Transcript

(This is transcript is partly AI-generated and the information provided may not be entirely error-free). 

David Andrews:  

Welcome to the National Security Podcast. I'm David Andrews, Senior Policy Advisor at the ANU National Security College. Today's podcast is being recorded on the lands of the Ngunnawal and Ngambri people, and I pay my respects to their elders past and present. Today I'm joined by John Marvrogenes and Hayley Channer for a discussion on rare earths and critical minerals. Professor John Marvrogenes is Professor of Economic Geology at ANU, and for the past decade he has focused on the study of Australian rare earth deposits, including hosting the first two national conferences on rare earth deposits they knew, known as RECON. Last year, he received the John Hans Medal from the Geological Society of Australia for lifetime achievement in economic geology research. Hayley Channer is the Director of the Economic Security Program with the United States Studies Centre at the University of Sydney. Hayley has a diverse background, having worked as an Australian government official, ministerial advisor, think tank analyst, and represented global nonprofit organisations. John and Hayley, welcome to the podcast. 

Hayley Channer: 

Thanks, David. 

John Mavrogenes:  

Yeah, thank you.  

David Andrews: 

Just before we get started, I wanted to briefly note for our listeners that NSC is actually running a professional development course on this same topic over 28, excuse me, over 27 and 28 November in partnership with the ANU Research School of Earth Sciences. So hopefully this conversation sparked some interest. And if you would like to have a look at the link in the show notes to enrol, please do so. But now on with the conversation. 

If our listeners have been paying attention to the news recently, they'll no doubt have heard these words, these rare earths and critical minerals, these words are on a high rotation. So, this might be a little over embellished on my part, but to me they have come to almost carry a level of mythic quality. So there's this group of resources that are described as crucial to all the innovations of the future, which are now the subject of international posturing and competition. Again, I'm not sure if this is really an apt analogy, but it seems to bring to mind anyway, these previous years of history where the focus was more on the control of deposits of coal or oil or gas and they were deemed so crucial to economic and strategic power. We're now simply talking about these resources, these rare earths and critical minerals in that same way. So John, to help set the scene for us, I'm not sure if you think those are fair characterisations in the first place, but can you explain for us what exactly we're talking about here? So what are rare earths? What are critical minerals? Are these terms synonymous? How do they differ from strategic minerals? 

John Mavrogenes:  

Yeah, so rare earths are simply a group of elements that goes on the critical mineral list. The reason is very straightforward that the rare earths are a group of elements on the periodic table that are all so similar that they don't get a row on the periodic table, they just get one slot, which is lanthanum. So we refer to them as the lanthanides and they sit in a column with yttrium above actinium and that actinium row is an interesting one because it includes uranium and all the radioactive elements. So in this one column of the periodic table, we get a bunch of elements that act similarly chemically. In fact, they were so hard to discover that it's been only in the last 100 years we've even known about them, and we didn't really know their properties. Critical is defined as by two things. On the x-axis, we plot economic importance, so how much value are they to us? And on the y-axis we plot supply risk. And supply risk simply means are these produced by only one country? And is that country potentially at risk? In other words, could our supply be disrupted? When we do that, we find that many very important things like copper and iron ore plot economically important but very low on the supply risk because there are tens of countries that produce them so that if we had an issue with one country, we wouldn't have to worry about where we get our copper from. We're always going to have a copper supply. We may not have enough of it, but we'll always have a steady supply. On the other hand, when we get into the things we call critical, they plot at the top of this where there is a serious supply risk and the top of the list in every plot are the rare earth elements. Now the rare earth elements are 14 plus two sort of honorary ones. So there's 16 different elements that are all very similar, but they have different industrial uses. So the challenge of rare earths is that when you get one rare earth element, you get them all. And separating them is very chemically difficult. The oddity of them is that there are four of them that we really want. And these four, of course, have crazy names like they all do. Neodymium, Praseodymium and then two others, Dysprosium and Turbium are mainly used in permanent rare earth magnets, and this is what makes them so important to the clean energy transition. If we're going to do this and I sincerely hope we are, then we're going to need a lot of permanent magnets, and the concept is this: that a permanent magnet you can put on a wind turbine and let the wind spin it and it generates electricity which you can store somewhere. And then you put it into a permanent magnet and spin the permanent magnet and it makes the cargo. So EVs and wind turbines are all about the rare earths that go into the permanent magnets that we make. So these are considered critical to the transition. And as we'll get into later, the current problem is that 95 % of all permanent rare earth magnets come from China. And they have set up an industry that's really quite incredible so that they can make them really high quality at really low prices that one of the worries we have is ‘could we ever compete with them?’ Now strategic is a different category that depends on where you are but for defence for sure is the missiles and sophisticated fighter planes need a lot of rare earths in them because they use a lot of these permanent magnets as motors. So these would be high on the list of strategic and critical. And I believe this is why we treat them differently than the other critical metals. For instance, lithium is vitally important to the green transition. And Australia is potentially a huge supplier of lithium to make batteries. The issue is that most of the world's batteries are also made by the same country that makes the permanent rare earth magnets. So this is an issue as well because we need to store the energy if we're going to develop it. So I agree with your analogy that oil and coal and gas were critical 100 years ago and over the last century. We need to get away from them. And the only current replacement for them that we have are lithium and rare earths. And I'll leave it to those two for a while because there many other critical elements we could talk about. 

