Australia has extensive deposits of rare earth minerals, but extracting them is difficult, dirty and expensive. Technological innovation and industry support could help push the country to the forefront of this increasingly vital sector.
For nations across the world, an economically secure and technologically advanced future will require critical minerals – and a lot of them.
The Australian government lists 31 critical minerals, defined as “essential to modern and advanced technologies, including computers, heavy industry, defence, and renewable energy”.
Demand for these resources is only expected to grow. The International Energy Agency anticipates a fivefold increase in demand for lithium; graphite and nickel demand is expected to double; demand for cobalt and rare earth elements is predicted to jump at least 50 per cent; while demand for copper grows by almost a third. The Australian and US governments recently announced $1.4 billion to develop critical minerals supply chains.
“Without them, we cannot have a sustainable future,” said Associate Professor Amir Razmjou, leader of the Mineral Recovery Research Centre at Edith Cowan University’s School of Engineering,
“From a security and defence perspective, from an emerging artificial intelligence perspective, and from a sustainability perspective as we move towards a greener, clean-energy economy, we need to have these elements.”
Razmjou’s examples in support of that verdict are numerous. A shift towards electrification and away from fossil fuels requires lithium for batteries. Small-footprint motors used in components for the defence industry incorporate highly effective magnets built with an alloy of a rare earth element named neodymium. Developments in AI and robotics are adding to the demand.
But while Australia has extensive deposits of these resources, they occur in low concentrations, making them difficult and expensive to extract.
The competitiveness loop
“The problem we face in Australia is that we are an expensive jurisdiction and extraction of rare earths and critical minerals is a dirty job,” Razmjou said.
“You have to process a lot of ore to extract those very low concentrations of elements, which is a very energy-intensive process. It’s also a water-intensive process and it produces high carbon emissions.”
Adding to the difficulties are the high costs of labour, energy and transportation, coupled with the country’s strict environmental regulatory framework. Meanwhile, global demand and geopolitical uncertainty are increasing the importance of local supply chains.
“The main issue is the operational capital and operational expenditure for producing these resources,” Razmjou said.
“From a technical perspective, we have good know-how in Australia. We have good research and development and engineering capability. We have the capacity, the infrastructure, and we also have a good financial system underpinned by a stable economy.”
The problem is that Australia’s industry is stuck in what Razmjou calls a “competitiveness loop”. High production costs result in thin profit margins, which limits the size of plants and their production capacity.
Because these plants cannot produce at scale, they cannot optimise their processes, meaning their efficiency and yield is low, locking in higher, uncompetitive prices.
By contrast, competitor nations are better able to absorb costs in the production process or more willing to tolerate environmental damage, helping them to break free from the competitiveness loop and ultimately enhance product quality.
“Governments should subsidise production or help industry in terms of regulatory frameworks or off-take agreements,” Razmjou suggested.
Once government has helped industry turn that negative loop into a positive one, it can withdraw its support while reaping the economic and geopolitical benefits of a sustainable, high-quality critical minerals sector.
Skipping the queue
According to Razmjou, emerging technologies can reduce production cost and environmental impact. He sees two approaches that show potential for improving process of critical minerals and rare earths,
One path would see Australia follow traditional methods that have built up the industry in competitors like China. This involves removing impurities from the raw material one by one until only the target mineral remains.
That path, however, takes time and sets the country on a journey that other nations began 20 to 30 years ago
“The other approach is the innovative, out-of-box, quick project that helps us to get ahead of the crowd,” Razmjou said.
“One technology that potentially can help us is direct mineral extraction technology. For that process we directly extract the target elements, leaving the impurities behind.”
Investing in these emerging technologies, such as direct mineral extraction, offers Australia the chance to bypass existing competitors and leap to the front of the pack in terms of technology development and production capability.
According to Razmjou, stronger industry–research partnerships are key to encouraging investment in these kinds of innovative, low-cost and environmentally sustainable mineral processing technologies.
“The relationships Australian researchers have with industry are not ideal at the moment,” he said.
“We don’t have a well-established framework for commercialisation and intellectual property generation. The university owns what their researchers invent, but universities’ commercialisation vehicles are too weak to make the most of that.”
Governments could ensure resource companies meet environmental goals by supporting industry profitability in other ways while they accelerate production, Razmjou said. The permission process for new critical minerals mines is also too currently protracted to be globally competitive.
From industry, he would like to see greater tolerance for the inherent risk of failure that research and development requires, as well as a stronger venture capital environment to drive funding towards innovative ideas.
“The governments and financial institutions that support these activities need to take more risk,” Razmjou said.
“We need more support in terms of strategic research funds, as well as removing the bureaucratic requirements that hold entrepreneurs down.”
For more information, visit the Mineral Recovery Research Centre website.
