July 14, 2025 • 13 mins
Anthony Albanese’s meeting with Xi Jinping this week is a crucial opportunity to strengthen relations with our biggest trading partner.
But it comes at a time when Australia is trying to break China’s grip on the supply chain of critical minerals.
China’s global domination has been in the works for decades – a grand plan that gives China ready access to materials essential for everything from fighter jets to wind turbines. It also gives Beijing extraordinary leverage over Western economies and defence forces.
Today, columnist for Australian Foreign Affairs Ian Verrender, on China’s long game on critical minerals domination – and the old pile of mining waste in Western Australia which could upend it.
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Guest: Columnist for Australian Foreign Affairs Ian Verrender
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Hi, I'm Daniel James and you're listening to seven Am.
Anthony Albanezi's meeting with Jijing King this week is a
crucial opportunity to strengthen relations with our biggest trading partner,
But it comes at a time when Australia is trying
to break China's grip on the supply chain of critical minerals.
(00:24):
China's global domination has been in the works for decades,
a grand plan that gives China ready access to materials
essential for everything from fighter jets to wind turbines. It
also gives Beijing extraordinary leverage over Western economies and defense forces.
Today columnists for Australian Foreign Affairs Ian Verinder on China's
(00:46):
long game on critical minerals domination from the old pile
of mining waste in Western Australia which could upend it.
It's Tuesday and we keep hearing about China's stranglehold over
(01:08):
the critical mineral supply globally. How did that happen? Can
you take me back to where this story began for them? Look,
it began.
Speaker 2 (01:17):
Way back, you know, more than thirty years ago, really,
And I guess the first inkling that we had that
this was about to take place was a speech that
Den Jhaping gave in around nineteen ninety two on a
tour of China.
Speaker 3 (01:33):
At this crucial point in China's reform and opening up,
Dong Chaoping once again demonstrated that he possessed the political
courage and wisdom needed to guide China along the right path.
Speaker 2 (01:46):
He was never the president, but he was really the
leader of China at the time, and he made this
announcement at a gathering where he said, the Middle East
has oil, China has rare earths.
Speaker 3 (01:58):
His comments were a declaration that projected China's reform and
opening up into a new era and once again placed
China onto the fast track of development.
Speaker 2 (02:12):
And from that point on, China went down this path
of exploiting the rarests that it had, which was a
fairly fast sighted kind of vision for Den, because you know,
rare earths aren't really all at rare. They're scattered right
across the Earth's crust, but they're not usually a needing
form of concentrated way to extract easily. So you know,
(02:38):
mining becomes economic when you've got large quantities enriched like
gold ores or something like that. Whereas rare earths are
just scattered in very very minute quantities across a broad range,
so they're very difficult to mine economically, and then when
it comes to the processing of it, it becomes a
(02:58):
really dirty, difficult tasks. They often run alongside things like
uranium and thorium, which are really quite toxic things to
mine with. So it was an incredible, I guess, vision
to be able to see this and to take advantage
of it to the extent that they've really become absolutely
(03:18):
vital to the modern economy. So the Deng saw that
China had an advantage with rare earths in China, but
what he did was he then insisted that they not
just extract, but they refine and manufacture using those goods
as well.
Speaker 1 (03:36):
So they not only have the minerals, they also have
recognized the power in dominating the processing of those minerals.
So how did they go about monopolizing that.
Speaker 2 (03:45):
The state has not held back in ensuring that it
retains its dominant position, and they've dominated by really quite
overt use of strategies where they they really tend to
manipulate market prices, put all kinds of stress and strains
(04:05):
on competitors, usually through market forces and also by running
propaganda campaigns as well. There's a good example. America really
only had one rare earth's mind. It shut down I
think round about the eighties eye as it was reopened
round about twenty ten, a company called Molly Corp decided
to reopen it. Rare earth prices at that stage were
(04:28):
really very strong. Let's find out what's ahead for Maleycorp
and the rare earth metals market. We have Mark Smith.
He is Maleykorp's chief executive.
Speaker 1 (04:35):
Mark, thanks so much for coming in.
Speaker 2 (04:37):
Good to see you. Finally, by twenty fourteen, Mollycorp had
gone broke and was forced to shut down. Do you
believe that prices are being manipulated by Chinese producers? The
market was suddenly flooded with all kinds of rare earths,
and so Molecorp just could not compete against this.
