WASHINGTON DC: The United States and Australia have formalized an agreement aimed at boosting supplies of rare earths and other critical minerals.

The deal, announced on Monday, is part of ongoing efforts to reduce reliance on China, which currently controls about 70% of rare earths mining and 90% of global processing.

Australian Prime Minister Anthony Albanese said the agreement will support an $8.5 billion (A$13 billion; £6.3 billion) pipeline of “ready-to-go” projects designed to expand Australia’s mining and processing capacity.

According to the framework, the two countries will invest $1 billion in projects across the US and Australia over the next six months.

Albanese described the agreement as taking the partnership to the “next level,” building on collaborations that have been in place since former President Donald Trump’s first term.

During the signing ceremony at the White House in Washington, DC, Trump also commented on Australia’s multi-billion-dollar submarine deal with the US and UK, known as Aukus, saying it was “full steam ahead.”

Earlier concerns that the deal might be limited under the “America First” agenda were addressed, with Trump confirming that Australia would indeed receive the submarines.

Rare earths are essential for products ranging from defense equipment to computer chips and electric vehicles.
US companies have faced supply vulnerabilities amid China’s restrictions following new tariffs and heightened geopolitical tensions this year.

Australian rare earths producers saw immediate gains after the announcement. Perth-based Arafura Rare Earths shares rose approximately 7.7%, while Iluka Resources gained more than 3%.

The agreement aims to accelerate investments in three key areas, including US-funded processing facilities in Australia.
The countries also plan to collaborate on pricing, permitting, and government review processes for sales of companies and projects in the critical minerals sector.

The US separately announced plans to invest in a 100-tonnes-per-year advanced gallium refinery in Western Australia.

Additionally, its Export-Import Bank is preparing around $2.2 billion in financing to support critical minerals projects.