The pond had wondered when the reptiles would get into the rare earths game, and help Gina get even more filthy rich, and, belatedly, the answer came today ...
A full three reptiles - count 'em, 3 - were required on the "news" side ... (the pond uses the word loosely)
Critical rare earth minerals risk: US digs into China trade
The Trump administration plans to buy into Australian rare earths projects as China’s dominance over critical minerals sparks fresh tensions between global powers.
By Brad Thompson, Ben Packham and Joe Kelly
The yarn, as at the archive link above, began with one of those inimitable collage indications of the complete failure of the reptile graphics department ...
Remarkably Gina only got a mention right at the very end ...
“China buys 90 per cent of our lithium, for example. And the problem is that the US, Japan and others don’t come close to that. The US is trying to ramp up its purchasing but in the meantime, China will dominate offtake.”
Ms Channer said Australia was “stuck between a rock and a hard place”. “The US wants a coalition of countries to put tariffs on Chinese products with Chinese-sourced and processed minerals. But, at the same time, the US is still considering tariffing Australian goods under 232 national security tariffs.”
Gina Rinehart-backed Arafura and others are likely to welcome direct US investment, particularly in light of Australia’s crackdown on Chinese entities buying into the rare earths sector.
The flare up in the US-China trade war comes ahead of the APEC leaders’ summit in South Korea at the end of the month where Mr Trump and his Chinese counterpart Xi Jinping are expected to have their first in-person meeting since 2019.
Mr Bessent, who met with the US President on Tuesday night local time, said he still expected the meeting to proceed.
The pond turned to Rowan, rowing away on the extreme far right of the lizard Oz, to see if he could make some sense of it all ...
Should we sell off the farm, or at least Gina's mines, to King Donald?
The header: Xi’s big gamble on rare earths can set Australia up as a winner, Australia – which has mostly watched from the sidelines during previous rounds of this economic war – now finds itself with a potentially major role.
The caption: President Donald Trump shakes hands with China's President Xi Jinping during a meeting on the sidelines of the G-20 summit in Osaka, Japan, June 29, 2019.
Sad to say, the pond didn't emerge much wiser by the end:
In 1992, Deng Xiaoping said presciently: “The Middle East has oil, China has rare earths.”
Beijing is now insisting on approving the export, from anywhere in the world, of any product – chiefly rare earth magnets and semiconductor materials – that contains as little as 0.1 per cent metals originating in China. This carries the implied threat of losing access to Chinese rare earth components. The Chinese Commerce Ministry says that from December 1, all such producers must provide it with technical drawings of every product, with full documentation in Chinese language, and gain its permission for the relevant sales.
Australia – which has mostly watched from the sidelines during previous rounds of this economic war – now finds itself with a potentially major role. If we play our cards well, we might extract a glittering prize: a central role in providing the future-facing metals that might form a chapter in a new edition of Geoffrey Blainey’s famous history of Australian mining, The Rush That Never Ended.
The Blainers reference was appreciated, as the reptiles inserted an obligatory snap of US President Donald Trump walks toward the East Room of the White House.
On with Rowan:
Industry website Rare Earth Exchanges says that these 17 metals vital for the magnets required by electric vehicles, wind turbines, advanced electronics and modern defence systems “have become a cornerstone of geopolitical and economic power”.
And Australia contains a wide range of these rare earths.
Xi has also announced new export controls on high-performance lithium-ion batteries, used in EVs, energy storage and strategic weapons. Drones, for instance, require both magnets and batteries. Beijing controls 69 per cent of rare earth mining, 90 per cent of processing and about 75 per cent of global lithium-ion battery output.
This amounts to casting an extraordinary net for the intellectual property of almost the entire world’s new-tech output, though how or whether these requirements can be policed remain key questions. It attempts to replicate measures Washington has itself attempted to impose to restrict semiconductor exports to China.
In the past few years, as magnet and battery materials have soared in importance, they have not always soared commensurately in price. China has used its market domination and its political cohesion to drive down prices in waves, then moving at the bottom of such cycles to buy key stakes in relevant foreign, including Australian, companies.
Say what, is Rowan committing a reptile heresy, suggesting that EVs and batteries and Satanic solar and whale-killing windmills to fuel the batteries, have "soared in importance"?