David Andrews: 

Thanks, thanks. I think that's a very succinct and insightful way of framing it. Now, I think to build on that point, so we do have in Australia what is formally described as the critical minerals list as well as a strategic materials list, and which as you say incorporates this wide array of elements. And so Australia has 31 on our critical minerals list at my account anyway. So it's including things like tungsten, magnesium, lithium, you mentioned, cobalt, nickel and silicon, and five strategic materials, which are aluminium, copper, phosphorus, tin and zinc. But partner governments like in the US or the UK, Japan, India, South Korea and the EU, they've all got their own lists as well. But there's quite varying degrees of commonality between those lists. think there's only so so Japan is quite similar. They've got 28 about 31 are common on their list. And then the low end is 16 on the UK list versus our 31 that are common. So can you tell us any more about the purpose of these lists are and do they tell us anything about how those states view those resource supply chains and vulnerabilities or how they understand these notions of criticality? Is it just that their supply risk is maybe higher or lower than ours versus the economic risk? Is there anything more you can say on that front?  

John Mavrogenes:  

There's plenty I can say on that. For countries like Japan, and the UK, their quandary is that they have very little resources so that they count on importing. We're at the opposite end. I'd say the analogy for us would be Canada, a country that's very rich in mineral resources but doesn't always have the capabilities to develop them. And with many of these things, it's the downstream supply chain issues that are a matter of importance that if we export iron ore, the profits are mainly in the iron ore itself. They make 10 or 20 % addition by making steel out of it. If we just export the lithium and rare earth elements, we'll probably make 10 or 15 % of the potential profits in the end. So from our perspective, the important thing is how can we maximise the economic advantages of having these things rather than just be the quarry for the world? So we have a history of doing that. We typically, we dig it up, we ship it somewhere, they do something with it, we buy it back as product. We've done that for a long time. It works fine for many things. But for instance, copper is put on a list because we're going to need a lot of copper if we're going to electrify. And we do have immense copper resources in Australia, but copper is relatively easy. We can make pure copper at a number of places in the country so that producing the product is not an issue. When we get to the rare earth, separating them is very complicated. And so every element has its own issues. For instance, we potentially have very good tin deposits and that we can make tin metal very easily. Aluminium is an important one. We're a big aluminium producer, but it takes vast amounts of energy. As we shut down our coal fire plants, do we really want to continue making aluminium at the environmental costs of CO2 emissions from burning the coal to do it? These are every element, every metal has its own issues. So it's hard to talk about just one. But for instance, cobalt's on the list because most of our cobalt comes from the Democratic, the DRC, the Democratic Republic of Congo. And there are huge issues there with, you know, with, you know, the blood diamond story. It's not something we should feel good about. Supplying our cobalt and they're an important part of batteries, right? So it's not just lithium. You need a little bit of nickel, a little bit of cobalt, a few other little elements to make the batteries work well and we do have cobalt reserves, but they're in sulphides with nickel and because the nickel price has gone down lately we're probably gonna get out of the nickel business and buy it from Indonesia instead. Which means will depend more for the DRC for cobalt. So every element has its own issues. 

