things were so bad, Ms. Lacaze added, that her husband sometimes asked her why she took the job.
“I’m sick of reading about ‘beleaguered miner’ Lynas; the most cutting part was where we were described as a debt-ridden basket case.
“We could have easily packed up our bats and balls and gone home because it was quite difficult but that’s not Lynas’ style.”
Throughout all this, Japan Australia Rare Earths, a joint venture between Japan’s Sojitz Corp and a state-owned enterprise, provided financing as well as technical and commercial support.
Today, Beijing still dominates the sector, and in 2025 it used it as leverage in its trade war with the US, prompting immediate action from Washington to attempt to create its own rare earth supply chain.
“Our experience shows that being successful in this market is much more complicated than throwing money at the problem,” Ms. Lacaze said. he said.
A long-term perspective is needed to match Beijing’s, he said.
The mining magnate said someone in Washington recently told him they were “really focused on the strategic long term” until the upcoming US midterm elections.
Ms Lacaze said engineering remained a desirable job in China, while universities in Australia were graduating dozens of mining engineers when they used to produce hundreds of mining engineers.
He said tax credits or requirements to purchase from supply chains outside China could help support the industry.
“You cannot stand still… China is already 20 years ahead of us.
“This means we have to work harder, smarter and faster to catch up.”
Ms. Lacaze is retiring in June.
During his 12-year tenure, Lynas’ market capitalization grew from less than $400 million to nearly $19 billion.
In December, it joined the ASX50 index, which represents the country’s largest publicly traded companies.
