The United States and Australia have reached a new agreement aimed at strengthening the supply of rare earths and other critical minerals, reflecting ongoing concerns over China’s dominance of the market.
The deal is part of broader efforts by the Trump administration to secure strategic access to these essential materials, which are crucial for defense equipment, computer chips, and electric vehicles.
$8.5B pipeline and immediate investments
Australian Prime Minister Anthony Albanese said the partnership would support a pipeline of $8.5 billion in “ready-to-go” projects designed to expand mining and processing capacities in both countries.
According to a framework text released alongside the agreement, $1 billion will be invested jointly by the US and Australia in projects over the next six months.
Albanese emphasized that while cooperation on critical minerals has been ongoing since the Trump administration’s first term, this latest deal takes the partnership to a “next level.”
The agreement is expected to accelerate investments in three main areas, including US funding for processing facilities located in Australia.
The two governments will also collaborate on regulatory frameworks, including pricing, permitting, and guidelines for government review of critical mineral projects and company sales.
China’s market influence and supply risks
China currently controls around 70% of rare earth mining globally and processes roughly 90% of these materials.
This heavy concentration has left US companies vulnerable, particularly amid trade tensions and recent restrictions imposed by Beijing in response to new US tariffs.
The deal is intended to mitigate such risks by ensuring a more secure supply chain for essential minerals.
The US separately confirmed plans to invest in the construction of a 100 tonnes-per-year advanced gallium refinery in Western Australia and is preparing approximately $2.2 billion in financing through the Export-Import Bank to support other critical minerals projects.
In recent months, the Trump administration has also invested in firms such as MP Materials in the US, as well as Canadian-based Trilogy Metals and Lithium Americas, acquiring ownership stakes as part of the support package.
Market reaction and strategic implications
Ahead of the announcement, shares of Australian rare earths companies, including Lynas Rare Earths, surged on expectations of increased support.
Lynas, which previously secured a US Defense Department contract, is developing a project in Texas that will benefit from closer US-Australia cooperation.
Despite the high-level announcement, the White House framework was sparse on details, highlighting the sensitive nature of the geopolitical and trade issues involved.
While Australia is a major source of critical minerals, it and the US still depend on China for processing, adding complexity to efforts to reduce reliance on Beijing.
China remains Australia’s largest trading partner, further complicating the strategic calculations underpinning the agreement.
The US-Australia partnership signals a new phase in global competition over critical minerals, reflecting both countries’ determination to secure supply chains independent of China.
By combining investment, regulatory alignment, and project collaboration, the deal seeks to bolster domestic production while protecting industries that depend on these vital materials.
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