David Andrews:  

I think that sense of global supply chains and the sort of the interaction of these different forces. So it's not just, as you say, it's not just having the ability to extract the resources, but it's then almost to extract them from each other, as well as to sort of to ship them and process them. And there are so many different dimensions to this, which I think when we just talk about them as almost lump them into one whole of mirrors and critical minerals, it's like a neat little package that suggests that it's actually a rather straightforward process when from what you're saying, it's wildly complex. And so all these different downstream effects which at the moment are maybe, if I understand you correctly, sort of slightly consolidated or centralised in China for the most part. Is that a fair description of the current state of affairs?  

John Mavrogenes: 

Yeah, so the rare earths in particular are of interest here because the world leaders in the technologies that were developed with rare earths were Europe and the US. And in the 80s, the US got out of the business, mainly because - I mentioned earlier on the periodic table that the rare earths are sitting just above the radioactive elements, which means all rare earth deposits have some radioactive elements in them, which meant the EPA and the US got very picky about how they deal with particularly thorium. And this became problematic to the miners. So they quit mining rare earths and moved everything to China. China had the foresight to develop an amazing industry and take this business over. We woke up 40 years later and realised that we have no capabilities. There are only two countries outside of China that know how to make a permanent rare earth magnet and those are Japan and Germany. And they make very few because they can buy them cheaper from China. So the rare earths are an outstanding example of… they are both an amazing opportunity to Australia, but also a very scary thing because the abilities to be able to go down the whole supply chain here in Australia were probably lacking in the skills needed to do it. Whereas China is so advanced in this field that it's frightening how good they are at this. On the one hand, if we think of globalisation and what economists told us 40 years ago, just buy it from the cheapest source. There's a great source and we're all addicted to it. Let's just buy these things from China. It's fine. The problem is what if they ever restrict supply, then what are we going to do? And that's the quandary we're in. The same could probably be said for the batteries with the lithium nickel cobalt. Batteries are easier to make than permanent rare earth magnets. So we could develop a battery industry. The question is, do we have the forethought and the, you know, can we stay the distance to do it? China doesn't have to worry about profits in the first 10 years. They can develop an industry and get the profits in the future. If we have industries that can't make money in the first two, three years, they go broke. That's our real problem is we, and even worse, and I probably shouldn't talk about this because I'm just a geologist, but if we had governments that could think 10 or 20 years ahead, I think we could do really well in critical and strategic metals and we could be making batteries and magnets and all kinds of things. But when the three-year cycle of a new government, they'll trash the plans we had to go into this because they're not profitable in the first five years and go to something else. So I don't want to be negative. But it's a big challenge for any country. And I mean the UK, the US, know, France, Germany, Japan, everybody is in the same boat, right? For different reasons. France doesn't have any rare earths or lithium. The UK doesn't. They have some skills that could come to bear here. Japan doesn't have the materials. They import it all. We've got the materials. What should we do with them? 

