Mapping nascent rare earth global production networks in a time of geopolitical contestation

Powerful and lightweight rare earth magnets are the functional heart of wind turbines and electric vehicle motors. They are thus crucial inputs into some of the most contested global production networks (GPNs) in the global energy transition. Recent literature – on friendshoring, derisking and the ‘security-sustainability nexus’ of critical minerals – has focused on Western governments’ attempts to develop supplies of rare earth metals independent of China. However, few have examined how individual firms develop their strategies under such conditions. Accordingly, this paper presents an original analysis of offtake agreements to map out how Australian rare earth miners are coupling into nascent, non-Chinese GPNs. These offtakes intersect in complex ways with ongoing state attempts to financially derisk rare earth mining and processing projects in Australia. We show how the decoupling from Chinese up- and midstream firms and recoupling with Western mid- to downstream firms has gathered pace since 2020. By examining the four most advanced Australian rare earth mining firms in detail, we demonstrate how government agencies (in Australia and other Western countries) have shaped offtaking strategy with public finance conditions, thereby revealing the mechanisms by which geopolitically-motivated state actors are seeking to drive the de/re-coupling of upstream rare earths to Western GPNs. In conceptual terms, the paper makes two contributions to the study of GPN reconfigurations within the context of the geopolitically inflected energy transition. First, offtake analysis facilitates the tracking of downstream and upstream relationships in GPNs, particularly in relation to the raw material ‘origins’ of such networks. Importantly, it also serves to reveal the importance of variations in firm strategy and the GPN configurations that result. Second, distilling the interplay between offtakes and public subsidies shows how managing that nexus is critical for mining firms seeking to initiate projects. Taken together, the contributions chart a network-level perspective at the interface of firm and state strategies that adds important nuance to often quite general debates about the return of industrial policy and state derisking strategies.