Australia launches rare earth project to cut China dependence

2026-08-11

Nolans Project begins

A new large-scale rare earths project has got under way in central Australia. It will handle mining, separation and refining entirely at home, building a supply chain for the US, Europe and Asia. The aim is to challenge China, which dominates the market.

In July, resources company Arafura Rare Earths began work in the Northern Territory on the Nolans Project, an integrated mine development, extraction and refining venture. The site lies on red earth about a two-hour drive from Alice Springs and was once Aboriginal grazing land.

Stuart Forrester, the site manager, spread a rendering across the bonnet of a four-wheel-drive vehicle and, holding a sample of the ore collected, said: 'It took 18 years to get here.' What Nolans will produce is neodymium-praseodymium, or NdPr, oxide, the main raw material for high-performance magnets with strong magnetic force.

Focus on supply chains

According to Arafura's studies, Nolans has one of the world's largest NdPr reserves and could supply 5% of global demand. It was named a priority project at a 2025 US-Australia summit, and both governments have stepped in with financial support.

Construction of the refining plant is set to begin in September, with operations expected in 2029. Output is planned at 4,440 tonnes a year, equivalent to about 5.5 million electric vehicle motor permanent magnets.

Demand is also strong. Arafura said it has signed offtake agreements with Hyundai Motor, Siemens Gamesa Renewable Energy and US minerals trader Traxys for output once the project starts up.

Worries over China dependence

Global manufacturing has long been at the mercy of China's supply policy. In November 2025, the Chinese government, angered by Prime Minister Sanae Takaichi's parliamentary remarks on Taiwan, restricted exports to Japan of dual-use goods, including rare earths. In June 2026, it expanded the scope of companies subject to the curbs.

According to the International Energy Agency, China accounted for about 60% of global rare earth ore mining in 2024. Myanmar, in second place, also has much of its output effectively handled by Chinese companies, taking the combined share to nearly 80%. China has built an integrated domestic system from mining to smelting and holds more than 90% of the global market for magnet rare earths.

Since the 1980s, China has treated rare earths as strategic materials and developed mines and related industries as state policy. Deng Xiaoping is said to have remarked that 'the Middle East has oil, China has rare earths.'

Western countries are moving quickly to diversify suppliers to reduce economic security risks. In February, the US government championed friend-shoring, the relocation of supply chains for critical resources including rare earths to friendly and like-minded countries.

Australia is central to that effort. Its reserves are smaller than China's, but it ranks third globally after Brazil. The government is also backing development, revising a review process that had been split between the federal and state levels and, from April, shifting to a system in which state governments conduct a single assessment based on unified environmental standards. Northern Territory Mines and Energy Minister Gerard Maley says Australia's proximity to Asia, including Japan, is a strength, noting that Darwin and Singapore are connected by a four-hour flight.

Enjoyed this article? Share it with your network!