Speaker 4 (04:56):
Chinese producers have been very clear about two things. They're
going to get continue to restrict the export of these
materials to the rest of the world, and we can
expect an irreversible trend, as they call it, for higher prices.
Speaker 2 (05:08):
The mine has since reopened, by the way, but it
just goes to show that the extent of the power
that China was exerting. Then a few Australian companies have
come under pressure as well. An Australian company called Linus
opened to an operation in Malaysia. Suddenly there was a
(05:28):
propaganda campaign running right through that area of Malaysia talking
about the environmental impacts of the refining process, and it
turns out that it was being run by a Chinese
group called dragon Bridge. This whole propaganda campaign, which incidentally
has been running another propaganda campaign against Linus with its
(05:49):
proposed refining operation in America at the moment. But it
just goes to show that the pressure that China exerts
is firstly against any competitors and then take retaliatory action
against any country or any company that threatens its future
well being. You've seen it in lithium. Lithium prices have
collapsed in the past eighteen months. You've seen it in nickel.
(06:13):
Nickel prices have crashed. China has basically exercised its power
with nickel by pouring vast amounts of money into Indonesia.
Indonesia ten years ago provided around about six percent of
the world's refined nickel and now provides around six percent,
So that's just in a decade, and as a result
(06:33):
Australia's nickel operations have shut down. I mean Andrew Forrest,
who you know, the person behind Fortescue, who's one of
Australia's biggest iron ore miners, spent around three quarters of
a billion dollars just two and a half three years
ago to buy a whole lot of nickel operations in
the West and was forced to close them within a year.
Speaker 1 (06:53):
So as it stands in China has succeeded in fulfilling
ben Jaoping's vision beyond beyond what he could have even imagined.
So how would you describe China's position when it comes
to critical minerals right now?
Speaker 2 (07:06):
Lookause, it's absolutely dominant in the space of critical minerals.
And the domination depends on what part of the rare
earth spectrum you're talking about. I think it's anything from
about seventy percent from the lower end of the rare
earth spectrum up to total domination one hundred percent when
you get what's known as heavy rare earths, so it's
a what's known as a monopsony. It's the big player
(07:28):
it's the elephant in the room when it comes to
this industry.
Speaker 1 (07:34):
Coming up after the break, How a pile of mining
waste in Western Australia could hold the key to upbending
China's stranglehold of the rare earth industry. And why does
it matter if China dominates the rare earth supply chain?
How does that affect us?
Speaker 2 (07:55):
Well, I mean it'll be not just to Australia's advantage,
but to the world's advantage if they're an alternative source,
you know. I mean, at the moment, we're seeing all
these negotiations take place between America and China over trade
and over a range of other areas. What people don't
realize is that America's defense, and particularly it's aerial defense,
(08:16):
the flagship of the defense Fleet, the FA thirty fives,
require huge amounts of these magnets that China manufactures out
of rare earths that only it produces, you know, refined
rare earths. So America's defense is largely dependent upon getting
these components from China. So if there was ever any
(08:36):
kind of conflict between America and China, China really does
send to hold the whipan.
Speaker 1 (08:41):
And you've been reporting on how Australia was trying to
shore up its own supply chains. Can you tell me
about what's been happening in our back western Australia.
Speaker 2 (08:49):
Yeah, look about about thirty years ago as a company
called Aluka. It actually had a different name back then,
but it was a sand miner essentially, and it was
basically getting mineral sands refining them and one of the
byproducts was I think called monozite, which contains rare earths,
(09:10):
and there was a market for it back then and
it was being used i think for fluorescent lights. Suddenly
that market collapsed and nobody knows that I look at
these days who was responsible for it? But someone with
a lot of foresight decided that rather than just dump
all this stuff, they would store it. So they did
this huge pit and started storing all this monozite. But
(09:31):
what's happening there now is that it's building a refinery
that will be capable of refining not just ordinary rear earth,
but what's known as heavy rare earths, which are very
difficult to obtain, elements that are required for super high
end uses in wind turbines, in aviation, and particularly in
(09:52):
defense purposes as well. And so here we have this
Australian company which is now going to have a refinery
which will the only refinery outside of China that can
produce this kind of stuff. In the past few weeks,
in fact, Linus, the other Australian company, has announced that
it is also trying to upgrade its refining processes. Possibly
(10:16):
they've got a couple of little operations in Western Australia
and the big one in Malaysia as well, so it
looks like they're going to try and be beat. I
look it to the punch to seeing who can be
the first refiner outside of China to be able to
compete with the Chinese. Will provide the Western world with
an alternative source. So we will be providing for the
world for the first time a competitive source and an
(10:39):
alternative source of these really valuable minerals.
