Miningweb: US and Australia team up on rare earths to take on China

Key topics:US-Australia pact boosts critical mineral and rare earth productionDeal counters China’s dominance in global mineral supply chainsSubmarine and defence cooperation deepens under Aukus alliance.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up for the BizNews channel here..By Lauren Dezenski, Hadriana Lowenkron and James Mayger.US President Donald Trump signed a landmark pact with visiting Australian Prime Minister Anthony Albanese to boost America’s access to rare earths and other critical minerals, an effort to counter China’s tight grip on the supply chains of key metals.The two governments will jointly invest in a swathe of mines and processing projects in Australia to boost production of commodities used in advanced technologies from electric vehicles to semiconductors and fighter planes. Australia has an $8.5 billion “pipeline that we have ready to go,” Albanese said at a meeting between the two leaders at the White House.“In about a year from now, we’ll have so much critical mineral and rare earths that you won’t know what to do with them,” Trump said. .Read more:.Miningweb: Xi’s rare earth strike threatens global tech and supply chains.The US has been locked in a rare-earths tussle with China since Beijing fought back against Trump’s trade offensive earlier this year, imposing export curbs on the materials. It has since expanded those restrictions. The prospect of even tighter supply has injected momentum into an American push to build alternative production capacity, even as industry executives and analysts caution that replacing a vast network of mines and refining plants will not be swift..The leaders said the agreement would include Australian processing of rare earths and other critical minerals, with Albanese adding that Australia had “capacity” to expand those efforts. The US and Australia pledged to protect their domestic markets from “unfair trade practices,” including through adopting trading standards that involve “price floors or similar measures,” according to the text of the deal circulated by Albanese’s office.“This is the most significant bilateral minerals cooperation we have seen between two major Western countries,” Gracelin Baskaran, a critical minerals-focused director at the Center for Strategic and International Studies said by phone. “Today’s announcement really shows the US isn’t trying to address critical minerals alone. It’s looking to find the right partners.”The deal, which prompted a surge in Australian rare earths and critical minerals stocks on Tuesday, will begin with the US and Australia each paying more than $1 billion over the next six months for initial projects, with some further projects in both countries, the Australian prime minister said. The document did not include details on which entities would provide that financing. .Rare earths are a subset of critical minerals, a wider group of core materials which in the US includes dozens of metals. Even before the recent export controls, China had already put restrictions on supplies of vital inputs including gallium, germanium and antimony. The Pentagon will help fund the construction of the planned 100 ton-a-year Alcoa-Sojitz gallium refinery in Western Australia as part of the deal, according to the White House. The Export-Import Bank of the United States is also issuing letters of interest for more than $2.2 billion in financing on critical mineral projects.The sitdown, Albanese’s first White House visit since Trump returned to power, comes as the Australian leader looks to shore up ties with the US, using his nation’s mineral wealth as leverage. China’s rare-earth export restrictions have rattled economies across the globe, with US Treasury Secretary Scott Bessent saying last week that allies — including Australia — are in talks about a united response. Australia, which holds the world’s fourth-largest deposits of rare earths, has long sought to position itself as a viable alternative to China for supplies crucial for industries covering semiconductors, defence technology, renewable energy and other sectors. The country is also the base of the only producer of so-called heavy rare earths outside China, through Lynas Rare Earths Ltd.Efforts to secure a deal were already underway ahead of Albanese’s visit. More than a dozen Australian mining firms held meetings last month in Washington with officials from various agencies and were told the US was looking for ways to obtain equity-like stakes in companies, according to people familiar with the talks, part of a broader American strategy to develop supply chains to compete with China. Australian Treasurer Jim Chalmers met with US investors from firms including Blackstone Inc. and Blue Owl Capital in New York last week to pitch his country as a stable, resource-rich destination for global capital and a key partner in efforts to diversify critical supply chains.There has been growing confidence that Australia and the US would begin discussions on how Canberra could provide secure rare earth shipments and bolster US capabilities. That belief has sparked investor enthusiasm, sending shares of miners such as Lynas up by over 150% during the past 12 months.Submarine SalesTrump on Monday said the two leaders were discussing “trade, submarines, lots of other military equipment,” with national security matters high on the agenda. The US president has pressed Canberra to increase defence spending to 3.5% of gross domestic product from around 2% now, a move Australia has so far resisted.Australia agreed to purchase $1.2 billion in underwater drones and take delivery of a first tranche of Apache helicopters in a separate $2.6 billion deal, the White House said. Another key issue is an arrangement for the US under the Aukus pact to sell Australia as many as five nuclear-powered Virginia-class submarines by the early 2030s. Australia and the UK would then design and build a next-generation submarine partly using American technology, due to be completed in the 2040s..Read more:.Miningweb: US weighs $5bn mining fund to secure critical minerals.The Aukus agreement was signed by former President Joe Biden’s team in 2021 to counter Chinese military expansion in the Indo-Pacific region. The submarine deal is central to the nations’ collective security agreement. The Trump administration, however, is reviewing the pact to determine if it is “aligned with the President’s America First agenda,” according to the Pentagon, raising fears that Trump could abandon it.Officials from Australia and the UK, though, have downplayed that prospect. And Trump on Monday suggested that he planned to push forward with submarine sales.“We are doing that,” Trump said in response to a question about expediting the sales. “We have the best submarines in the world, anywhere in the world, and we’re building a few more, currently under construction. And now we’re starting, we have it all set with Anthony.”The US president also praised military cooperation between the two allies.Still, Trump suggested he was unlikely to offer Australia tariff relief, which Canberra has sought as a nation that runs a trade deficit with the US. Trump hit Australian goods with a 10% duty, the baseline the president imposed on many other countries’ products.“Australia pays very low tariffs — very, very low tariffs,” Trump said.Albanese faces a balancing act on trade as he meets Trump. The Australian leader has also sought closer trade ties with China, his country’s largest trading partner. Albanese visited Beijing in July, his second visit since taking office..© 2025 Bloomberg L.P.

Miningweb: US and Australia team up on rare earths to take on China

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