U.S. and Australia Forge Critical Minerals Partnership with Billions in โInvestment
A new agreementโข signed Monday between the United States and Australia aims to bolsterโฃ critical minerals productionโ and reduce reliance on China, with potential projects valued up to โ$8.5 billion. Theโค deal, inked during a meeting between President Donald Trump and Australian Prime โMinister Anthony Albanese at the White House, focuses onโ strengthening the supply chain for essential minerals.
Albanese initially stated the agreement includes a combined $1 billion investment from bothโ countriesโข over the next six months for immediately actionable projects. However, a subsequent White House fact sheet detailed a more extensive investment exceeding $3 billion in critical โคmineral projectsโฃ within the same timeframe. Theโ fact sheet โขalso announced the Export-Import Bank of the United โStates will issue lettersโค of interest for over $2.2 billion โคin financing, potentially unlocking a total of $5 billion in investment. CNBC has sought clarification fromโค the White House regarding โthe discrepancy in figures.
The partnership will involve three groups of joint projects, including participation from companiesโ like Alcoa. The U.S. will invest in rare earths processing facilities within โขAustralia, and one project will be a collaborative effort โinvolving Australia, the U.S.,โ and โฃJapan.
Specifically,โ the U.S. willโ support the construction of a gallium refinery in Westernโข Australia, capable of โproducing 100 metric tons annually. โฃAlcoa is already exploring the feasibility of aโ gallium project at its alumina refinery in Western australia, in partnershipโ with Japan, as โannounced in August.
This agreement comes as theโ U.S. seeks to lessen its โคdependence on China, which currently dominates the global rare earths supply chain, particularly โขin refining and processing. Australia is one of theโค few nations outside of China with rare earths processing capabilities and is a key U.S. ally.
Trump expressed optimism about the future, stating, “In about a yearโ from now, we’ll have so much critical mineral and rare earths thatโค you won’t know what to doโค with โthem.” He โขalso emphasized the U.S.’s broader strategy to build a diversifiedโฃ supply chain independent of China.
Escalating China-U.S. tensions
The agreement follows recentโ tensions with China, which announced export controls on rare earths earlier this month, raising the specterโ of a renewed โtrade โwar. Trump has threatened to impose 100% โtariffs on Chinese goods starting November 1st, or sooner, โif China doesn’tโ alter its course.
Trump reiterated his willingness to use tariffs asโ leverage, stating he could โalso threatenโฃ restrictions on other Chinese exports, such as airplanes.โ He also confirmed plans to meet with Chinese President Xi Jinping in South Korea later this month and intends to visit China early next year.
Despite the โtough rhetoric, Trump โemphasized โhis desire for a fair trade deal with โฃChina, noting, “Weโ had presidentsโค that allowed china and other countries get away with โคmurderโฆWe’re notโข going โคto allow that, but we’re going to โhave a fair deal.I want to be good to โchina. I love my relationship with President Xi. We haveโฃ a great relationship.”
