The United States and Australia on Monday signed an $8.5 billion agreement on critical minerals at the White House, as Washington seeks to strengthen supply chains and reduce reliance on China’s dominance in rare earth exports.
The deal was signed by US President Donald Trump and Australian Prime Minister Anthony Albanese following months of negotiations aimed at boosting cooperation in the mining and refining of rare earth elements.
“In about a year from now, we’ll have so much critical mineral and rare earth that you won’t know what to do with them,” President Trump said at the signing ceremony. “They’ll be worth $2.”
Prime Minister Albanese said the agreement “takes the US-Australia relationship to the next level,” describing it as a major step toward diversifying global supply chains.
The announcement comes weeks after Beijing introduced new export restrictions requiring foreign companies to obtain approval from the Chinese government to ship magnets containing even trace amounts of rare-earth materials that originated from China or used Chinese technology.
White House National Economic Council Director Kevin Hassett said Australia’s robust mining industry and large rare earth reserves would be “critical to making the global economy less exposed to Chinese extortion.”
Under the new agreement, the two countries will jointly invest over $3 billion in critical mineral projects within the next six months, according to Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies in Washington.
Mining expert Pini Althaus, CEO of Cove Capital, said the deal must include price protections similar to those recently promised by the US government to prevent China from manipulating global prices — a tactic Beijing has historically used to drive competitors out of business.
While the agreement could give US firms access to existing Australian production, experts note that reducing China’s market dominance will take years, if not decades.
Althaus added that the United States must continue investing in mining projects at home and in friendly nations, such as those in Central Asia, which possess untapped reserves and infrastructure dating back to the Soviet era.
“China has almost a 40-year head start,” he said. “It will take at least a couple of decades for the US and its allies to meet their own supply chain demands.”
The Trump-Albanese meeting also covered defense cooperation under the AUKUS security pact with the United Kingdom. Both leaders reaffirmed the importance of strengthening defense and technology ties to ensure a “free and open Indo-Pacific.”
Albanese’s visit comes ahead of Trump’s expected meeting with Chinese President Xi Jinping in South Korea later this month.
Source: AP