Australia advances $486.7 million project to reduce reliance on Chinese rare earths

By Ha Er-rui and AFP | 2026-06-10

The New South Wales (NSW) state government has granted provisional approval for a mineral sand project worth 693 million AUD ($486.7 million) that will produce titanium minerals and rare earths, advancing Australia's push to build supply chains less dependent on China.

The Copi Mineral Sands Project, about 180km southwest of Broken Hill, won state approval in late May but still requires Commonwealth sign-off. It is expected to operate for 18 years, processing up to 27 million tons of material a year.

Copi will produce up to 400,000 tons a year of titanium minerals and rare earth concentrate, including ilmenite, rutile, zircon and monazite. The minerals feed clean energy, defense, telecommunications and medical device industries.

"With 21 of the 31 nationally identified critical minerals, NSW is uniquely positioned to be a globally significant supplier," Natural Resources Minister Courtney Houssos said.

An aerial view shows part of the Copi Mineral Sands Project in the far southwestern corner of NSW state, Australia. The deposit contains 1.2 billion tons of rare earths and is expected to supply titanium minerals and rare earths used in clean energy, defense and telecommunications. [RZ Resources]

Northern Minerals conducts rare earth production at its Browns Range project in western Australia. Rare earths are critical materials used in sectors including semiconductors and defense. [Northern Minerals]

Japanese backing

Copi is being developed by RZ Resources in the state's far southwest, with production slated to begin in 2029 pending final approval. It is the second critical-mineral project that NSW has approved in four months.

Japanese trading house Marubeni and material maker JX Advanced Metals are investing in Copi, the Australian Financial Review reported in late May.

Marubeni's capital and marketing reach, together with JX Advanced Metals' processing expertise, could help Australia move beyond mining to refine minerals domestically, narrowing a midstream gap in a supply chain long dominated by China.

"One global player has tied up a significant portion of the minerals market, and that's China," NSW Minerals Council Chief Executive Stephen Galilee told the Australian Broadcasting Corp. The concentration in China's hands has driven Australian efforts to diversify supply and processing, he said.

"This project will help secure the supply of critical minerals," NSW Planning Minister Paul Scully said. He called Copi an example of a sector "helping to create a sustainable future for NSW, Australia and the world."

Chinese divestment

But Canberra is pushing just as hard to keep the sector out of Chinese hands.

Australian Treasurer Jim Chalmers ordered six China-linked shareholders to sell their stakes in rare earth developer Northern Minerals in mid-May, citing the need to protect the sector from foreign control.

"We operate a robust and non-discriminatory foreign investment framework and will take further action if required to protect our national interest in relation to this matter," he said in a statement.

Northern Minerals aims to challenge China's dominance in dysprosium, a rare earth used in the high-performance magnets that power electric vehicles.

The six investors included several of Northern Minerals' largest shareholders, led by Beijing-based Vastness Investment Group and Hong Kong-based Qogir Trading and Service Co. Together they held a 17.58% stake and were ordered to divest.

Treasury reforms announced in mid-May place greater emphasis on the strategic and national security implications of foreign investment.

Asked about the order, China's Foreign Ministry said it was not aware of the situation.

"China has consistently opposed the overstretching of the concept of national security to interfere with normal investment activities," pokesman Guo Jiakun told a news briefing. "The Australian side should earnestly respect the legitimate rights and interests of Chinese investors."

China "isn't defending critical minerals investment. It's defending leverage," an analysis in June by the Australian Strategic Policy Institute said. The report said divestment orders reduce one form of vulnerability but do not remove Australia's dependence unless it expands domestic processing capacity and broader industrial capability.

Northern Minerals said it was "currently considering the new disposal orders and will make a further announcement once it has done so."

A 2-year endeavor

Australia has spent two years using foreign investment laws to reduce Chinese influence over Northern Minerals. The company referred itself to the Australian Foreign Investment Review Board (FIRB) in late 2025 after concerns arose over attempts by China-linked investors to increase their holdings.

The China-linked Yuxiao Fund sought to raise its stake in Northern Minerals in 2024, but the FIRB demurred. It gave Yuxiao and four associated shareholders 60 days to sell their interests.

Washington signed a deal last October to expand its access to Australia's rare earths and critical-mineral deposits. Northern Minerals was among the companies singled out under the agreement, which stressed the need to "diversify critical supply chains."

China controls some of the world's largest rare earth reserves and wields enormous influence as almost the only country able to refine the metals at industrial scale.

Countries including the United States, Germany and South Korea are seeking alternative supplies.

Almost 99% of the world's dysprosium is produced in China, according to the company.

Economy