Australia has taken another step forward to loosening Beijing’s grip on the world’s critical mineral supply chains.
The Tasmanian state government is offering a $10 million loan to the long-dormant Dolphin Tungsten mine on the remote King Island located in Australia’s Bass Strait.
An additional $15 million of federal government support is currently being negotiated.
Tungsten is the world’s second hardest mineral after diamond; it has an extremely high melting point, and is a critical component for high-end drills, electric vehicles, and military hardware.
However, global tungsten production is largely controlled by the Chinese Communist Party (CCP), who produce 82 percent of world tungsten supply, along with several other mineral supply chains.
In recent years, the Australian and U.S. governments have moved to develop supply chains outside of Chinese control, due to concerns the CCP could limit access to the minerals as part of a geopolitical dispute.
“We note that several western governments have recently identified a crisis in the supply chain for critical minerals, particularly tungsten, for which North America currently has no mines in production,” Johann Jacobs, executive chairman of King Island Scheelite said in an investor announcement.
“Therefore, we see a close alignment between the company’s development objectives, the Tasmanian government’s interests in maintaining and growing both Tasmanian jobs and export revenue, and the strategic objectives of the Australian government …” he said.
Former U.S. President Donald Trump declared a national emergency in October over the United States’ reliance on China for rare earth minerals.
Trump signed the executive order asking the Department of the Interior to investigate implementing the Defense Production Act, which would fund mineral processing onshore or outside of China.
Trump also said he was planning to incentivise U.S. mining companies to pull their production operations from China and back to the United States.
The Dolphin Tungsten project has been closed for around 30 years after falling tungsten prices in the 1990s made the mine not financially viable. However, a resurgence of demand due to new technologies, has seen the price rise.
“The company estimates the project could create up to 90 full-time equivalent jobs during construction, with around 55 ongoing full-time equivalent jobs on King Island,” the Minister for State Growth Michael Ferguson said.