Speaker 1 (10:43):
So there's clearly advantages to Australia being a bigger player
in the critical mineral space. We know that both Morrison
and Alberanezi governments has been billions backing the Luke and Mine,
So what does it say about how our governments thinking
about this industry.
Speaker 5 (10:56):
We can't just sit back and allow ourselves to be
at the end to global supply chains. We need to
put it simply, we need to make more stuff here.
Speaker 1 (11:06):
That simple.
Speaker 2 (11:07):
So the other and easy government in recent times has
suggested a kind of reserve of these minerals that the
government would stand behind it the industry and buy up
these reserves when the price was low.
Speaker 5 (11:21):
We have some of the world's largest reserves of critical minerals,
and the new strategy will set a vision for the sector.
Speaker 2 (11:30):
And there are some people in the industry who think
that's a great idea. The chief executive of Linus she
thought that it wasn't a terrific guide here at all,
because I think she considered that this might primp profits
at some stage. But the economic benefit is vast. Let's
not kid ourselves there, and so there's an economic incentive
(11:50):
to maintain that power. But the geopolitical advantage of having
domination over some of these things, there's just difficult to
imagine just how significant that is. Because if you have
domination over the components that are required for defense situations, well,
that puts you in an extraordinarily powerful political position as well,
(12:14):
particularly when it comes to negotiating well anything from trade
to defense packs to where you'd think you might be
in the world pecking order.
Speaker 1 (12:26):
And fascinating stuff. Thank you so much for your time, pleasure.
Also in the news, Jim Chalmers says he's pretty relaxed
following the accidental release of advice given to him by
(12:47):
Treasury which advised him to raise taxes and which cast
out on his government's ability to meet their housing targets.
The Treasury conceded the government is not on track to
build one point two million homes over the next five years,
so this doesn't mean they can't cause correct over the
next four years to meet their target. And lawyers for
former Greens candidate Hannah Thomas claims she was punched in
(13:10):
the face by police during an arrest at a pro
Palestinian protest in Sydney. Her lawyers say there is body
worn camera footage showing the violent arrest, which they say
resulted in extensive and serious injuries to her eye and
it's required two rounds of surgery. The thirty five year
old is suing the State of New South Wales and
asking for charges against her to be withdrawn. I'm Daniel James.
(13:32):
This is seven AM. Thanks for listening.
Hi, I'm Daniel James and you're listening to seven Am.
Anthony Albanezi's meeting with Jijing King this week is a
crucial opportunity to strengthen relations with our biggest trading partner,
But it comes at a time when Australia is trying
to break China's grip on the supply chain of critical minerals.
(00:24):
China's global domination has been in the works for decades,
a grand plan that gives China ready access to materials
essential for everything from fighter jets to wind turbines. It
also gives Beijing extraordinary leverage over Western economies and defense forces.
Today columnists for Australian Foreign Affairs Ian Verinder on China's
(00:46):
long game on critical minerals domination from the old pile
of mining waste in Western Australia which could upend it.
It's Tuesday and we keep hearing about China's stranglehold over
(01:08):
the critical mineral supply globally. How did that happen? Can
you take me back to where this story began for them? Look,
it began.
Speaker 2 (01:17):
Way back, you know, more than thirty years ago, really,
And I guess the first inkling that we had that
this was about to take place was a speech that
Den Jhaping gave in around nineteen ninety two on a
tour of China.
Speaker 3 (01:33):
At this crucial point in China's reform and opening up,
Dong Chaoping once again demonstrated that he possessed the political
courage and wisdom needed to guide China along the right path.
Speaker 2 (01:46):
He was never the president, but he was really the
leader of China at the time, and he made this
announcement at a gathering where he said, the Middle East
has oil, China has rare earths.
Speaker 3 (01:58):
His comments were a declaration that projected China's reform and
opening up into a new era and once again placed
China onto the fast track of development.