David Andrews: 

Hayley, think this is a really great opportunity to bring you into the conversation. If we're now starting to talk about these different multilateral initiatives that states have devised to try and address this problem of criticality. So as John says, there's concerns maybe around state capacity and industry and investment. And I'd say we're now seeing a more, it's a highly unique observation on my part, but we're seeing a bigger shift towards industrial policy in a lot of Western governments as we try to sort of regain some of the capacity that was lost over the last few decades as the focus was much more on buy it from the cheapest provider, lowest costs, all this sort of business. And so we've divested it of a lot of state capacity, which we're now trying to bring back in exceptionally high tech, high skill areas where we're starting from a long way behind. So, I think people may well have heard about things like the Future Made in Australia agenda or maybe even the US Inflation Reduction Act. Could you maybe give us a bit of an understanding of what economic measures states are taking to try and address these concerns around rarest and critical minerals? 

Hayley Channer: 

Yes, David, it would be my pleasure to do that. Before I get into that question, can I just reflect on some of the things that John has raised as well? And feel free to cut this or skippers, know, people can skip, but, you know, we're extremely lucky to have someone like John and his brain because all I could imagine while he was talking was, God forbid there is ever a war in future. John will be one of the first people that's captured, like one of the professors and scientists that's captured and whisked away to another country. But I sometimes wonder why it is critical minerals have become such a focal point over only the last couple of years. And there's a number of factors that are responsible for that. One is the push for the clean energy transition, which the US Inflation Reduction Act has expedited and really sped up and accelerated. One of the other reasons is because we realise that China is controlling a lot of these critical technologies that go into defence applications. But also it's just the rise of electronics. I mean, think about 20 years ago, people weren't carrying around mobile phones. And a lot of people might be listening to this podcast on their mobile phone and not realising that what they are holding in their hand contains things that came out of the earth. You your phone might be really shiny and slick and you don't think of all of the raw materials that go into it like copper, lithium, cobalt, manganese, tungsten. So you require, as John said, a lot of different minerals to go into one electronic product. Anything that has a sort of electronic brain will have a semiconductor in it and semiconductors use things like gallium and arsenic and neon. So you need all of these different ingredients and tiny little bits of it to make all of the electronics that we rely on today. And the other issue is the clean energy transition. An electric vehicle will have 200 kilograms of critical minerals in it compared to a normal diesel or petrol engine that will only have about 30 kilos of critical minerals. So for every one EV that you see on the road, that EV has more than 200 kilograms of critical minerals in it. So the huge expansion of the need to mine these, process them and refine and manufacture them, that has increased so quickly in such a short amount of time. And so there's this real global crunch point.  

So to get back to your question about industrial policy. It is extremely complicated. There's so many moving parts to it. You know, on the one hand, we have the critical minerals piece that John was talking about in terms of the huge expansion how you process and extract different critical minerals from the same element. Well, in industrial policy, they're all interconnected and how they work in practice is very complicated. So, as a starting point, the US Inflation Reduction Act, which is about 370 billion US dollars of investment, is meant to crowd in private investment from all over the world into clean energy technologies in the United States, things like batteries and EVs. But the complicated part of the IRA is that it is also stealing some of those resources from other countries. It's such a huge amount of money that it's attracting workers and other investment to the United States and away from countries like Australia. So you see Australian mining companies setting up in the United States instead of in Australia. And it's very difficult, even as a free trade agreement country with the United States, to access some of those credits and incentives. Because what it relies on is, say you're a large company like Tesla or Ford, and you're making EVs. You might be in negotiations with a small Australian mining company, and the tax credits are passed on to your Fords and your Teslas. And it's up to those large companies to pass on the benefits to the Australian mining company. And if they don't pass on that benefit, then the Australian company isn't able to access it. So partly because of that, Australia has a new Climate Change in Critical Minerals Compact with the United States, but it also has Future Made in Australia. And Future Made in Australia was announced earlier in 2024. And it is Australia's own package of incentives to basically help Australian businesses manufacture more batteries. There's money in there for quantum. There's money for solar panels. But there's also a lot of money for critical minerals. So in particular, there's a 10% production tax credit up to $7 billion over 10 years. But the Future Made in Australia Act, although it has passed the House of Representatives, it still hasn't passed the Senate. And the opposition leader, Peter Dutton, says he wouldn't support those tax credits. And in addition to that, those tax credits wouldn't actually come into effect until around 2027. So there is a lot of complex policy around this. There's domestic policy, politics and there's other countries policies that we're also competing with. And it creates a very complicated picture. And then you add into that also minilateral groups. And it is difficult to navigate for both the private sector and, I think, government. 

