Former UK Foreign Minister Dominic Raab has issued a stark warning regarding the significant influence China holds over the global critical minerals market. He cautioned that if Western nations do not take decisive action to reduce this dependence, manufacturers of essential products—from mobile phones to military equipment—could see their business models severely compromised.
Raab’s remarks coincide with a recent agreement between Australia and the United States aimed at establishing a more robust partnership in the critical minerals sector. Madeleine King, Australia’s Resources Minister, announced that the two countries will each invest $1.5 billion within six months to bolster their cooperation in critical minerals and rare earths.
Investment Agreement Signals Intent
The agreement, signed by Donald Trump and Anthony Albanese, has been described as a “real statement of intent” by Raab, who now advises the investment firm Appian Capital. According to King, the deal is designed to foster a productive relationship between the two nations, with the potential to fund a pipeline of projects valued at $13 million.
Reflecting on the collaborative effort, King stated, “That’s what we bring to the table in Australia when we speak to our friends in America; it’s a track record of actually mining and processing.” This statement underlines the critical role Australia plays in the supply chain for these vital resources.
China currently dominates the global market for critical minerals and rare earths, controlling approximately 90 percent of the market, including refining and processing. Raab characterized the existing market conditions as “broken,” indicating a lack of true competition.
Challenges Ahead for Western Manufacturers
Raab emphasized the urgency for Western investors to level the playing field against Chinese companies, which benefit from substantial state subsidies. “The short answer is, for the foreseeable future, there’s going to need to be seed capital provided by government to incentivise those areas of the market which won’t otherwise attract investment,” he asserted.
He further noted that China has systematically acquired critical minerals over the past two decades, while many Western businesses have failed to anticipate the ramifications of these actions. “The industrial manufacturing businesses have been so focused on their shareholder cycles, which are relatively short-term, that they’ve missed the fact that in a relatively short order, a number of a few years, if they don’t have these supply chains, their business model… will be totally torpedoed,” Raab explained.
As governments and industries grapple with the reality of their dependencies, Raab’s insights highlight a pressing need for strategic investment and planning to ensure a stable supply of critical minerals in the future. The stakes involved are high, and the time for action is now.
