AMEC Proposes Rare Earths Production Scheme for Australia
The Association of Mining and Exploration Companies (AMEC) has published its Design Paper for Australia’s Critical Minerals Strategic Reserve (CSMR), asking Australia to sharpen its focus on rare earths.
Prepared by Mandala and in collaboration with rare earth developers and industry experts, the paper is a direct response to the Australian Government’s election commitment to develop the country’s CMSR.
In the paper, the recommended model, called the Rare Earths Production Scheme (REPS), outlines a practical, fiscally responsible process to support commercial investment, minimise taxpayer risk and align with the Future Made in Australia objectives.
How will the scheme work?
Under the REPS, rare earths producers and the Australian government will enter a Contract for Difference with a price collar.
This means that the government will cover anything needed once the spot price drops below agreement, while the government will receive a negotiated amount of revenue once the spot price rises above the agreed ceiling.
“The referenced spot price may be the higher of the market price on either the Shanghai Metals Market (SMM) or an ex-China index (if operational),” the paper highlighted. Volume eligible for the scheme will be allocated through a tender process, and prices will be set via a reverse auction.
Rare earths will be purchased as concentrate, mixed rare earth products downstream to oxides, with all projects based in Australia deemed eligible.
A time horizon of five to 10 years is specified in the scheme for ample project support, commercial bankability and less long-term risk for budget.
Why rare earths?
Data from the report 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.
From 2028 onwards, projects such as Yangibana under the Wyloo and Hastings Technology Metals Limited (ASX:HAS,OTCPL:HSRMF) joint venture, Arafura Rare Earths’ (ASX:ARU,OTCPL:ARAFF) Nolans and Northern Minerals’ Limited (AU:NTU,OTCPL:NOURF) Browns Range will transition into operation and drive the country’s production capacity further.
Both Browns Range and Yangibana are located in Western Australia, while Nolans can be found in the Northern Territory.
Other projects consulted with to develop the REPS include Australian Strategic Materials’ (ASX:ASM,OTC Pink:ASMMF,OTCPL:ASMMF)’ Dubbo project in New South Wales, which is currently in the funding and construction stage.
In a 2025 resource review for Australia, critical minerals projects, including rare earths, remain vital to the country’s economic development.
A total of 130 projects were on Australia’s critical minerals…
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