Australian Mineral Security at Risk: Expert Warns of China’s Stranglehold and US Unreliability
- Australia’s mineral industry is trapped between the US and China, with its economic wellbeing dependent on the latter and defence reliant on the former.
- A new report urges the government to rethink its alliances, prioritizing partnerships with Canada, Japan, and South Korea to break China’s grip on critical minerals.
- The US is seen as an unreliable partner, with its “policy uncertainties” and focus on local processing posing a risk to Australia’s mineral ambitions.
The timing couldn’t be more critical. As Canadian Prime Minister Mark Carney prepares to address the Australian Parliament, a new report is sounding the alarm on Australia’s mineral security. The Australian Strategic Policy Institute is warning that the country’s reliance on the US and China is a recipe for disaster, and it’s time to pivot towards new strategic alliances.
In a landmark speech last month, Carney pronounced the death of the “rules-based order” and argued that medium powers like Australia need to form new allegiances. His words couldn’t be more prescient. The US Supreme Court’s recent decision to strike down the central pillar of Trump’s trade war has exposed the fragility of the US-led global order, and Australia’s mineral industry is caught in the crossfire.
The report, penned by Ian Satchwell, argues that Australia’s faith in the US to partner its global critical minerals ambitions could be a high-risk proposition. With over 67 agreements signed with the US, the EU, and other nations, many of which remain dormant, Satchwell urges the government to “pivot from signing partnerships to fully activating them.” The US, he says, is an important market for some critical minerals, but its policy uncertainties and focus on local processing make it an unreliable partner.
Instead, Satchwell recommends that Australia look north to Japan and South Korea, countries with trusted buyers, deep pockets, and strategic needs for high-volume supply. Canada, he says, should be treated not as a competitor but as a strategic collaborator in shared supply-chain development. The two countries dominate the global mineral supply, and a partnership could prove a game-changer for Australia’s critical minerals industry.
But the elephant in the room is China. The report warns that China’s dominance of the critical minerals supply chain poses an “existential threat” to Australia’s industry. With its stranglehold on refined output, China has the power to shut off supplies to whomever it deems a wayward state, manipulate prices, and drive competitors out of business. Satchwell argues that Australia must diversify its markets, with China likely to remain an “indispensable market for Australian minerals,” but not the only one.
Analysis: What This Means for Australia
The report’s findings have significant implications for Australia’s national security and economic wellbeing. By diversifying its markets and forging new alliances, Australia can reduce its reliance on China and the US, and position itself as a crucial link in a new, diversified supply chain. However, this won’t be an easy path to tread, and will require careful navigation to avoid alienating either of the two great powers.
Security analysts say that Australia’s ability to exert some muscle and create a future for itself in the critical minerals industry is crucial to its national security. With China’s growing dominance of the global supply chain, Australia’s industry is at risk of being squeezed out. By partnering with like-minded nations, Australia can ensure its mineral industry remains a vital player on the global stage.
Industry observers believe that the government must take a proactive approach to addressing the challenges facing the critical minerals industry. This includes investing in local refining and manufacturing, while also pursuing strategic partnerships with fellow suppliers and buyers. Only by taking a holistic approach can Australia hope to break China’s stranglehold on the industry and secure its place as a critical-minerals superpower.