Speaker 2 (02:12):
And from that point on, China went down this path
of exploiting the rarests that it had, which was a
fairly fast sighted kind of vision for Den, because you know,
rare earths aren't really all at rare. They're scattered right
across the Earth's crust, but they're not usually a needing
form of concentrated way to extract easily. So you know,
(02:38):
mining becomes economic when you've got large quantities enriched like
gold ores or something like that. Whereas rare earths are
just scattered in very very minute quantities across a broad range,
so they're very difficult to mine economically, and then when
it comes to the processing of it, it becomes a
(02:58):
really dirty, difficult tasks. They often run alongside things like
uranium and thorium, which are really quite toxic things to
mine with. So it was an incredible, I guess, vision
to be able to see this and to take advantage
of it to the extent that they've really become absolutely
(03:18):
vital to the modern economy. So the Deng saw that
China had an advantage with rare earths in China, but
what he did was he then insisted that they not
just extract, but they refine and manufacture using those goods
as well.
Speaker 1 (03:36):
So they not only have the minerals, they also have
recognized the power in dominating the processing of those minerals.
So how did they go about monopolizing that.
Speaker 2 (03:45):
The state has not held back in ensuring that it
retains its dominant position, and they've dominated by really quite
overt use of strategies where they they really tend to
manipulate market prices, put all kinds of stress and strains
(04:05):
on competitors, usually through market forces and also by running
propaganda campaigns as well. There's a good example. America really
only had one rare earth's mind. It shut down I
think round about the eighties eye as it was reopened
round about twenty ten, a company called Molly Corp decided
to reopen it. Rare earth prices at that stage were
(04:28):
really very strong. Let's find out what's ahead for Maleycorp
and the rare earth metals market. We have Mark Smith.
He is Maleykorp's chief executive.
Speaker 1 (04:35):
Mark, thanks so much for coming in.
Speaker 2 (04:37):
Good to see you. Finally, by twenty fourteen, Mollycorp had
gone broke and was forced to shut down. Do you
believe that prices are being manipulated by Chinese producers? The
market was suddenly flooded with all kinds of rare earths,
and so Molecorp just could not compete against this.
Speaker 4 (04:56):
Chinese producers have been very clear about two things. They're
going to get continue to restrict the export of these
materials to the rest of the world, and we can
expect an irreversible trend, as they call it, for higher prices.
Speaker 2 (05:08):
The mine has since reopened, by the way, but it
just goes to show that the extent of the power
that China was exerting. Then a few Australian companies have
come under pressure as well. An Australian company called Linus
opened to an operation in Malaysia. Suddenly there was a
(05:28):
propaganda campaign running right through that area of Malaysia talking
about the environmental impacts of the refining process, and it
turns out that it was being run by a Chinese
group called dragon Bridge. This whole propaganda campaign, which incidentally
has been running another propaganda campaign against Linus with its
(05:49):
proposed refining operation in America at the moment. But it
just goes to show that the pressure that China exerts
is firstly against any competitors and then take retaliatory action
against any country or any company that threatens its future
well being. You've seen it in lithium. Lithium prices have
collapsed in the past eighteen months. You've seen it in nickel.
(06:13):
Nickel prices have crashed. China has basically exercised its power
with nickel by pouring vast amounts of money into Indonesia.
Indonesia ten years ago provided around about six percent of
the world's refined nickel and now provides around six percent,
So that's just in a decade, and as a result
(06:33):
Australia's nickel operations have shut down. I mean Andrew Forrest,
who you know, the person behind Fortescue, who's one of
Australia's biggest iron ore miners, spent around three quarters of
a billion dollars just two and a half three years
ago to buy a whole lot of nickel operations in
the West and was forced to close them within a year.
Speaker 1 (06:53):
So as it stands in China has succeeded in fulfilling
ben Jaoping's vision beyond beyond what he could have even imagined.
So how would you describe China's position when it comes
to critical minerals right now?
Speaker 2 (07:06):
Lookause, it's absolutely dominant in the space of critical minerals.
And the domination depends on what part of the rare
earth spectrum you're talking about. I think it's anything from
about seventy percent from the lower end of the rare
earth spectrum up to total domination one hundred percent when
you get what's known as heavy rare earths, so it's
a what's known as a monopsony. It's the big player
(07:28):
it's the elephant in the room when it comes to
this industry.
Speaker 1 (07:34):
Coming up after the break, How a pile of mining
waste in Western Australia could hold the key to upbending
China's stranglehold of the rare earth industry. And why does
it matter if China dominates the rare earth supply chain?
How does that affect us?