David Andrews: 

I think there's one zooming to the, I guess the larger multilateral frameworks as well, which we're starting to develop. But I feel like I've noticed the presence of critical minerals and rare earths in the conversation around some of those mini laterals, like you mentioned Hayley. So I think the ones that jumped most to mind for me are AUKUS, where Ken Beasley, the former Australian Opposition Leader, Defence Minister, Ambassador to the United States, Strategy doyenne, has advocated for a third pillar of AUKUS, the Australia, UK, US security agreement, to be focused on rare earths and critical minerals. So Pillar one, submarines, Pillar two, critical and emerging tech, Pillar three, rare earths, critical minerals, which I mean, that's, one can debate it, but it's a prominent figure making a case for its inclusion in probably our newest and most rapidly expanding security partnership. There's also potential utilisation of it through the Quad, for example, which we've just had the Quad Leader’s Summit a week or so ago. In a paper for us at NSC last year, our colleague Jeff Wilson from the Australian Industry Group wrote a paper that was examining the possibilities or potential for the Quad to be used as a framework for managing this. So if we jump back to what we were about earlier with these variations in critical minerals lists between countries and as you say, Hayley, these sort of competing economic and political pressures between states now, even ones that are allies like Australia and the United States, we each still have our fundamental domestic interests. The question is, could you use a group like the Quad potentially to think much as they've done with COVID vaccines and now with cervical cancer? The Cancer Moonshot, thinking about each of them taking on a distinct role within that production chain or within that process, rather than competing against each other at all the different streams of the process. Now, of course, with any of these sort of partnerships, that still relies upon it lasting more than five or 10 years and all the states still wanting to continue with that partnership down the line and everyone will be fighting for who gets the sort of value piece out of that process. Who gets the, the high tech manufacturing part and who just has the mining part. Well, I think we know who's doing the mining part in that particular equation. But beyond those, think there's the other big international grouping that I thought it might be worth talking about is the Mineral Security Partnership, which I think I saw the other day described as the NATO of critical minerals, which was maybe a little bit excessive, but it draws the mind to what we're talking about here in terms of scale and maybe intent. So can you give us a bit more of a rundown? 

Hayley Channer: 

Newspaper editors are great at headlines. 

David Andrews:  

Yeah, and as an Alliance researcher, the NATO of anything always triggers a slight tick in my eye.  

Hayley Channer:  

Hahaha 

David Andrews: 

But what can you tell us about the Mineral Security Partnership? What's that trying to do? 

Hayley Channer:  

Yeah. So David, just on your point about time, I think that was, you know, a very apt point because if you think about how long it takes to get a new mine up and running with regulations and approvals and community engagement and environmental, social and government, governance ESG requirements, you're looking at more than a 10 year period just to get a mine up and running. So your point about time was really important. 