The pond thought of stripping Rowan of his reptile commentary card, especially as the reptiles offered an AV distraction suggesting more soaring ... AMEC CEO Warren Pearce discusses the ongoing US-China trade war and the Trump administration calling on its allies to “decouple” from China. “We can be their provider outside of China for rare earths and critical minerals,” Mr Pearce told Sky News Australia. “They are starting to think the same way.”
What a grand dig, as Rowan saw a way for King Donald to take charge ...
But China has already positioned itself at the heart of the Internet of Things – of all items that are embedded with sensors and software that are responsive online, and are potentially “actionable” at the behest of their creator.
Xi is betting heavily on rushing to cement and extend its control of this whole sector by a panoply of measures including subsidies.
And to date, most of Australia’s output has been shipped directly to China. But the US has the capacity to use, in response, Section 232 of the 1962 Trade Expansion Act, that provides for reductions or exemptions in tariffs on national security grounds. As tariffs steadily rise, special deals can be made for key items from friendly powers such as Australia, that would help create price signals, stabilising markets.
Rare earths control first rang alarm bells 15 years ago when China banned for a time their export to Japan. That has resulted in many meetings and harried hand-wringing. International leaders have talked up the need for alternative sources, but with scant success. So far. Partly propelled by the patent ambition of Xi’s dice-rolling, alternative supply chains appear, at last, to be on the way. That means, inevitably, a shift towards formerly abandoned industry policy – including, here, the Albanese government’s Future Made in Australia.
Can former Chairman Rudd save us? Australian Prime Minister Anthony Albanese and Australian Ambassador to the United States Kevin Rudd.
Nah, not really, as Rowan turned political:
The US is of course the crucial market. And our ambassador, Kevin Rudd, is developing strategies to realise our potential through the creation of new supply chains. He recently helped organise a delegation from 20 Australian companies with the potential to become key links in such chains, who participated this month in meetings with top US policymakers. So much is at stake here. Timing is everything – we’re in a race before Beijing can grab full control. China aims to leverage its rare earths dominance to own future hi-tech and green technologies.
The answer to such an ominous authoritarian monopoly features Australia, prominently, if we take the right steps.
Rowan Callick is an industry fellow at Griffith University’s Asia Institute, and an expert associate at the ANU’s National Security College.
What a relief. It seems we can avoid "one ominous authoritarian monopoly", one where the President's enemies fall out of windows, by getting into bed with another "ominous authoritarian monopoly"... one where comedians are routinely cancelled and the President's enemies are hauled off before the courts, hopefully to spend some time in the clink...
Cue the infallible Pope of the day, saved especially for this late arvo post ...
As always, it's in the detail, with King Donald seemingly lost in a re-boot of Fallout, or perhaps a sequel to The Book of Eli ...
And so to Will, coming at the same story from a slightly different angle:
The header: Enough grumbling, the West has to fix this China problem, Australia faces a delicate balancing act as US Treasury Secretary pushes for economic decoupling from China ahead of Albanese’s crucial Washington visit.
The caption for the unfortunate snap of an unfortunate man: US Treasury Secretary Scott Bessent. Picture: AFP
The last the pond had thought about Scottie B. was in relation to Argentina, as featured in the Fortune story, Scott Bessent working on another $20 billion of Argentina financing with private banks, sovereign funds, ‘more focused on the debt market’.
40 billion smackeroos in bail-out money for Killer-approved economic management!
Excellent, just the sort of stout-hearted, lip-puckered fellow we need to fix the Australian economy...
Martín Lousteau, president of the centrist Radical Civic Union, said “Trump doesn’t want to help a country — he only wants to save Milei,” and that “nothing good can come of this.”
At this point the pond should add a house keeping note.
For some obscure reason, the reptiles only offered Will that opening snap. There were no other distractions, not snaps nor AV extracted from Sky Noise.
So Will had to be downed straight, no chaser:
That took place all of a fortnight ago. Anthony Albanese, you will remember, even weighed in, asking for China to let the market ”operate properly”.
The Trump administration is not going to find any supporters in the Albanese government to join an allied effort to decouple from China, as canvassed by Treasury Secretary Scott Bessent overnight.
Had Peter Dutton won the May election, his Coalition would not be supporting such a policy either. Let’s not forget, he went into that campaign pledging to double Australia’s trade with China.
Decoupling from China would be economic suicide for Australia.
For all its well known difficulties, China buys more from Australia than our next five markets combined.
Australia’s $100bn iron ore trade with China alone accounts for one-fifth of our exports to the entire world.
