Iluka Resources CEO Warns of China’s ‘Weaponization’ of Rare Earths Market

Tom O’Leary, CEO of Iluka Resources, issued a stark warning about China's strategic manipulation of the rare earths market during the company’s annual shareholder meeting in Perth. O’Leary described China's control over the industry, particularly heavy rare earths, as nearly absolute, achieved through dominant production and influence on pricing strategies. He criticized Chinese state-owned entities for deliberately driving down prices to discourage competition and maintain market supremacy.

Iluka Resources, which is currently constructing a rare earths refinery in Western Australia, is facing cost overruns pushing the project’s expenses from $1.25 billion to an estimated $1.8 billion. The company is in discussions with the Australian government for additional funding through the Critical Minerals Facility to support the completion of the plant.

O’Leary also highlighted recent moves by China, such as the December ban on exporting knowledge and technology crucial for processing rare earths, as evidence of China's intent to consolidate its market dominance for both commercial and defense purposes. He stressed the importance of these metals in key sectors like electric vehicle production and national defense.

The Iluka CEO advocated for creating pricing structures and supply chains independent of Chinese influence to prevent potential monopolistic control over critical industries by China. He urged Australia and its allies to counteract this by supporting alternative sources of rare earths to ensure strategic autonomy in essential technologies and defense capabilities.