Okay, the Minerals Security Partnership. It is a grouping that started up only about two years ago. There are 14 countries and one group, the EU, that are involved in it. The countries involved in the MSP, there are a lot in the Indo-Pacific like Australia, Japan, Korea, India. There's also the US, UK, Canada, and then a bunch of European countries. And yes, they recently announced this finance network, which I at first thought was a joint fund between the 14 plus EU. I understand now it's not a joint fund, but basically it is bringing together all of the discussions around how do you finance critical minerals projects at every stage from the exploration to the mine, to the processing, to the refining, to the manufacture and end product. And even the, the recycling and recovery of the critical minerals because as if this wasn't complicated enough, you know, when you think about recycling the minerals out of your mobile phone, that's all part of the process. And that also will factor into decades ahead of us when we're actually doing a lot less mining and we're doing a lot more recycling. So you have to factor in things like, you know, you open a mine now and you'll be able to sell that in a, you know, a decade or so, but then the amount you'll be able to sell will reduce over time because companies will be extracting the finished product from electronics, for example. So that's complicated, but this finance network is meant to have all of the governments from the MSP countries invest in projects in the other members and globally. But it also includes governments investing in their own companies. So one of the MSP projects is Australia investing in an Australian mine. So I think there is a lot of building up the MSP to sound a bit larger than it actually is. Right now, it is just a coordination framework, and it is doing good things because we do need coordination. Like you say David, we need countries to work together, maybe like the Quad, maybe for AUKUS. There was a lot in your question. But my gut instinct about anything that's trying to coordinate a large number of countries is you should start small rather than starting large because you need to have habits of cooperation formed and you need to understand the willingness of the government you're working with as well as their private sectors. So what you said about, or what Kim Beasley said about an AUKUS pillar three on critical minerals, I do think it's a good idea. I mean, part of AUKUS will be also investing in all three countries defence industrial bases. And I do think starting small is partly why we have so many mini-laterals that's sort of sprung up in the last 10 years or so. So I think that is a good starting point, but I am also hesitant to continue layering on new activities to existing groupings because I think it spreads officials too thinly. This is the difficult thing is we're in a real crunch point of history where if you think back like, sort of before the 2010s, like before 10 years ago, the decades after the Cold War were all about cooperation. They were about countries trying to cooperate globally in terms of trade, economics, open markets. And it's only in the last sort of 10 years or so that those habits of cooperation are turning more towards competition. And the hard part for us is that even the countries that want to cooperate are competing. So not to sort of, you know, broaden this conversation out too wide, but if you look at when Australia faced economic coercion from China in sort of like from 2020 and that around that period, we couldn't rely on friends and allies to help purchase our products that China wasn't buying because those countries were busy filling the Chinese market demand that, you know, Australia couldn't supply because China wasn't buying from us anymore. For example, Californian wine growers sold more wine to China when Australian wine growers couldn't sell our wine. So even the closest of allies in a sort of economic coercion situation weren't able to cooperate. Because when you live in a democratic country, you are beholden to the people and the companies of that country. And that brings me to another point, which is on nickel, which we talked about before. Indonesia has a lot of nickel that it has produced because of Chinese investment and nickel has flooded the market and is now very cheap and Australian nickel companies have gone out of business as a result. You know, from a geopolitical perspective, it makes sense that Indonesia work with the United States to have US investment in Indonesia so Indonesia can diversify its supply of nickel. But if you're the Australian government, you're in a very difficult position because why would you help Indonesia and invest in Indonesian nickel mines when Australian companies are going out of business? So that is a very complex answer to your very complex question. Next question. Hahaha. 

David Andrews 

Which itself I guess is just one part of an even more complex situation isn't it? John I wanted to pick up on something that Hayley mentioned that I've been considering as well which is this question of recycling and I think when we hear the words rare earths it suggests that we're actually we don't have a lot of them that are either accessible or usable and equally we're expanding rapidly the volumes of them that we need to use in the different technologies that have been developed. Is there a role to play perhaps sort of in the value chain that hasn't been established as much in sort of the recycling or reusing of these assets or is that already quite established or is it not scientifically viable? I'm just not sure.  

