
US and Australia signed Rare Earth Treaty to counter China’s hegemony


The US and Australia have signed an agreement aimed at boosting supplies of rare earths and other critical minerals, as the Trump administration looks for ways to counter China’s dominance of the market.
Australian Prime Minister Anthony Albanese said the deal would support $8.5bn (£6.3bn) of “ready-to-go” projects that would expand his country’s mining and processing capabilities.
That includes $1 billion to be invested by both countries in projects in the US and Australia over the next six months, the framework text said.
The US and Australia have been working on these issues since Trump’s first term, but Albanese said the latest agreement would take the partnership “to the next level”.
China currently controls about 70% of rare earth mining and 90% of the processing of the material, which is found in everything from defense equipment to computer chips and cars.
U.S. companies are heavily dependent on the material, making them vulnerable this year as China moves to restrict access to supplies in response to new U.S. tariffs and other tensions.
Albanese said the agreement aims to accelerate investment in three types of projects, including US investment in processing facilities in Australia.
The two countries agreed to work together on issues such as pricing, permits and regulations for government review of sales of companies and projects in the sector.
The US separately said it would invest in the construction of a 100 tonne-per-year advanced gallium refinery in Western Australia and is preparing to provide some $2.2 billion in financing to advance critical mineral projects through its Export-Import Bank.
The Trump administration has announced a series of investments in recent months in companies such as US rare earth miner MP Materials and Canada’s Trilogy Metals and Lithium America, which have projects in the US.
In return for the support, he has received ownership rights in the companies.
Ahead of the meeting, shares in Australian companies such as Lynas Rare Earths jumped on hopes of further support. Lynas was awarded a contract by the US Department of Defense a few years ago and is working on a project in Texas.
The framework published by the White House was light on details, reflecting sensitive issues.
Australia is a major source of critical minerals but, like the US, it relies on China for the processing necessary to turn them into materials that companies can use.
China is also Australia’s largest trading partner.
Post Comment