Author Identifier (ORCID)
Naoise McDonagh: https://orcid.org/0000-0001-6136-1166
Abstract
China’s dominance over the global supply of processed critical minerals and rare earth elements is well documented, as is its willingness to use such dominance for geopolitical leverage. Beijing has applied export controls to restrict supply on numerous occasions. Recent examples include new restrictions applied to gallium and germanium in 2023, antimony in 2024, and seven rare earths in 2025. This has constrained global supply and elevated spot prices of these metals that serve as critical inputs to advanced industry. The frequency of restrictions is growing, as geoeconomic competition heats up and Beijing turns its mineral dominance into a key tool for responding to strategic pressure from Washington. In effect, critical minerals have become a geostrategic weapon in Beijing’s economic statecraft arsenal, built on a formidable mix of economic scale advantages and industrial policy foresight. In response, governments have developed a splurge of security-of-supply policies, ranging from self-sufficiency, bilateral friend-shoring and mini-lateral efforts to build alternative global supply. Nonetheless, the hurdles to break Beijing’s critical minerals monopoly remain high. But as the geopolitical need grows, opportunity beckons. Australia is laying the grounds to becoming an indispensable supplier of critical minerals to global markets. Key to its success will be the effective transition from a global mining powerhouse to a mining-to-refining powerhouse. Moving downstream into value-add processing is a major challenge in breaking China’s critical minerals dominance. Nonetheless, Canberra has been eyeing a critical minerals processing opportunity since the federal government’s 2019 ‘Australia’s Critical Minerals Strategy’. Canberra’s critical minerals strategy is a departure from Australia’s traditional market-based policy preferences, toward a geoeconomic industrial strategy. In strategic sectors where market advantages are insufficient to compete with state-backed supply, Canberra recognizes the state has a new role to play in market formation. China remains the largest producer of both raw and processed rare earth elements (REEs), has dominant REE pricing power, and remains the largest importer and end user of non-China processed REEs. This paper addresses Canberra’s strategy for positioning Australia as an alternative to China for critical minerals, focusing on rare earth elements, the group of metals indispensable to high-tech manufacturing where Beijing’s dominance is greatest.
Non-Traditional Research Output
Report for External Body
Document Type
Non-Traditional Research Output
Date of Publication
2025
Publisher
Hinrich Foundation
School
School of Business and Law
RAS ID
82284
Copyright
free_to_read
Comments
McDonagh, N. (2025). Australia’s rare earths lie between economic security and liberal markets. Hinrich Foundation.