John Mavrogenes:  

Yeah, so as Haley said, if we're going to get in the recycling business, we have to have the materials in the first place to recycle. And because we haven't been really in the business of permanent rare earth magnets for decades, there aren't a lot to recycle yet. However, they are recyclable. But the issue is that they tend to react chemically with things around them. So what we do is we coat them in stainless steel. So if you think about a very small rare earth magnet, the size of your pinky, the end of your pinky, these magnets are so strong that you could break your finger getting stuck between two of them. They're amazingly good and they last forever. If you want to recycle that, you've got to get that stainless steel coating off. And so it'd be very expensive. Now let me point out that in your average vehicle now, just a regular normal car that's burning fuel, everything you do in it, your wipers, your changing, adjusting your mirror, your windows, your doors, your back hatch, everything that's a motor, is a permanent rare earth magnet and they're little tiny ones so those are very hard to recycle. However, the giant permanent rare earth magnets we put in the wind turbines, those will be fabulously recyclable so that I would imagine 50 years from now we would be recycling these things routinely. There would be industries all over the world which would mean we could potentially have to mine less material and just recycle. The real quandary is lithium. The lithium batteries which we're going to make billions of over the next decade. At the moment they are not recyclable. The chemistry is too hard. So I hope that within the next few years some smart scientists around the world will develop a way to recycle them because then when you're done with your EV car, rather than put it in landfill, we could take the batteries out, recycle them and we'd have a whole lithium industry there. There are so many challenges to recycling. Hayley brought up one of my favourite topics that I'm always ranting to students about. They all have a phone in their pocket which has 32 different metals in it. They come from at least 25 different mines and some of them are in tiny little wires and little alloys that I don't know how we're going to recycle them. I don't know if we have the capabilities yet to really recycle them properly. I suspect most of them are being thrown out but every metal that goes into your phone has to come from a different place. And one in particular is called tantalum, which is a little capacitor in everyone's phone, which comes from very particular rocks around the world. And some of them are in West Australia and some of them are in deepest, darkest, troubled Africa. So that tantalum is one of those things that we have to think about. We can take the capacitor out of the phone and recycle it. But one of the issues is we don't seem, in the wealthy West, to be that interested in recycling, doing the messy business. If we can get it new, cheaper, why would we bother? Seems to be an attitude. But yes, rare earth magnets in the future, I think, will be routinely recycling. Lithium batteries, we should put a lot of research money into learning how to recycle those. 

David Andrews: 

I suppose a related question. In terms of, we've talked a little bit about the exposure that not just Australia has, but lots of countries have to their relative position in supply and value chains when it comes to rare earths and critical minerals and particularly, Australia has seen firsthand, as Hayley mentioned, sort of the effect of Chinese economic coercion. And I think that quite reasonably drives a lot of the concern that we're seeing from government because we've seen it happen once, so why wouldn't we expect it to happen again under other circumstances with things that may be even more crucial than the goods that were under sanction previously? So is there anything we could do or where do you think would be the best place for Australia to target in this sort of production and value chain to make ourselves more secure? So in the same way that I think when we… this bigger conversation around de-risking, which is, guess, what we've been talking about as well, is that sense of how do states look to minimise their exposure to China, particularly in this space, to minimise that risk of fallout. When everyone's competing for the same space, is there somewhere that maybe Australia is better positioned to step into beyond mining without having to leap all the way to the really high-tech manufacturing stuff? Is there sort of a midpoint that maybe gives us a level of security or stability and some leverage beyond just the pure resources? Is there anything that might fit that category that jumps to mind?  

John Mavrogenes: 

