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The United States and Australia on Monday unveiled a landmark agreement to boost critical minerals and rare earths projects, aiming to reduce reliance on China and strengthen defense and tech supply chains. The deal includes projects worth up to $8.5 billion, Australian Prime Minister Anthony Albanese said at the White House. “There will be $1 billion contributed from Australia and the United States over the next six months with projects that are immediately available,” Albanese told reporters, according to CNBC. However, the White House later released a fact sheet stating the countries will invest more than $3 billion in critical mineral projects over the next six months. It also announced that the Export-Import Bank of the United States will issue seven letters of interest totaling more than $2.2 billion in financing, potentially unlocking up to $5 billion in total investment. The framework agreement comes as the Trump administration works to build a rare earth and critical mineral supply chain outside of China. Rare earths are used to produce high-performance magnets that are essential in defense systems, semiconductors, robotics, and electric vehicles. China currently dominates the global rare earths market, particularly in refining and processing, leaving the U.S. dependent on Beijing for critical inputs. Joint projects drive supply Albanese said the plan includes three groups of joint projects with participation from companies such as Alcoa. “What we’re trying to do here is to take the opportunities which are there,” he said. The U.S. will invest in rare earths processing in Australia, and one project will involve a trilateral venture with Japan. The Pentagon is also committing to a gallium refinery in Western Australia with a 100 metric ton per year capacity. Alcoa had announced in August it was exploring a gallium project with Japan at one of its alumina refineries in Western Australia. “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,” Trump told reporters. The president said the U.S. is also coordinating with other nations to build a supply chain independent of China. China-U.S. trade tensions The timing of the deal coincides with growing friction between Washington and Beijing. China imposed strict export controls on rare earths earlier this month, intensifying fears of supply disruptions and raising the prospect of a renewed trade war. Trump threatened 100% tariffs on Chinese goods starting Nov. 1 if Beijing did not relent. “They threatened us with rare earths, and I threatened them with tariffs, but I could also threaten them with many other things, like airplanes,” Trump said Monday. The U.S. president also confirmed plans to meet Chinese President Xi Jinping in South Korea later this month and visit China early next year. “We had presidents that allowed China and other countries get away with murder,” Trump said. “We’re not going to allow that, but we’re going to have a fair deal. I want to be good to China. I love my relationship with President Xi. We have a great relationship.” The deal highlights Washington’s push to secure critical minerals and rare earths outside China, a move aimed at strengthening domestic manufacturing, defense capabilities, and emerging technology sectors that rely on rare earth magnets.
