Australia's double bonanza from rare earths

With its reserves, Australia stands to gain from growing global demand and its strategic heft amid efforts to break China's grip on the minerals.

- Jonathan Pearlman For The Straits Times

In the remote Australian town of Eneabba, about 280km north of Perth, is a massive pile of discarded "dirt" from a sand mine that could prove to be one of the country’s most valuable diplomatic assets.

The pile has been building since about 1993, when a worker at the local mining operation decided it would be worth keeping the byproducts from the mineral sands that were being extracted. But it turns out that this collection of dark dirt is not only worth more than A$1 billion (S$860 million) for the mining firm, Iluka Resources, but could also be crucial to Australia’s strategic future.

The pile is estimated to contain about a million tonnes of rare earth minerals such as neodymium, terbium, dysprosium and praseodymium, which are used in the manufacture of electric vehicles, wind turbines, fighter jets, submarines and other defence equipment.

These rare earths face growing global demand, but the supply is almost entirely controlled by China. Currently, China extracts about 70 per cent of the world’s rare earth supply and produces about 91 per cent of the refined materials, according to the International Energy Agency.

China has shown it is quite prepared to exploit its stranglehold over supplies for strategic purposes. In 2010, for instance, it suspended rare earth supplies to Japan over a territorial dispute. More recently, it imposed new export controls in October 2025 amid its trade war with Washington.

As the rivalry between the United States and China has intensified, Washington has led efforts to try to find an alternative, reliable source of rare earths so that it lessens its dependence on supplies from China.

This search has put the spotlight on Australia.