On October 20, Australia and the United States solidified a significant partnership by signing a multibillion-dollar agreement focused on rare-earth elements and critical minerals. Former US President Donald Trump pictured with then Australian Prime Minister Scott Morrison in the White House on September 20, 2019. Collectively, they formalized one of the most groundbreaking deals. This agreement is the most recent global diplomatic effort to reduce China’s dominant control over the critical minerals and rare earth market. These resources have drop-dead importance for advanced technologies and defense applications.
The agreement is part of a broader strategy to enhance cooperation between Australia and the US in the realm of critical minerals. These materials are essential for building advanced electronics, clean electric cars, and modernized military hardware. In this area, China has a near monopoly. Both countries have a vested interest in a trusted, secure supply chain that fosters their domestic technological development and protects their national security interests.
Miners from Perth to Sydney have rejoiced at the news of the multibillion-dollar deal, seeing it as a gamechanger that could galvanize the industry’s fortunes. This collaboration may be responsible for hundreds of millions of new investment in upstream and downstream mining operations and the development of innovative extraction technologies. In addition, it points to a larger strategic pivot towards finding sources of these critical minerals that do not involve dependence on China.
Although the deal is undoubtedly a positive and encouraging step in the right direction, experts warn that curtailing China’s influence won’t happen overnight. They argue that an effort to create a reasonably competitive alternative supply chain needs time, investment and focused energy from both countries. The long-term impact of this deal will depend on Australia and the US. Their success will be determined by how well they make their collaborative plans a reality.
And the world is growing even more reliant on this advanced technology by the day. Consequently, the global demand for critical minerals and rare earth elements is booming. If this agreement is successfully implemented, it could pave the way for future collaboration between countries. These countries are desperate to escape China’s grip on critical supply chains.