Rare earths are misleadingly named. They are not very rare. But where they occur they are often highly concentrated. China has about a quarter of known deposits, but a far bigger share of world supply of refined rare earths - 85 per cent, crushingly dominant. Illustration: Andrew Dyson Credit: In May, the Chinese Communist Party's main mouthpiece, the People's Daily, carried a front-page threat to cut off exports to the US as the trade and technology war escalated. "Don't say we didn't warn you," was the punchline. It's a phrase redolent with meaning – Beijing used it before hostilities with India in 1962 and Vietnam in 1979. And China has used its power over supply to punish other countries in the past, notably against Japan from 2010-13 during territorial dispute. As a result of that experience, Japan gave hefty help to an Australian rare earths company, Lynas Corporation. And one effect of China's threat to the US in May was to produce a 15 per cent spike in the price of Lynas shares. Lynas is "the only major strategic supplier of rare earths in the West", says a resources analyst at the Australian stockbroking house Curran & Co, Andrew White.

Illustration: Dionne Gain Credit: Another effect was to focus the attention of the US government. "In the last year, congressional committees in DC are suddenly waking up that we need to have a plan to protect rare earth supplies to critical defence platforms and high tech industry that can't function without these materials," US congressman Joe Courtney tells me. "Time is of the essence," says Courtney, a member of the House Armed Services Committee and chair of its Seapower and Projection Forces subcommittee. While Australia produces rare earths, it doesn't have the manufacturing capability to actually use any, according to White. So there's no local industry exposed to a Chinese export ban. But, of course, Australia relies on the US for its sophisticated military hardware, among other things, so it's exposed indirectly. Congressman Courtney says that options for the US now range from government subsidies to research agencies to develop alternative solutions, to seed funding for individual rare earth ventures. And, he said, because of the US-Australia alliance, and the fact that Australia is a major source of rare earths, "this is an issue with perfect alignment for us to get a common policy" with Australia. Scott Morrison is due to work on that alignment when he meets Donald Trump in Washington this week. The Australian government published a report two weeks ago listing 15 potential mining and processing projects in Australia for producing rare earths and other "critical minerals". The estimated cost of developing all of them would total $5.7 billion. "A secure and stable supply is vital for Australia and for the global community, with critical minerals crucial for a wide range of high-tech products including in defence," Australia's Defence Minister, Linda Reynolds, said on Monday.

"Australia has a key role in supporting this global market, because of our significant deposits of critical minerals."

Reynolds, a former brigadier in the Australian army, has been working on this issue for five years, long before she became minister. Australia has also held talks with Britain, France and NATO, says Reynolds, "to make sure we have a functioning market in critical minerals, and to foster healthy competition". A satellite image shows thick black smoke rising from Saudi Aramco's Abqaiq oil processing facility. Riyadh reports that fires have now been extinguished. Credit:AP Of course, it would have been smarter for the US – and Australia – to do this when China cut its rare earths supply to Japan. But the US and Australia were both complacent. We only have the Lynas supply because of the prudent foresight of the Japanese government. And, if Australia were smart, it would now act on the Saudi interruption to develop a proper oil contingency plan. The Morrison government might at least finish the Department of Energy report, now very late, on the options. Loading