Yeah, I think there's a few options here. In the rare earths, it's so complicated that I firmly believe we need Western partners. We need technological, wealthy Western countries to ally with us. US, UK is a good start. Japan, South Korea are technologically very advanced. These manufacturing countries like Germany, I think we need to be pals with those people and make really fundamental business deals with them where we will share everything, share the risks. At the moment, the rare earths that US is producing and Australia is producing and Africa is producing, they all end up in China, every molecule of them. So that where we've put money into a separation plant in West Australia that we gave money to Aluka and they're planning to build it now. The oxides they will produce at the moment will be shipped to China. So all we're doing is shipping less material to China. So the rare earths is a long-term thing that we're gonna have to think very hard about and have very good partners, but there are other easier ones. I said before that we're not far off being able to make lithium batteries if we make deals with the big Japanese and South Korean, US, European countries to make batteries to their specifics. I think we could get into that within the 5, 10-year frame. That could be very profitable. So that would be one that I would think we'd want to think about. But one of the issues I just might mention here is that it's not that every critical element has its own mineral. And so many of them are byproducts. So for instance, we have some very good zinc deposits in Australia. And within the zinc, there are four critical elements that are there as byproducts. Germanium, gallium, which you've heard of, because six months ago, China started restricting export of them. We thought, hey, we've got germanium, gallium in our zinc deposits, but we don't extract it. We don't extract it because it costs more to get it out than you can sell it for. So whereas China can think long term and say, we don't care what it costs, we're going to sell products with it and we're going to have profits in the end. So again, if we want to get into the germanium gallium business, we're going to have to start using the germanium gallium. You know, every day there's a new one comes up. Antimony is on the list now, right? We've got some great antimony deposits. It's in there with gold and other things that we could be extracting, but at the current prices we don't do it. But it's amazing for these superalloys for fighter planes and things. And it's a flame retardant. It has many things, we could be manufacturing things that use the antimony, the germanium, the gallium, the trace elements that we don't typically think of as a mining product, the byproducts as we call them. So yeah, I think there's a lot of things we could go, paths we could go down that aren't as complex or as financially difficult as getting into the rare earth business.  

David Andrews: 

And Haley, similar question and the final word to you in our conversation today. Casting our mind forward, your mind forward, that is to say, what do you think, what are the key opportunities to your mind that lie ahead for Australia in this space? 

Hayley Channer: 

Yeah, it's a great question because it allows us to focus forward and think about solutions and not just all of the different challenges. I think the starting point is a joint fund. mean, John said we should be sharing everything and I agree. We need to be banding together with other countries because at the moment, if you have any country that dominates anything, it's a risk. It doesn't matter if it's China, it could be any country. If there's one country that's dominating, there's going to be choke points, whether it's geopolitical, whether it's a pandemic, or whether it's some other disruptor. So we do need to diversify. But what it's going to take is it's going to take a lot more political courage of governments to have a bipartisan approach to a particular policy for decades. So, in a similar way to defence being bipartisan for the most part, critical minerals production and refining, etc. that needs to be thought about in the same way. You'll need to get a small group of countries together first. I don't know if that's the quad, but there are already lots of frameworks that exist. But what it will require is that governments actually put money towards it, accept that they're going to lose in some part of the supply chain, but that they're going to gain overall in a smaller grouping and that they're going to have to pay over decades and pay more for products. So, they're going to have to subsidise products to make their companies commercially viable because China has been subsidising its industries for decades. And that's why it is excelling, you know, it, when you have a government that can rule forever, you can make really good policy. And that is one of the things that democracies don't have, especially in Australia, when we have only three year terms. I feel like we're always going to an election. So, you would need to get, you know, this small number of countries together, bipartisan support and a pot of money that they can invest in different projects. Perhaps they also should narrow down to a couple of different critical minerals and just focus on doing those well. But customers will also have to be, know, like government will have to subsidise products so that there is a market for those products because it is very hard to encourage people to spend more money on things that are, you know, ESG compliant because first of all, we're in a cost of living crisis and no one can afford more expensive things even though they would like to do the right thing. And you'll have to kind of build in over time some premium about doing things environmentally well. So look, it's very complicated, but there is a way forward. And I think governments should start small because just coordinating with each other is a major challenge in itself. 

David Andrews: 

I think that sounds like a great place for our policymakers to start. Start small, start achievable and build up from there rather than shooting for the moon and maybe not achieving that endpoint. But Hayley Channer, John Mavrogenes, thank you so much for being with us on the National Security Podcast and I hope to speak with you more again in the future. Yeah, thanks. 

Hayley Channer:  

Thank you, David. Thank you, John. 

John Mavrogenes:  

Yeah, thank you.