Factbox: Australia races allies to build critical minerals capacity

Iluka Resources

30/03/2023 22:00

(Repeats FACTBOX published Thursday, no changes to text)
       MELBOURNE, March 30 (Reuters) - Australia, one of the
world's biggest suppliers of critical minerals, is racing with
other western nations to expand beyond mining to ease dependence
on China for materials essential in the battle against climate
change.
    Following are some of the ambitions of major governments to
secure materials essential for batteries and magnets used in a
range of products from mobile phones to electric vehicles and
missiles.
    
    AUSTRALIA
    Australia has just passed a law to set up an A$15 billion 
($10 billion) national reconstruction fund which is expected to
include financial support to the critical minerals sector. 
    It has already released a swathe of low interest loans and
grants that developers of critical minerals projects can access,
as it encourages investment from allies in the growing sector.
    Critical Minerals Facility
    The A$2 billion facility, run by Export Finance Australia,
has offered an A$1.25 billion loan for Iluka Resources  ILU.AX 
to establish the Eneabba Rare Earths Refinery in Western
Australia to produce neodymium, praseodymium, dysprosium and
terbium.
    The facility has also provided loans to graphite producers,
including $40 million to EcoGraf Ltd  EGR.AX  to support the
planned expansion of a battery anode material facility in
Western Australia. 
    Renascor Resources Ltd  RNU.AX  was approved for an A$185
million loan facility to develop the Siviour Graphite project in
South Australia. 
    Northern Australia Infrastructure Facility (NAIF)
    NAIF has offered an A$150 million loan to Arafura Rare
Earths  ARU.AX  to develop its Nolans project, up to A$220
million to help develop Hastings Technology Metals'  HAS.AX 
Yangibana Rare Earths project and A$150 million to Coburn Heavy
Mineral Sands.
    It has also offered an A$125 million loan to lithium
producer Pilbara Minerals to expand production, matched by an
A$125 million loan from Export Finance Australia.
    Australia has signed deals to develop a critical minerals
pathway with the U.S., Japan and South Korea and earlier this
month with India.
    
    U.S.
    The U.S. Government's Inflation Reduction Act (IRA), passed
last August, includes $7 billion of direct subsidies for
projects that support battery production as part of a $369
billion spending package on climate and energy.
    Under the IRA, a new electric vehicle will be eligible for
tax credits when at least 40% of its battery's critical minerals
are extracted or processed from the US or a free trade agreement
partner such as Australia.
    This week it signed a deal with Japan to strengthen their
battery supply chains.
    Australian listed lithium developer Ioneer Ltd  INR.AX  won
a $700 million loan from the U.S. Department of Energy to
develop its Rhyolite Ridge project in Nevada in January. 
    The Department of Defense awarded Australia's Lynas Rare
Earths Ltd  LYC.AX  a $120 million contract to build the first
commercial heavy rare earths (HRE) separation facility in the
U.S. That came after an earlier $30 million contract.
    
    CANADA
    Canada has earmarked up to C$3.8 billion over eight years to
speed up development of a domestic critical metals supply chain.

    EUROPEAN UNION 
    The EU this month released a strategy to build up its
critical minerals access and agreed to start talks with the U.S.
   
($1 = 1.3569 Canadian dollars, 1.4912 Australian dollars)

 (Compiled by Melanie Burton; Editing by Sonali Paul)
 ((melanie.burton@thomsonreuters.com Twitter: @MelanieMetals;
+613 9286 1421; Reuters Messaging:
melanie.burton.thomsonreuters.com@reuters.net))