Two Chinese companies have been blocked from investing in valuable Australia rare earth mineral sector in the past week.
It comes in the middle tightening foreign investment rules during a virus outbreak and in line with the ongoing federal government partnership with the United States to ensure rare earth supply chains are safe and not dominated by China.
On April 20, Treasurer Josh Frydenberg blocking offer by Baogang Group Investments to invest $ 20 million (US $ 12.8 million) in North Minerals that operates a major rare earth project in Western Australia (WA).
The China Group is a subsidiary of the state-owned company Baogang (or Baotou) Group, which manages the Bayan Obo Mining District in Inner Mongolia – the largest rare earth deposit in the world.
Northern Minerals operates the Browns Range Project, which covers a large area of 3,595 square kilometers (1,388 square miles) in the Kimberley East region which stretches across the WA border and the Northern Territory.
This site is rich in rare earths, especially dysprosium – an element that is mainly used in magnets for electric vehicles and wind turbines.
The company’s website praises the Browns Range as only non-Chinese producers from dysprosium.
On April 24, Yibin Tianyi’s Lithium Industry withdrew the proposed investment after the suggestion would be rejected by the federal government.
One of Yibin’s supporters is the biggest in China lithiumbattery manufacturer-ion Contemporary Amperex Technology.
Yibin aims to invest $ 14.1 million (US $ 9 million) in AVZ Minerals, which operates The Manono Project in the Democratic Republic of the Congo. This project is a major producer of lithium.
According to a a statement from AVZ Minerals, the federal government advised Yibin that the investment would be “contrary to national interests” and against the growth of “Australia’s critical mineral sector.”
Yibin and AVZ are currently looking for alternative ways to work together.
Rare earth is 17 metal elements that are important for the manufacture of 200 high-tech products, including smartphones and fiber optic cables.
David Wilcox, board member of Central American Nickel, to The Epoch Times that many technology industries are bound to the Chinese communist regime because of their control over these vital metals.
“Erbium. This is the key to developing fiber optic cables which is the key to developing 5G networks,” he said. “So if we start there initially, Huawei might lose the battle, but China won the war because China has 100 percent control around erbium market. “
Late last year, the governments of Australia and the US formalize the agreement to start exchanging information about potential resources in each country, and to develop pathways for supply management.
In 2018, the Chinese communist regime produce 70 percent rare earth minerals in the world. The dominance of the sector’s regime has come under the supervision of in recent years because it has used its market power to uphold its geopolitical interests.
In 2010, the regime cut off rare earth exports to Japan following a dispute in the Senkaku Islands.
During the U.S. trade war China, the state media outlet of China People’s Daily runs an editorial in May 2019: “Will the rare earth be a weapon of retaliation for China to retaliate against pressure from the United States for no reason at all? The answer is not a mystery. “
To deal with future risks, the Australian government has actively developed its rare earth sector.
“Australia is taking the opportunity to become a powerhouse for the production of critical minerals and rare earth,” based on Minister of Resources and Northern Australia Matt Canavan.