US, Japan, Australian firms partner to challenge China’s dominance of rare earth market

31-Jul-2019 Intellasia | Taiwan News | 6:34 AM Print This Post

As the U.S.-China trade war continues to simmer, China has until now remained secure in the fact that it is the world’s primary supplier of rare earth minerals crucial for manufacturing in the rapidly-expanding telecommunications industry.

However, that may be about to change, as the U.S. and Japan are courting an Australian company, Lynas Corp., in an effort to undermine China’s dominance of the rare earth market. Many reports are referring to the new partnerships in the private industry as a “three-nation alliance” to challenge China’s dominance.

The Japan-based Nikkei Asian Review reported on July 29 that companies in Japan and the U.S. are making new deals with Lynas to expand the Australian company’s global profile, with at least one new mineral separation facility being planned in Texas with U.S. company Blue Line.

Although the company mines materials in Australia, Lynas operates its headquarters and refining facility in Kuantan, Malaysia and has primarily served Australia, Malaysia, and Singapore. According to the report, China accounts for 85 percent of the global rare earth minerals market, while Lynas accounts for the remaining 15 percent. That discrepancy is likely to decrease significantly once operations at the new facility in Texas begin in 2021, reports the Edge Markets.

 (Taiwan News)

(Taiwan News)

On the Japan side, the island country has been Lynas’ largest customer since 2010, when China began restricting the supply of rare earth materials to Japan after Tokyo nationalized the Diaoyu Islands (Japanese – Senkaku Islands). Lynas currently supplies Japan with about 30 percent of its total rare earth imports.

Many are looking at the partnerships with Lynas as a complementary alliance which parallels the regional security arrangement between the U.S., Australia, and Japan. As all three work towards maintaining peace in the Indo-Pacific in the face of an increasingly belligerent China, private interests in these three countries are also working together to ensure that the manufacturing supply chain for essential high-tech products cannot be entirely dominated by the communist government in Beijing.



Category: China

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