Together, the United States and Australia have created an extraordinary partnership. Uniting forces, they are addressing critical mineral challenges, including those exacerbated by China’s stranglehold on the global market. This agreement goes further by building on the conversations that began under former President Donald Trump. Above all, it demonstrated a renewed commitment to both strengthen and deepen cooperation on rare earths and other critical minerals.
Both countries have agreed to bolster their cooperation on critical minerals. One of their main focuses will be the pricing, permitting, and the regulatory framework surrounding government reviews of sales involving companies and projects operating in this new sector. China would leverage its current iron fist over rare earth mining, which dominates about 70% of global extraction. Alarmingly, it monopolizes an incredible 90% of processing, emphasizing the desperate need for other suppliers.
Australia, as a global leader and the largest supplier of critical minerals, including rare earths, plays a key part in that picture. Under terms of the agreement, the two countries will commit $1 billion to projects on either side over the next half year. This investment will expand our extraction and processing abilities. The second goal is to shore up supply chains that are already exposed by their dependence on Chinese inputs.
Specifically, the United States plans to invest in the construction of a 100-tonnes-per-year advanced gallium refinery located in Western Australia. This facility will deepen America’s production capacity of the critical minerals we need to power everything from advanced driver assistance technologies to the nation’s defense applications.
Besides these initiatives, the US Export-Import Bank has already committed $2.2 billion in financing to accelerate progress on critical minerals projects. Australian Prime Minister Anthony Albanese stressed that this deal is about speeding up investments. In particular, it zeroes in on three key project categories— especially US investments in processing facilities based in Australia.
Lynas Rare Earths, a key player in this sector, has previously secured a contract with the US Department of Defense. The ambitious company is currently working on a major test project in Texas. This program is intended to increase domestic capacity for processing rare earths and reduce dependence on foreign adversaries.
Albanese stated that the agreement would support a pipeline of $8.5 billion in “shovel-ready” projects. These projects are intended to boost Australia’s mining and processing capabilities. Both countries are pleased at making a strategic play to lessen their national dependence on China. This is a remarkable change, given that China remains Australia’s largest trading partner.
US companies’ dependence on critical minerals leaves them vulnerable to future supply bans by China. The partnership between the US and Australia aims to reduce these risks by encouraging independence on critical mineral resources.