Australia and Japan are moving ahead with their agreement to create an alternative supply chain for critical minerals. Altogether, this collaboration is an immediate and targeted response to China’s recent export restrictions. These materials are the backbone of many cutting edge technologies including batteries and wind turbines. China plays an outsized role in the rare earth minerals market worldwide. Both countries are now eager to reduce their use of imported Chinese materials.
In practice Over the years, Australia and Japan have developed a unique relationship when it comes to critical minerals. This collaborative model has allowed Japan to maintain a stable influx of public capital to support development in its tech sector. In return, Australia has received an indispensable trading partner. Recent geopolitical tensions have made both countries reconsider their approaches. At the same time, China’s stranglehold over the rare earth market has played a key role in this reassessment.
China has leveraged its control over rare earth minerals as a geopolitical tool, imposing export curbs that threaten the stability of supply chains worldwide. Canberra is reconsidering its national approach. It is doing so by tapping into its own strategic reserves to assist allies such as Japan in diversifying their reliance from Chinese materials. This strategic repositioning mirrors wider Australian government trends to move away from reliance on China and strengthen national security by diversifying economic relationships.
Now, Australia and Japan are partnering to create a robust alternative supply chain. This alternative supply chain will be more insulated and therefore better able to withstand pressures from external actors. Through collaboration, the two nations can bring together their resources and expertise. Together, they provide a one-stop shop for securing a stable, domestic supply of all critical minerals required for green technologies and defense applications. This program strengthens the economies of both countries. It deepens the diplomatic partnership among them all, as they wrestle with a confusing and shifting global landscape.
Recently, Australia’s Minister for Resources has emphasized the significance of this new partnership. He said that it will help both countries secure supplies of critical minerals and maintain their competitiveness. He noted that the collaboration will increase their capacity to innovate. This is increasingly the case in a critical manufacturing sector like renewable energy, where rare earth minerals are known as important inputs.