Speaker 2 (07:55):
Well, I mean it'll be not just to Australia's advantage,
but to the world's advantage if they're an alternative source,
you know. I mean, at the moment, we're seeing all
these negotiations take place between America and China over trade
and over a range of other areas. What people don't
realize is that America's defense, and particularly it's aerial defense,
(08:16):
the flagship of the defense Fleet, the FA thirty fives,
require huge amounts of these magnets that China manufactures out
of rare earths that only it produces, you know, refined
rare earths. So America's defense is largely dependent upon getting
these components from China. So if there was ever any
(08:36):
kind of conflict between America and China, China really does
send to hold the whipan.
Speaker 1 (08:41):
And you've been reporting on how Australia was trying to
shore up its own supply chains. Can you tell me
about what's been happening in our back western Australia.
Speaker 2 (08:49):
Yeah, look about about thirty years ago as a company
called Aluka. It actually had a different name back then,
but it was a sand miner essentially, and it was
basically getting mineral sands refining them and one of the
byproducts was I think called monozite, which contains rare earths,
(09:10):
and there was a market for it back then and
it was being used i think for fluorescent lights. Suddenly
that market collapsed and nobody knows that I look at
these days who was responsible for it? But someone with
a lot of foresight decided that rather than just dump
all this stuff, they would store it. So they did
this huge pit and started storing all this monozite. But
(09:31):
what's happening there now is that it's building a refinery
that will be capable of refining not just ordinary rear earth,
but what's known as heavy rare earths, which are very
difficult to obtain, elements that are required for super high
end uses in wind turbines, in aviation, and particularly in
(09:52):
defense purposes as well. And so here we have this
Australian company which is now going to have a refinery
which will the only refinery outside of China that can
produce this kind of stuff. In the past few weeks,
in fact, Linus, the other Australian company, has announced that
it is also trying to upgrade its refining processes. Possibly
(10:16):
they've got a couple of little operations in Western Australia
and the big one in Malaysia as well, so it
looks like they're going to try and be beat. I
look it to the punch to seeing who can be
the first refiner outside of China to be able to
compete with the Chinese. Will provide the Western world with
an alternative source. So we will be providing for the
world for the first time a competitive source and an
(10:39):
alternative source of these really valuable minerals.
Speaker 1 (10:43):
So there's clearly advantages to Australia being a bigger player
in the critical mineral space. We know that both Morrison
and Alberanezi governments has been billions backing the Luke and Mine,
So what does it say about how our governments thinking
about this industry.
Speaker 5 (10:56):
We can't just sit back and allow ourselves to be
at the end to global supply chains. We need to
put it simply, we need to make more stuff here.
Speaker 1 (11:06):
That simple.
Speaker 2 (11:07):
So the other and easy government in recent times has
suggested a kind of reserve of these minerals that the
government would stand behind it the industry and buy up
these reserves when the price was low.
Speaker 5 (11:21):
We have some of the world's largest reserves of critical minerals,
and the new strategy will set a vision for the sector.
Speaker 2 (11:30):
And there are some people in the industry who think
that's a great idea. The chief executive of Linus she
thought that it wasn't a terrific guide here at all,
because I think she considered that this might primp profits
at some stage. But the economic benefit is vast. Let's
not kid ourselves there, and so there's an economic incentive
(11:50):
to maintain that power. But the geopolitical advantage of having
domination over some of these things, there's just difficult to
imagine just how significant that is. Because if you have
domination over the components that are required for defense situations, well,
that puts you in an extraordinarily powerful political position as well,
(12:14):
particularly when it comes to negotiating well anything from trade
to defense packs to where you'd think you might be
in the world pecking order.
Speaker 1 (12:26):
And fascinating stuff. Thank you so much for your time, pleasure.
Also in the news, Jim Chalmers says he's pretty relaxed
following the accidental release of advice given to him by
(12:47):
Treasury which advised him to raise taxes and which cast
out on his government's ability to meet their housing targets.
The Treasury conceded the government is not on track to
build one point two million homes over the next five years,
so this doesn't mean they can't cause correct over the
next four years to meet their target. And lawyers for
former Greens candidate Hannah Thomas claims she was punched in
(13:10):
the face by police during an arrest at a pro
Palestinian protest in Sydney. Her lawyers say there is body
worn camera footage showing the violent arrest, which they say
resulted in extensive and serious injuries to her eye and
it's required two rounds of surgery. The thirty five year
old is suing the State of New South Wales and
asking for charges against her to be withdrawn. I'm Daniel James.
(13:32):
This is seven AM. Thanks for listening.
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