United States President Donald Trump has recently just signed a bill early in August of 2018, dubbed the John S. McCain National Defense Authorization Act, to go into effect immediately, that’ll set an increased budget for the country’s defence expenditure. However, said bill also has a section that will be of interest for people who mine rare earths and make magnets in Brisbane and in other countries thanks to the current political climate.
Section 871 of this new act prohibits the purchasing and subsequent importation of any rare earths magnet from what the US has designated to be prohibited countries, like China, Iran, North Korea and Russia, among others.
Companies in the AU that deal with rare earths and magnets in Brisbane and across the country are seeing this as an opportunity. These companies were already working for accounting for the rare earth quota cut that China set earlier in 2018, so this ban by the US would be a noticeable shift in the market. One such company is Alkane Resources, who sees the situation as a potential boost for its new endeavour, the AU$1.3 billion Dubbo project, as independent supply sources from China become more in demand than ever.
One of the principal uses for rare earth metals are magnets, which are used in a variety of fields across the world like aerospace, automotives, renewable energy and telecommunications, among others. Currently, China produces the majority of the world’s rare earth magnets, around 85%, whilst 90% of the rare earth magnets that the US military uses are made by China. The world’s demand is outstripping supply and experts have predicted that there’ll be a shortfall come 2020.
Prime Minister Turnbull visited the US earlier in 2018, discussing a joint initiative with the US regarding rare earth and high-performance metals.
Nic Earner, Alkane’s Managing Director, the needs of the US for rare earth magnets simply cannot be met without investing in new rare earth endeavours, like it’sDubbo project, which he says is one of the few in the world without any major influence from Chinese investors. The Dubbo Project, which is expected to have a mine life of approximately 7 decades, is ready for construction and is currently awaiting financing.
The nearby Tomingly Gold Mine has diverted some of its AU$60.1 million cash flow for January-June 2018 to the Dubbo Project, and currently Alkane has AU$80 million of reserved cash for the project.