Australian critical minerals miners battle China price squeeze
Miners say the Australian government wants to become a "circuit breaker" by replicating China's rare earths industry.
What can Australian critical minerals miners do when their biggest competitor, China, drops commodity prices to make them uneconomic?
While commodity market manipulation is not new, it poses a growing concern among the automakers that need critical minerals to build their cars as Australian miners get on their feet.
Rare earths prices were at their lowest since 2020 in July as China increased its supply to the market and demand fell. "If you’ve got 90% market share of magnet processing capacity, there’s a goldilocks price where you earn a return but you don’t encourage anyone in the rest of the world to build capacity," Barrenjoey analyst Dan Morgan told Reuters.
"China has a global influence on pricing and it certainly uses that ability to taper the rest of world development because not everybody is economic [at] $60-$70 a kilo," he added.
Critical minerals miners say the risks involved in long-dated investments to build and develop mines, and then produce the material, mean they often require government support to achieve these milestones.