It is a co-decency* that makes both Canberra and Beijing uneasy, but economic complementaries have linked the two.
(* sic, so and thus. Did Will mean co-dependency? As in Codependency is a dysfunctional relationship dynamic where one person assumes the role of “the giver,” sacrificing their own needs and well-being for the sake of the other, “the taker.” Psychology Today
Who knows, the pond thought the Chinese were takers, but they were also givers, and while Australia was also a Gina-style giver, we were also a Gina-style taker of cash in the paw ...)
Apologies for the detour, as Will carried on...
It is no insight to point out that tension, but managing it is the perennial task of Australian foreign policy.
To be fair to Bessent, even he spoke of decoupling as a last resort. “The world does not want to decouple. We want to de-risk. But signals like this are signs of decoupling, which we don’t believe China wants,” he said.
So what should the Prime Minister do, as he prepares to travel to Washington next week for his much anticipated first formal meeting with Donald Trump?
America’s current outrage about China’s decades-long efforts to establish dominance of the world’s rare earths trade certainly creates opportunities for Australia.
Albanese will find a White House eager to demonstrate it can create a non-Chinese rare earths supply chain. That’s a happy backdrop as Mr Albanese seeks American investment for Australian miners.
It should also help the Prime Minister as he seeks support from Trump for the AUKUS agreement. After all, the worst affected by Beijing’s sweeping new rare earths restrictions are America’s weapons manufacturers. Is the American President really going to renege on a China-focused defence technology partnership as he and his officials huff about Xi Jinping’s rare earths attack?
Or maybe a taker, as Will carried on ...
Tool to ‘strangle’ US
The view from China is of an entitled America having a tantrum after not getting what it wanted.
Across the Chinese internet, commentators are cheering on the Chinese President’s tough guy approach and revelling in the public upset of the Trump administration. The mood is much the same in the real world.
There is widespread glee about Bessent’s declaration that, in the face of Chinese dominance, America would have to increase its own industrial policy.
To Chinese ears, that sounds a lot like an admission that China’s command and control system has triumphed over America’s capitalist model.
“If China cuts off its rare earth supply, the US will halt F-35 fighter production in as little as six months,” declared one influencer in a widely shared piece.
“The ‘rare earth’ card is truly a ‘trump card’. It allows China to strangle the US,” the influencer continued.
Best of all, Chinese experts believe their country is decades ahead of America in the industry.
It is easy to dismiss all of this as Chinese boosterism, but I would caution against that. I am writing this after a reporting trip to Ganzhou, the world’s heavy rare earths capital, in the Chinese province of Jiangxi.
I will be writing more about the rude health of China’s secretive rare earths industry in The Australian in the coming days, but for now I’ll just share a key takeaway: China intends to dominate this trade for decades to come.
The investment in upgrading the industry I have seen in Ganzhou this week is either stunning or terrifying, depending on what passport you carry.
As America has been speaking about co-ordinating with its allies to create a non-China supply chain, Chinese cranes are building new processing plants and centres of excellence for the world’s leading rare earths researchers.
Perhaps the most troubling part of the White House’s response is the claim of surprise. For Canberra, which has such a huge stake in a competent America, that’s a great worry.
Trump and his officials are claiming to have been taken entirely off guard by Beijing’s new regime.
This despite China’s success in using chokeholds against America all year (not to mention the country’s decades-long effort to establish its dominance of the industry).
Suggestions by Bessent and US Trade Representative Jamieson Greer that perhaps it was the work of a rogue, “disrespectful” official in Xi’s Leninist machine are absurd.
Canberra will hope that was an attempt at mind games with Xi rather than sloppy analysis from the Trump administration.
There is nothing magical about China’s rare earths dominance. It should not be beyond America and its allies and partners to create an alternative supply chain.
There is an obvious role for Australia to play in this, but to have any useful effect it will need to be part of a bigger American-led effort – one with a clear strategy, close co-ordination and patience.
Troublingly for Australia and other American allies, that’s not a trifecta many would use to describe the first nine months of Trump’s second “America first” experiment.
But enough grumbling. The essential task now is fixing this problem, not complaining about it.
What a relief. Once again, it seems we can avoid "one ominous authoritarian monopoly" by getting into bed with another "ominous authoritarian monopoly"...
Add Bolton to the list, and in that spirit, the pond closes with the immortal Rowe ...
Rowe really does catch the likeness of the reptiles' preferred carriage ...
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