Fact Check: Is Australia trying to import rare earth and metal to US as trade deal?

Is Australia Trying to Import Rare Earth and Metal to the US as a Trade Deal?

Introduction

The claim under scrutiny is whether Australia is attempting to import rare earth metals to the United States as part of a trade deal. This assertion arises amidst ongoing discussions about critical minerals and the geopolitical dynamics surrounding their supply, particularly in light of the U.S. desire to reduce reliance on China for these essential materials.

What We Know

1. Australia's Role in Rare Earth Supply: Australia is a significant player in the global rare earth market, supplying around half of the world's lithium and other critical minerals used in various high-tech applications, including electric vehicles and defense systems 1.

2. Recent Developments: In May 2023, Australia received backing from the U.S. for its critical minerals industry, which suggests a collaborative effort to bolster supply chains 1. This support aligns with the U.S. strategy to diversify its sources of rare earth elements, traditionally dominated by China.

3. Investment in Refineries: Australian company Iluka Resources is constructing a refinery in Western Australia, backed by a substantial government loan, to produce rare earth oxides. These materials are crucial for manufacturing high-strength magnets used in electric vehicles and renewable energy technologies 2.

4. U.S.-Australia Partnerships: There have been reports of partnerships forming between U.S. companies and Australian firms, such as USA Rare Earth's agreement with Australian Strategic Materials Ltd., aimed at ensuring a steady supply of rare earth metals from non-Chinese sources 58.

5. Challenges and Rejections: Despite these developments, there are reports indicating that the U.S. has rejected certain critical mineral deals with Australia, complicating the trade dynamics 6. This suggests that while there is interest in collaboration, actual agreements may face significant hurdles.

Analysis

The evidence surrounding Australia's efforts to engage in trade deals involving rare earth metals with the U.S. presents a mixed picture.

• Supporting Evidence: Articles from reputable sources like Reuters and the Sydney Morning Herald highlight Australia's strategic initiatives to enhance its rare earth production capabilities and its importance as a partner for the U.S. in reducing dependency on China 12. These sources are generally reliable, as they are established news organizations with a history of accurate reporting.

• Contradicting Evidence: However, the claim that Australia is actively trying to import rare earths to the U.S. may be misleading. Reports of the U.S. rejecting certain deals 6 indicate that while there is a push for collaboration, the logistics and political will may not align perfectly. This discrepancy raises questions about the feasibility of such trade agreements.

• Source Reliability: The sources cited vary in reliability. For instance, the Reuters article is credible due to its journalistic standards, while the substack article 9 may contain biases as it is an opinion piece and not subject to the same editorial scrutiny. Furthermore, the context provided by the World Bank data 7 offers a broader view of the trade landscape but lacks specific details about current negotiations.

• Potential Conflicts of Interest: Some sources, particularly those affiliated with industry stakeholders, may have vested interests in promoting narratives that favor increased trade or investment in rare earths. This could skew the portrayal of the situation.

What Additional Information Would Be Helpful?

To fully assess the claim, more detailed information would be beneficial, including:

• Specific terms and conditions of any proposed trade deals between Australia and the U.S.
• Insights into the political and economic motivations driving both countries' interests in rare earths.
• Data on the actual quantities of rare earths being traded or planned for trade between the two nations.
• Clarification on the U.S. government's stance regarding tariffs and trade barriers affecting these materials.

Conclusion

Verdict: Mostly True

The claim that Australia is attempting to engage in trade involving rare earth metals with the United States is mostly true, as there is substantial evidence of collaboration and interest from both nations in enhancing their critical minerals supply chains. Key evidence includes Australia's significant role in the global rare earth market, recent U.S. support for Australia's critical minerals industry, and partnerships forming between companies in both countries aimed at securing non-Chinese sources of rare earths.

However, the situation is nuanced. Reports of the U.S. rejecting certain critical mineral deals indicate that while there is a desire for collaboration, actual trade agreements may face significant challenges. This complexity introduces uncertainty regarding the extent and immediacy of any trade deals.

It is important to acknowledge the limitations of the available evidence, as the situation is still evolving and may be influenced by political and economic factors that are not fully transparent. Readers are encouraged to critically evaluate information and consider the broader context of international trade dynamics in the rare earth sector.

Sources

1. Australia wins U.S. support for critical minerals industry. Reuters. Link
2. Rare earth deal with US a magnet for Australia's refineries. Sydney Morning Herald. Link
3. Map shows Australia's rare earth deposits as tariff battle escalates. Newsweek. Link
4. Australia Could Become U.S. Ally In Battle For Critical Minerals With China. Oil Price. Link
5. Breaking Beijing's Grip: U.S. and Australia Unite Against China's Rare Earth Monopoly. Market Analysis. Link
6. US rejects Australia's critical mineral deal. Argus Media. Link
7. Rare-earth metals, scandium and yttrium imports by country - World Bank. Link
8. USA Rare Earth Signs Supply Deal for Rare Earth Metals with Australian Strategic Materials. Energy Tech. Link
9. Bigly Rare: Earth's Yuge Deal - The Chief Brief. Link
10. INTERVIEW: US eyes Australia rare earths partnership amid China sourcing shift. CILive. Link