China has stopped exports to rare land, can Australia intensify?

Australia Prime Minister Anthony Albanese has promised to invest $ 1.2 billion (£ 580 million) in a strategic reserve for critical minerals if he wins the election next month as the trade tensions escalate.

The announcement came after China imposed restrictions on the export of seven rare Earth elements, essential for the production of modern technologies – including electric vehicles, fighters and robots.

China's controls apply to all countries, but have been widely regarded as Revenge of US President President Donald Trump's tariffs.

Albanese said Australia would prioritize minerals that are key to its security and that of its partners, including rare lands. But can his plan dispute China's dominance?

The rare lands are a group of 17 elements – called “rare” because they are known difficult to extract and refine.

Rare lands, such as Samarium and Terbium, are crucial to the production of technology that will shape the world in the coming decades – including electric vehicles and high -advanced weapons systems.

The proposed Albans Reserve includes rare lands, as well as other critical minerals, of which Australia is a top manufacturer – such as lithium and cobalt.

Both China and Australia have rare reserves from Earth. But 90% of the refining of the rare earthly – which makes them usable in technology – is carried out in China, which gives the country considerable control over supply.

And this has frightened Western governments.

Beijing said his restrictions on rare lands are in response to Trump's extensive tariffs on the US Chinese imports at 145%.

But analysts say Washington's inability to provide the delivery of rare lands has become one of the main concerns of the Trump administration, especially since the diplomatic tension with Beijing has deepened.

About 75% of the US imports of rare earthly earthly came from China between 2019 and 2022, according to US geological studies.

Philip Kirchlechner, Director of Studies of Iron ore in Perth, Western Australia, told the BBC that the US and the EU have “missed the ball”, acknowledging the importance of rare lands in recent decades as China has quickly developed a monopoly on refinement.

“China has a foot on the blood vein … of us and European defense systems,” he added.

Elon Musk, CEO of Tesla, this week said China stopping exports to rare lands used in advanced magnets, affects the company's ability to develop humanoid robots, in an early symbol of pain, which Beijing has the right to apply to US companies.

Albanese's proposal says that the minerals in the reserve will be available to both “internal industry and international partners”, in reference to allies such as the United States and the EU.

But Kirchlechner, while welcoming the move as “long overdue”, added that the proposal “would not solve the problem”.

The main point is that even if Australia stocks up more critical minerals, the process of refining rare land will still be largely controlled by China.

Lithium – not a rare land, but a crucial metal in the manufacturing batteries of electric vehicles and solar panels – is a good example. Australia mini 33% of world lithium, but only refines and exports a small faction. China, on the other hand, mini only 23% of lithium in the world, but refines 57% of it, according to the International Energy Agency.

Australia invests in the improvement of the rare lands as part of its future, made in Australia's plan aimed at using critical mineral stocks in the country to manage the green transition.

Arafura Rare Earths, based in Perth, Western Australia, received a $ 840 million funding last year to create the first combined mine and refinery in the country for rare lands. And in November, Australia opened its first plant cultivation plant, also in Western Australia operated by Lynas Rare Earths.

The country is expected to depend on China for refining at least 2026, according to the Center for Strategic and International Studies, based in Washington.

China is trying to take advantage of the instability brought by Trump.

In a series of edits in Australian newspapers, China's ambassador to Canberra lamps Washington's approach to global trade and called on Australia to “join the hands” with Beijing, something Albanese quickly rejected.

Australia advertises its resource industry in its conversations with Trump. Some critical minerals were released from a 10% tariff that he imposed on the import of most Australian products.

But analysts say Albanese's proposal is mainly aimed at protecting Australia and its partners from strategic opponents such as China.

Alicia Garcia-Herero, Chief Economist of the Asia-Pacific Region in Natixis, told the BBC that the Albanese plan was “more complex” than previous proposals, as it included the ability to sell Australia's resources in times of economic tension.

If China imposes export control, she added, Australia can start selling more than its mineral reserves to help the global market prices and loosen the control that China had on prices.

But she said Australia still cannot completely replace China.

“If the purpose of Australia is to serve the West, to become more important to the West – especially in the US – there are weak spots that China can enter – and the most important is refining.”