The United States and Australia have sealed a landmark agreement aimed at strengthening supply chains for rare earths and other critical minerals, in a move designed to reduce reliance on China’s dominant market position.
The deal, signed on Monday, commits both nations to accelerate investments in mining and processing projects worth $8.5 billion (£6.3 billion). It includes an initial $1 billion fund for projects to be developed across the US and Australia within the next six months, according to a framework released by the White House.
Australian Prime Minister Anthony Albanese said the partnership would “support a pipeline of ready-to-go projects” that will expand Australia’s capacity to mine and process rare earths. The initiative is part of a wider effort to secure key materials used in everything from electric vehicles and computer chips to defence equipment.
“This agreement takes our collaboration with the United States to the next level,” Albanese said, emphasising that the deal would help ensure a stable and transparent global market for critical minerals.
Read Also: Australia’s Climate Pledge Branded ‘Anti-Climactic’
China currently accounts for about 70% of global rare earths mining and nearly 90% of processing. The concentration of control has raised concerns in Washington and Canberra, particularly as trade tensions between Beijing and Washington continue to escalate.
US companies remain heavily dependent on Chinese supplies, leaving them exposed to geopolitical risks. Beijing’s decision earlier this year to tighten export restrictions on key minerals has further exposed the vulnerability of Western supply chains.
Under the agreement, the US government will support the construction of a 100-tonnes-per-year advanced gallium refinery in Western Australia. The Export-Import Bank of the United States is also preparing to offer up to $2.2 billion in financing for critical mineral projects, officials confirmed.
The deal also includes plans to harmonise standards and rules for investment reviews and permitting processes, making it easier for companies in both countries to collaborate.
The announcement has already lifted shares in key Australian mining firms, including Lynas Rare Earths, which was previously awarded a contract by the US Department of Defense to develop a processing plant in Texas.
The White House said the framework remains open to adjustments as both nations work through “complex but necessary” regulatory and market coordination.
“The world’s demand for critical minerals is only growing,” Albanese said. “This agreement helps ensure that democratic nations have secure access to what’s needed for future industries.”
