AsianFin -- The Trump administration is reinforcing cooperation with Australia to boost its supply chain of rare earth and other critical minerals in bid to counter China’s dominance of the market.
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President Donald Trump and Australian Prime Minister Anthony Albanese signed a critical-minerals deal at the White House on Monday. The deal would support a pipeline of critical mineral projects worth of up to $8.5 billion, said Albanese during his first meeting with Trump at the White House since Trump’s second term.
Albanese touted these “ready-to go” projects that would expand Australia’s mining and processing ability, and the new agreement was hailed as a landmark taking relationship between two allies “to the next level.”
Trump said the agreement had been negotiated over several months. “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," said Trump. "They’ll be worth $2.” The U.S. is also working with other nations to build a supply chain that isn’t dependent on China, the president said.
Albanese said the agreement was aimed at speeding investment in three types of joint projects, including U.S. investments in rare earth processing facilities in Australia. One project is a joint venture between Australia, the U.S. and Japan, he said. “What we’re trying to do here is to take the opportunities which are there,” he told reporters.
Albanese’s remarks about the initial investment conflicted the Trump administration. He said, “There will be $1 billion contributed from Australia and the United States over the next six months with projects that are immediately available.” But a fact sheet released by the White House states The U.S. and Australian governments intend to invest more than $3 billion together in critical mineral projects in the next six months, with recoverable resources in the projects estimated to be worth $53 billion.
The Export-Import Bank of the United States is issuing seven Letters of Interest for more than $2.2 billion in financing, unlocking up to $5 billion of total investment, to advance critical minerals and supply-chain security projects between our two countries, according to the fact sheet. It revealed the Pentagon will invest in the construction of a 100 ton-a-year Alcoa-Sojitz gallium refinery in Western Australia as part of the deal.
The U.S. government has shifted from subsidies to direct stakes in Intel Corporation and some critical mineral miners earlier this year.
MP Materials, America’s only integrated rare earth producer,on July 10 said the U.S. Defense Department will become its largest shareholder after it agreed to buy $400 million of its preferred stock. The U.S. Department of Energy in late September agreed to take a 5% equity stake in Lithium Americas, a Canadian miner, and a separate 5% stake in its Thacker Pass mining project, the largest lithium deposit in the country. The White House earlier this month confirmed a partnership that give the Pentagon a 10% stake in Canadian miner Trilogy Metals.
U.S. Treasury Secretary Scott Bessent last Wednesday told CNBC that China's new export restrictions on rare earth minerals and magnets requires America to be self-sufficient in critical materials or shift more of supply chain to trusted allies. More stakes are possible for sectors important to U.S. national security, including in rare earths, semiconductors, pharmaceuticals and steel, Bessent said.
Trump’s top economic advisor, National Economic Council Director Kevin Hassett on Monday highlighted Australia’s key role in U.S. efforts to fight China’s dominance on the critical minerals market. He noted that Australia has one of the best mining economies in the world, while praising its refiners and its abundance of rare earth resources.
“Australia is really, really going to be helpful in the effort to take the global economy and make it less risky, less exposed to the kind of rare earth extortion that we’re seeing from the Chinese,” said Hassett ahead of the Trump-Albanese meeting.
