The US-China trade war is deepening. In response, Australian miners are diving headfirst into the hunt for commercial opportunity that this geopolitical upheaval may offer. Harvey Kaye of Critical Minerals US helms the effort as executive director. His relatively new company became famous during former President Donald Trump’s administration for using a fast-tracking statute—previously used for infrastructure—to prioritize pipeline development. Most recently, China suspended exports of several key rare earths and critical minerals to the U.S. The implications of this move should deeply concern America’s high-tech industries.
Kaye’s company serves as the environmental foundation for the Stargate nickel processing factory in Indonesia. This newly-built factory, sponsored by China, will mainly produce ferronickel and raw materials for new energy nickel batteries. He suggests that the current geopolitical situation might greatly benefit Australian mining ventures. This is particularly so in the current circumstances of the low level of the Australian dollar.
Implications of China’s Export Bans
China’s just-announced and pending restrictions on exporting some key minerals to the US have alarmed American manufacturers and technology companies. The ban directly undermines America’s defense and electronics industries, as well as renewable energy sectors that all depend on critical minerals. She also emphasized that they are now doing it in broad daylight, pulling out essential provisions. These corrosive factors are poison to our defense, chip manufacturing, satellites, and AI.
Donald Trump has already taken on these challenges with the issuance of executive orders. These orders are primarily focused on reducing red tape and expediting the mining approval process. Kaye said he was excited about the potential of a further influx of government funding to kickstart more processing projects in Australia. This would serve to significantly bolster US Critical Minerals. Secondly, it creates opportunities for Australian companies looking to establish a greater presence in critical mineral production.
Kaye unpacked what’s happening behind the scenes. She continued, “We can do it in half the time with the approval from a couple of years down to 12-14 months by utilizing small mining exemptions, categorical exemptions and the Defence Production Act. Most importantly, he believes that US federal government funding will play a critical role in getting these projects funded. This idea encourages his optimism and cements Australia’s deepened role in supplying critical minerals.
Australia’s Position in Mineral Production
Professor Vlado Vivoda, a specialist in resource economics, noted Australia’s mineral production competitive advantage. He stated, “Our reserves of lithium, nickel, cobalt are number two in the world, the same for copper; we’re fourth for rare earths.” This abundance makes Australia an ideal partner to help meet the world’s growing appetite for these vital building blocks of our economy.
Vivoda acknowledges that the landscape is increasingly complicated by rising trade tensions with China which have resulted in bans on Australian coal, barley, seafood, wine and beef. He thinks they might create opportunities for Australian mining companies. He noted that China has been Australia’s number one trading partner for decades. Yet this strain in their partnership may create pathways to new market opportunities.
Vivoda stressed the urgent need for targeted action to protect strategic mines that are key to national security. Yet, their market isn’t free on the international front. So we need to be smart in how we intervene to save the mines that are deemed critical or strategic.
Potential for Economic Growth
Today, the mining sector is an economic powerhouse, producing more than $450 billion in export revenue each year, making it a foundation of Australia’s economy. The majority of this revenue—92 percent—comes from iron ore and coal. Now, Australian companies are poised to capitalize on that opportunity as the global demand for critical minerals escalates.
In these circumstances the possible truth of Kaye’s claim that a low Australian dollar increases the attractiveness of local mining ventures hits home. “Our Aussie dollar is so low, we’re so attractive still,” Kaye explained. He added that worries about tariffs have long since passed in conversations with investors.
In addition to this Kaye announced the continuing talks with banks including the Export-Import Bank to promote bilateral trade finance initiatives. We are in direct dialogue as we speak with the [Export-Import] bank to promote trade both ways.
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