- by RJ Harris
- The Guardian
- Issue #2173
Photo: pxhere.com
Western imperialism, aka the rules-based order, is supply chain dependent on its strategic rival China. This is the context for the recently announced increase in state-sponsorship of rare earth element (REE) extraction and processing between USA and Australia.
The two states have announced they are to invest $1 billion USD by end April 2026 with a concomitant mining promotion meeting. Already there is significant state investment in REE and critical minerals activity in Australia, as the private companies who conduct this activity are addicted to public handouts while they post profits in the billions. Nystar cries poor at its Hobart, Tasmania and Port Pirie, South Australia smelters while its parent company Trafigura (Singapore) made $2.8 billion net profit last year.
Reserve Bank Australia (RBA) notes in their Bulletin of October 2025 lithium projects in Australia suffered delays due to a fall in prices last year. The stated intent of the REE announcement is to increase production of REE and flood the market. US President Trump expects the value to fall as their supply greatly increases. This is known as “oversupply.”
The announcement states that the USA and Australia will protect their domestic markets from “non-market policies and unfair trade practices.” They will do this through dumping. This is a major contradiction in the announcement.
“Unfair trade practices for thee but not for me!” Another rules-based order mantra.
This announcement by the United States of America and Australia is an aspirational market signal to increase investment in REE extraction, processing and sale. First there will need to be a large amount of expensive research conducted. During this time activity at existing plants like WA-based, US-owned Alcoa will expand.
REEs are generally produced as by-products of other mining activity. Gallium is a byproduct at Alcoa’s bauxite and alumina mines which threaten Perth’s water supply. Investment into the processing of gallium by states which have agreed in their framework to “accelerate, streamline, or deregulate permitting timelines and processes” will be bad for the workers who have to live with the consequences.
We have form: Australia remains a quarry economy. “Our” resource giants are majority-owned by foreign entities – see the Liquid Natural Gas boom. Albanese’s announcements that we won’t just be “digging things up” but also processing amounts to a green river of radioactive chemicals next to the giant hole.
All of this is desecration of stolen land, otherwise known as the common good of Australia. New sacrifice zones will be created here so Lockheed Martin can manufacture more Precision Strike Missiles, the US government can give them to their friends at the East Mediterranean Sea and Israel can fire them at children.
However, like most of the announcements from the West, this one is heavy on bluster and light on substance. REEs are abundant in their unmined and unprocessed form. Extracting REEs at scale requires not only large and ongoing investment but technical expertise and capabilities. Off-shoring jobs (labour arbitrage) for higher corporate profits (capitalist productivity) has led to a dearth of capabilities. In other words, we sent jobs overseas to save money, so now we don’t have people here who know how to do those jobs. Money supplied to the private sector today will increase share prices and share buybacks. It will not put a new shovel in the dirt, as there is not the capacity to do so.
China is restricting the supply of REEs as leverage over strategic rivals. Gallium is an REE used in advanced warfighting and surveillance systems. China will not grant Lockheed Martin et al. a licence for this REE due to self-interest. This is an obvious conclusion.
Readers will be reminded of when the Waterside Workers’ Federation wouldn’t load military production material on the Dalfram for export to Japanese factories. Then the Australian government was fine with exporting pig iron to a fascist Japan which would soon be using it to make shells. China has no intention of making the same mistake.
