Mission critical minerals: Chinese prime minister in Western Australia

Mission critical minerals: Chinese prime minister in Western Australia


The subject has become an area of intense competition between China and United States

  • Canberra last month blocked several Chinese investors from increasing stakes in a rare earths miner on national interest grounds

  • Last year, it blocked acquisition of a lithium mine by Chinese interests

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SYDNEY (Reuters) – Chinese Premier Li Qiang visited a lithium processing plant in resource-rich Western Australia state on Tuesday, highlighting China's push to secure critical minerals as Washington tries to break Beijing's supply dominance.

Western Australia supplies more than half of the world's seaborne iron ore, with China its top customer, and half of its lithium used in electric vehicles, smartphones and other electronic devices.

Li's visit to Australia, which began Sunday, is the first by a Chinese premier in seven years and marks a stabilisation in ties between the US ally and the world's second-biggest economy.

While China has largely lifted suspensions imposed on $20 billion worth of Australian exports in 2020 after Canberra sought an investigation into the origins of COVID-19, it continues to express concerns about obstacles to Chinese investment in Australia's vast resources industry.

The issue of how Australia screens Chinese investment in its critical minerals sector was expected to be discussed at a business roundtable in Perth attended by Li and Australian Prime Minister Anthony Albanese.

Critical minerals including rare earths have become an area of intense competition between China and the US, which sees Australia's deposits as a way to break China's stranglehold over global supply.

Read more: The economy of electric vehicles: Saudi Arabia focuses on Chile for lithium

Australia last month blocked several Chinese investors from increasing stakes in a rare earths miner on national interest grounds, and last year blocked the acquisition of a lithium mine by Chinese interests.

The US this year extended its support for the first time to back two Australian-listed rare earths projects to help build out the supply chain.

Li said on Monday that China hoped Australia would provide "a fair, just and non-discriminatory business environment for Chinese enterprises".

Ahead of the roundtable, Li toured a lithium hydroxide processing plant owned by Tianqi Lithium Energy Australia, 51 per cent owned by Tianqi Lithium listed in Shenzhen and Hong Kong and 49pc by Australian miner IGO, that is considering whether it will more than double production.

Australia said last month it would consider Chinese ownership when deciding whether companies qualify for tax credits under a new programme of incentives and support for the critical minerals sector.

Tianqi Lithium Chief Executive Frank Ha told the Australian Financial Review on Monday the company had not sought incentives but now that they were on the table it wanted a "fair go".


In an opinion article in The West Australian newspaper on Tuesday, Albanese said his government wants to use Australia's critical minerals and rare earths to create jobs in processing, refining and manufacturing, and sell to a broader range of markets.

"This commitment to revitalising local manufacturing doesn’t mean cutting trade ties or pulling up the economic drawbridge, this is about moving Australia up the international value chain," he wrote.

Three-quarters of Australia's exports to China come from Western Australia, Albanese noted.


Albanese told ABC Radio on Tuesday that Australian officials had expressed concern to China's embassy over an incident at parliament house involving Chinese officials and Australian journalist Cheng Lei.

Lei, who was jailed for three years in Beijing on national security charges until her release in October, was among media covering Li's visit to Canberra on Monday when Chinese officials stood in front of her to prevent her appearing on camera.

Cheng has said it was likely the Chinese officials did not want her to appear on domestic Chinese news coverage. The incident dominated Australian media coverage of Li's Canberra meeting.

"When you look at the footage it was a pretty clumsy attempt," Albanese told the ABC, adding Australian officials had intervened.

"There should be no impediments to Australian journalists going about their job. And we've made that clear to the Chinese embassy."

China's embassy did not respond to a Reuters request for comment.