China mined the advantage while the world slept now Australia must wake up, sharpen its edge and lead the charge in critical minerals supply chains

China quietly built the world’s most powerful critical minerals supply chains while other nations - including Australia - dozed through a geopolitical shift that now threatens economic security, trade independence, and defence readiness.

That was the wake-up call issued by Professor Ian Satchwell, Adjunct Professor at the University of Queensland’s Sustainable Minerals Institute, during his keynote at the AusIMM 2025 Critical Minerals Conference in Perth. With piercing clarity, Satchwell outlined how Australia must rapidly shift gears - from passive participant to strategic leader - if it hopes to shape, rather than be shaped by, the new global minerals order.

China played the long game - and won

"While the rest of the world was sleeping, China built vertically integrated supply chains for critical minerals vital to the global energy transition, digital transformation, and defence," said Ian. “This was and remains a deliberate strategy.”

He outlined how China has repeatedly demonstrated its willingness to use its mineral market power as a geopolitical lever. From its 2010 embargo on rare earth exports to Japan over a maritime dispute, to its quiet acquisition of cobalt supply in the Democratic Republic of Congo, China’s approach has been both strategic and sustained.

Even as the US and EU began to recognise the risks, they acted slowly. The US allowed its only rare earths producer to go bankrupt. The EU, Ian recalled, did “the European thing - lots of talking, little doing.”

"Now, the industrialised world is dangerously dependent on fragile, concentrated critical minerals supply chains - with China in control of 80 percent of light rare earths and nearly all heavy rare earths," he said.

Australia’s dual role: Supplier and strategic player

According to Ian, Australia is uniquely placed to both mitigate this risk and benefit from the unfolding realignment - but only if it steps up. Australia has signed 28 critical minerals agreements with other nations, from Japan to the EU and the US. But less than a quarter of those are being actively progressed.

“There’s enormous geopolitical and economic value in what we’ve already built,” Ian said. “But we’re under-utilising our leverage. We need to play to our strengths, and we need to do it now.”

He stressed that Australia is not just a lucky country with rich resources. It also has the skills, technologies, and globally trusted ESG standards to become a cornerstone of secure, sustainable supply chains. Yet support for many Australian-led projects - both domestic and international - has been patchy or absent.

The sleeping giant: Australia’s global footprint

One of the most striking parts of Ian’s address was his focus on Australian mining operations overseas - a national asset that he argued is largely unrecognised. He revealed that in 2024, ASX-listed companies raised more capital for minerals projects than any other jurisdiction in the world. At the same time, Australian companies are operating as many critical minerals mines and processing sites internationally as they are on home soil.

These firms are spending more offshore too. Ian pointed out that Australian exploration budgets abroad are now double what they are domestically. The reserves these companies hold overseas are also significant - currently valued at around half the worth of Australia’s domestic critical minerals reserves. This, he argued, is a powerful yet overlooked position in Australia’s policy and strategic planning.

“We’ve got companies out there leading the world, spending capital, applying Australian standards, and creating diversified supply routes - and we don’t even see it as part of our national critical minerals strategy,” he said. “Canada gets it. We still don’t.”

The risk of relying on one customer

China remains Australia’s largest export market for minerals - by far. Around 75 percent of Australia’s mineral and energy exports go to China. Ian warned this over-reliance is a risk. It’s not just about potential bans or sanctions. There’s also the issue of price exposure, financing arrangements, and offtake agreements that give China significant leverage over Australian project outcomes.

“There’s a false sense of security in assuming this relationship is unshakeable,” he said. “China is actively working to diversify its own supply chains away from Australia - just as we are trying to reduce our dependency on China. It’s a two-way street.”

Strategic reserves are only part of the puzzle

Ian cautiously endorsed the Albanese Government’s proposed Strategic Critical Minerals Reserve, but noted it will only be effective if properly structured. It must be supported by offtake agreements with allied countries and their industries, mechanisms such as price floors to mitigate market manipulation, concessional financing tools, and potentially even selective equity support. Without those, he warned, it risks becoming a political announcement with limited practical value.

He highlighted rare earths as the commodity where real breakthroughs could be achieved. The United States has already shown the way with its investment in MP Materials - providing offtake, equity, and strategic stockpiling. Australia must replicate similar frameworks with customer nations like Japan, South Korea, and Germany.

“The critical minerals reserve only makes sense if the government knows it can on-sell minerals at a sustainable price - one that factors in our higher costs and ESG compliance,” he said. “That means working closely with manufacturers, auto companies, defence suppliers, and processors to build those long-term links.”

He was also frank about the limits of Australia’s value-adding ambitions. While downstream processing is desirable, not every stage of processing will be viable domestically. “Let’s not romanticise value-adding,” he said. “Plenty of examples have turned out to be value-destructive. We need to be rational, commercial, and work with international partners to determine which processing stages make sense here - and which don’t.”

Why Australia and Canada must join forces

Ian closed with a compelling call for closer alignment between Australia and Canada. The two nations share world-leading mining sectors, cultural and economic ties, and comparable values in ESG. They are also, according to his research, the largest producers and investors in critical minerals outside China.

Together, he said, they could wield significant soft power - shaping global mineral trade rules, building resilient supply chains, and counterbalancing coercive tactics from authoritarian nations.

“It’s time to treat Canadian companies and Canadian mines as our closest international allies in critical minerals,” he said. “We can deliver real alternatives to China - but only if we act together.”

The world is watching. It’s time to lead.

Ian Satchwell’s message to Australia’s mining sector - and the policymakers shaping its future - was clear: the world is shifting, and supply chains are no longer just commercial. They are strategic, they are contested, and they are central to global power dynamics.

“Australia has the resources, the talent, the credibility, and the allies to shape this future,” he said. “But we must wake up. We must act. Because while China plays the long game - we’ve already lost too much time.”