Western governments pouring billions into critical minerals to break reliance on China could repeat history's mistakes. Industry leaders warn of oversupply risks.
"The biggest risk is we all do our own thing and generate multiples of volumes the world needs, crushing everything," said Brett Beatty of Resource Capital Funds.
The U.S. has allocated over $20 billion, while Australia committed at least A$13 billion. However, rare earths market is worth only $6.4 billion, yet pledged aid exceeds that.
Past examples include Europe's "butter mountains" and Russia's aluminium floods. David Merriman of Project Blue says surpluses may be limited if governments temper support.
Lynas Rare Earths CEO Amanda Lacaze stated stockpiles are not currently a risk. Australian Minister Madeleine King emphasized targeted investments for secure supply chains.
G7 countries discuss creating a secretariat to coordinate efforts. The DRC stockpiled cobalt, while Indonesia banned nickel ore exports to boost processing.
To lower oversupply risk, adding processing capacity as byproducts is suggested. Alcoa and Sojitz are adding gallium extraction in Western Australia.
