Under the original plan, rare earths, zircon, and titanium were to be sold to the Chinese company Shenghe Resources.
The Australian mining company VHM has terminated its offtake agreement with China’s Shenghe Resources. The deal had originally envisaged the sale of around 60% of output from the Goschen project in the southeastern state of Victoria to the Chinese group. Production of rare earths, zircon, and titanium at the site is scheduled to begin by the end of 2027.
VHM said the decision was taken because several contractual conditions had not been met. By cancelling the agreement, the company can now approach a broader range of potential buyers, as global demand, particularly outside China, continues to rise. The move also comes against the backdrop of the Australian government’s recently announced plans to support domestic critical minerals projects through price guarantees and other market-stabilisation measures.
Amid growing geopolitical tensions, an increasing number of countries are seeking to reduce their dependence on China for critical raw materials. China not only dominates the mining and processing of many strategic minerals at home, but also holds extensive positions across global supply chains. As a result, several mining companies worldwide have begun to adjust their strategies and scale back cooperation with Chinese partners.
Brazilian rare-earth producer Serra Verde, for example, has recently shortened its offtake agreements with Chinese customers in order to supply more Western buyers. In Canada, the government has gone even further in the case of Vital Metals, blocking the export of rare-earth feedstock to China so that it can instead be processed domestically.
Photo: iStock / EvgenyMiroshnichenko