Rare Earths 2040 Outlook: Australia’s Place in the Ex-China Market

Australia’s rare earths production

Data from a report by the Association of Mining and Exploration Companies (AMEC) found that Australia remains one of the largest holders of rare earths globally, placing fourth overall.

The country is home to approximately 5.7 million tonnes (Mt) of rare earth elements. It is behind China, Brazil and India, who host 44 Mt, 21 Mt and 6.9 Mt respectively.

In terms of production, Australia also ranks fourth globally.

Meanwhile, Data from the US Geological Survey shows that about 390,000 tonnes of rare earths were produced globally in 2024.

China remains the major producer at 270,000 tonnes, accounting for 70 percent of the overall production.

Australia, which hosts Lynas Rare Earths' (ASX:LYC,OTCQX:LYSDY) Mt Weld mine, produced 13,000 tonnes.

Lynas Rare Earths is the world’s only significant producer of separated rare earth materials outside of China.

The Mt Weld mine in Western Australia is estimated to have a resource of 106.6 million tonnes at an average grade of 4.12 percent total rare earth oxide (TREO) for a total of 4.39 million tonnes of contained TREO as of 2024.

Rare earth concentrate from Mt Weld is processed in Lynas’ rare earths processing facility in Kalgoorlie, which is regarded by the company as “the first of its kind in Australia.”

The MREC material produced in Kalgoorlie will be further processed at the Lynas Malaysia advanced materials plant in Gebeng, Malaysia.

The Kalgoorlie facility also has the capacity to accept feedstock from other projects outside the company’s operations.

In May 2025, Lynas reported that it had achieved its first production of dysprosium oxide (Dy) at Lynas Malaysia.

“(This production is a) significant step for supply chain resilience and provides customers with the option of sourcing product from an outside China supplier,” said CEO and Managing Director Amanda Lacaze in a May 16 release.

Months later, the company announced an expansion at Lynas Malaysia, establishing a new Heavy Rare Earth (HRE) separation facility to keep up with the market demand for non-Chinese sources.

The new facility is targeted to have a processing capacity to separate up to 5,000 tonnes per annum of HRE feedstock. The company said that this builds on its proven ability to produce HRE oxides in commercial quantities, “a capability which is unique outside of China.”

Lynas said it is in active discussions with various offtake partners to secure offtake of the expanded range of HRE products at fair prices.

“The phased construction of the facility will deliver priority products first, with first production of Samarium from Mt Weld feedstock forecast for April 2026.”

Promising projects

Besides Lynas, Australian companies holding strong potential for rare earths growth are also expected to contribute to the ex-China market in the coming years.

The National Reconstruction Fund's (NRFC) made a commitment of AU$200 million for the development of Arafura Rare Earths' (ASX:ARU,OTC Pink:ARAFF) Nolans rare earths project in January 2025.

Located in the Northern Territory, Nolans is set to be Australia’s first ore-to-oxide rare earths processing operation. Arafura said it is expected to account for around 4 percent of the world’s neodymium and praseodymium (NdPr) demand from 2032.

Iluka Resources (ASX:ILU,OTC Pink:ILKAF) also received AU$400 million of additional funding from the Australian government in December 2024, granted for the Enneaba rare earths refinery.

According to Iluka, the refinery will establish Western Australia as a strategic hub for the downstream processing of rare earths. It is expected to produce neodymium, praseodymium, dysprosium, terbium and more starting in 2027.

Recently, Energy Fuels (TSX:EFR,NYSEAMERICAN:UUUU) proposed to acquire 100 percent of Australian Strategic Materials, owner of the Dubbo rare earths project.

The acquisition is intended to enable Energy Fuels to create a new “mine to metal and alloy rare earths champion” and includes Australian Strategic Materials’ Dubbo rare earths project and its flagship Korean metals plant.

Dubbo has already secured all necessary permits and is currently waiting on a final investment decision and commencement of construction.

Its reserves support an initial mine life of 20 years.

Meanwhile, the Korean Metals Plant (KMP) has been operational since 2022 and is now in Phase 1 commissioning with an installed capacity of 1,300 tonnes per annum of neodymium iron boron alloy.

Another project to watch out for is the Yangibana rare earths project, which is a 40:60 joint venture between Hastings Technology Metals Limited (ASX:HAS,OTCPL:HSRMF) and Wyloo Metals.

Discovered in 2014, Yangibana has since progressed from exploration to construction, with first production expected in the second quarter of 2026.

The operation has a projected 17-year mine life, with Stage 1 concentrate production estimated at 37,000 tonnes per year. Construction at the site is described as 30 percent complete.

Australia's role in the imbalance

So, where does Australia sit in all of this?

Adamas Intelligence posits that the overall imbalance pushes the ex‑China market into a buyer’s market, where producers must sell surplus oxides abroad—primarily to China.

If midstream expansion succeeds, then Australia could capture more value domestically and reduce dependence on China as the default buyer.

With this, it is recommended that Australia accelerate its domestic processing capacity, as scaling midstream operations remains a challenge. This means much of Australia’s production will be exported as oxides rather than finished magnet materials.

Industry data suggest that Australia can increase its global rare earth production by 2030 to 20 to 25 percent by maximising its mines and notable projects’ potential, bringing its production from its current average of 10 percent.

Policy changes are also being seen in Australia, which are detrimental to achieving certain REE goals.

The Federal Government opened the new year by revealing that it is targeting the end of 2026 for its critical minerals strategic reserve (CMSR) operations, with antimony, gallium and rare earths as the first minerals of focus.

AMEC also recently proposed a Rare Earths Production Scheme (REPS) under the CMSR, wherein rare earths producers and the government will enter a Contract for Difference with a price collar.

AMEC recommended that neodymium, praseodymium, dyprosium and terbium projects be included under the REPS.

For partnerships, Australian Prime Minister Anthony Albanese and US President Donald Trump signed a rare earths deal in October 2025 under which Australia and the US agreed to each make more than US$1 billion in investments over the next six months for initial projects, including antimony mines, to address the critical minerals global demand.

“We foresee a future where China grows increasingly reliant on foreign sources of supply, leading the balance of pricing power to tilt gradually more towards the ex-China market,” Adamas’ report concluded.

“All things considered, we expect the early 2030s will see a turning point in which China halts exports of NdPr oxide, Dy oxide and Tb oxide and increasingly imports surplus supplies from the rest of the world.”