Description: The European Union’s Ambassador to Australia, Lawrence Meredith, stated that the Union is planning on investing substantially in Australia’s rare earth minerals sector to downsize its supply chain reliance on China. The announcement follows this year’s bilateral trade agreement between the EU and Australia which removed tariffs on almost all trading goods. Recent EU policy proposals have carved out at least EUR 10 billion for investments into the rare earth industry which are within a larger investment package amounting to EUR 409 billion. The investment plan would complement the bilateral defense agreement and introduce Australia to join the Horizon Europe initiative by the end of next year.
Impact: The strategic partnership between Australia and the EU is likely to expand into further cooperation initiatives but it’s unlikely to decouple Europe’s reliance on Chinese rare earths in the short to mid – term period. Australia is highly likely to tap into Europe’s defense industry as regional rearmament in the Indo – Pacific is gaining pace. Europe’s investment package into the rare earth industry is highly likely contingent on the ongoing budget negotiations and is likely to equal the EUR 409 billion projections or exceed them since the industry is crucial for the continent’s technological development.