RARE EARTH ELEMENTS (REEs)Australian Government Needs to Go ack to Basics to Build an Australian Rare-Earths Industry

By David Uren

Published 9 March 2023

China has moved well beyond an aspiration to monopolize the production of rare earths. It aims for leadership in the production of the full range of goods making use of rare earths—from electric cars to wind turbines, MRI scanners, lasers and rocket motors.

Australia’s ability to make meaningful inroads into the downstream processing and manufacturing of critical minerals is hobbled by the downsizing of the country’s established metals processing industry over the past two decades.

The closure of plants, often under the pressure of Chinese competition, has reduced career opportunities in the technical fields that are needed to build and operate the highly complex processing and manufacturing technologies that many critical minerals require.

Perhaps a pivot moment was BHP’s 1999 decision to shut its Newcastle steel mill and associated rolling plan, concluding it could not compete with much larger and more modern mills in Japan and South Korea.

In 2004, BHP shut its Boodarie clinker plant designed to upgrade iron ore exports and built at a cost of $2.5 billion over the previous eight years. Rio Tinto shut its Hismelt plant, which used innovative technology to produce high-quality pig-iron in 2008, just three years after it had opened.

Bluescope, which purchased BHP’s major steel assets, shut Australia’s only tin mill at Port Kembla in 2006. In 2011, it shut one of its blast furnaces and coke ovens at Port Kembla along with its hot strip mill at Hastings in Western Port Bay. Australia can no longer manufacture stainless steel or tinplate.

The aluminum industry has also been contracting. Alcan closed its Kurri Kurri aluminum smelter in 2012 while Alcoa shut its Point Henry smelter at Geelong in 2014, along with rolling mills both there and at Yennora. Australia no longer has the capacity to manufacture flat aluminum products.

A number of the major metals processing plants that survive are relatively marginal operations, often battling the threat of closure. Australia’s remaining aluminum smelters at Portland in Victoria, Tomago in New South Wales, Boyne Island in Queensland and Bell Bay in Tasmania have all had to overcome challenges to their future over the past decade.

Glencore’s copper smelter at Mt Isa and copper refinery in Townsville both faced closure in 2020 but were given another three years of operation, which expires this year, after the Queensland government provided a subsidy.

The Ravensthorpe nickel processing plant in Western Australia and the Yabulu nickel refinery at Townsville have both battled closure, though Yabulu is expected to gain a new lease of life after being sold to a Swiss concern in December.