When Australia and India signed a strategic partnership in June, we knew it was “about China” but we did not know was just how much it was about China.
Now we find that the strategic partnership allows for Australia to supply “rare earth” resources to India.
Why is this so strategically important?
Your phone, camera or electric car are completely dependent on key “rare earth” minerals that are processed only in China.
Only a year or so ago, this dependence on China seemed to be OK. Now nations are not so sure, and the Japan, India and Australia collaboration on supply chains is just one of many responses.
Here is how vital these “rare earth” minerals are – there are 0.15 grams of palladium in an iPhone, 472 kilograms of combined rare earths in an F35 fighter jet and four tonnes in a Virginia-class submarine.
But the big one in this group is graphite – it is a key for the lithium-ion batteries in phones, laptops, military and medical equipment and electric cars.
China provides 70 per cent of the world’s exports of graphite and has declared it a “strategic material”.
Graphite illustrates the scale of the world’s dependence on China and you can see how global concerns have now become a mix of commerce and defence. Graphite is in demand because it is the most electrically conductive mineral known.
Australian Resources Minister Keith Pitt expressed the global concerns this way: “It does not matter if you are importing loaves of bread or anything else, if you only have one supply line, that is an increased risk.”
Graphite and other “rare earth” minerals are far from being loaves of bread, for they hold the key to making most of our digital economies and defences work. Australia has lots of graphite – there is one graphite reserve in South Australia of 200 million tonnes.
In addition to the deal with India, Australia has recently announced several deals in the US and there could be more to come.
No wonder the world is keeping an eye on Australia for “rare earth’ minerals, and no wonder India and Australia have firmed up their strategic partnership.
It is easy to see how Australia’s deals on “rare earth” minerals work in conjunction with strategic arrangements – therefore the deals are with the US, Japan, India and parts of Europe.
Everyone is now making a priority of having a diverse source of materials – not just China – and this whole new “minerals rush” is bringing India and Australia closer together.