The government pledges cheap funding for Australian rare earths projects
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Great news for rare earths hopefuls — the federal government says Australian critical minerals projects are now eligible for dual funding through Export Finance Australia (EFA) and the $5 billion Northern Australia Infrastructure Facility (NAIF).
As a sector, rare earths have a lot in their favour. Strong and growing demand. A dominant producer — China — with a bad habit of restricting supply, and a global political push to see new projects developed.
Minister for Resources and Northern Australia Matt Canavan says Australian companies will now be able to accelerate new rare earth and critical mineral processing activities in Australia under this new strategy.
“With the increasing global uptake of electric vehicles, smart phones and renewable energy, Australia is well placed to become an international powerhouse to supply critical minerals, and the government is committed to developing world-leading projects which could help supply global markets,” Canavan says.
“We are determined to develop our rare earth and critical mineral assets for the benefit of Australia and our technology-driven industries.
“By allowing proponents to secure financing through both EFA and the NAIF, we are enhancing opportunities for our critical mineral sector.”
A specialised Critical Minerals Facilitation Office will open January 1 next year to help proponents secure investment, financing and market access for critical mineral projects.
The government will also commit $4.5m to fund critical minerals research by key Commonwealth scientific agencies, it says.
This announcement follows a September agreement between Prime Minister Scott Morrison and US President Donald Trump to develop a US-Australia Action Plan for Critical Minerals Cooperation.
Canavan says he will be heading back to the US very soon for a week-long visit to discuss this Action Plan further.
Australia’s sole fully fledged producer of rare earths is Lynas Corp, which is also the only significant producer outside China right now.
“Besides the strong demand growth from our main NdPr customers in Japan, Lynas is receiving increasing interest from magnet buyers in Europe and the USA, seeking long term raw material contracts to secure their supply chain,” the company says in its September quarter report.
Lynas has flagged building a new downstream process plant in WA, either at the Mt Weld mine site or Kalgoorlie.
But these macro events are also putting the spotlight back on a number of Australian rare earths projects vying to get to the starting line. Most of these projects would qualify for cheap finance through NAIF and EFA.
Alongside Alkane’s (ASX:ALK) Dubbo project in NSW are a slew of advanced WA players including Hastings Technology Metals (ASX:HAS), Northern Minerals (ASX:NTU), Sagon Resources (ASX:SG1) and Red Mountain Mining (ASX:RMX), as well as Arafura Resources (ASX:ARU) in the Northern Territory.