UPDATE: A groundbreaking $4.6 billion deal between former President Donald Trump and Australian Prime Minister Anthony Albanese has just been announced, promising to supercharge Australia’s rare earth sector. This urgent investment will establish Australia as a key player in the global effort to counter China’s dominance over essential minerals used in defense and renewable technologies.
The deal, finalized overnight in Washington, will see both nations inject $1 billion each into critical minerals projects over the next six months, which includes $200 million for a gallium plant in West Australia owned by Alcoa and $100 million for the Arafura Nolans rare earths mine, backed by Gina Rinehart.
Chief executives in Australia’s critical minerals sector are expressing unprecedented optimism. Darryl Cuzzubbo, CEO of Arafura Rare Earths, stated, “The pace the US is moving, I’ve never seen anything like it, it’s truly remarkable.” This sentiment reflects a significant shift in investment dynamics as Australia seeks to enhance its role on the world stage.
The agreement includes measures that guarantee price floors for new producers and restrict asset sales on security grounds, likely provoking reactions from Beijing. China currently processes up to 90 percent of the world’s rare earths and is a major player in refining lithium, graphite, and gallium, crucial for everything from smartphones to fighter jets.
“Prosperity is an essential commodity for any government in Australia; security equally so,” said Warwick Smith, former head of the Australia-China Business Council. “We must embrace and extend all opportunities in our national interest to secure sustained prosperity. Rare earths is a new opportunity.”
This development comes just days before Chinese President Xi Jinping is scheduled to meet Trump at the APEC leaders summit in South Korea. The discussions will focus on a new deal aimed at resolving the ongoing tariff conflict, partly fueled by China’s critical minerals processing dominance.
Albanese highlighted the deal’s potential, saying it represents a robust $8.5 billion pipeline of projects ready for rapid execution. This will secure a long-term supply of crucial minerals for the US, particularly in defense and electric vehicle manufacturing. “In about a year, we’ll have so much critical minerals and rare earths that you won’t know what to do with them,” Trump remarked during the signing.
The US-Australia Critical Minerals and Rare Earths Framework aims to accelerate the development of mines and processing facilities in Australia, with plans for a strategic reserve to be operational before 2027. West Australian Premier Roger Cook dismissed concerns over potential provocations to China, asserting that Australia is merely responding to market demands, not engaging in price manipulation.
With this agreement, Arafura is primed to expedite the construction of its Northern Territory processing facility, securing vital funding and paving the way for production of rare earth oxides used in electric vehicles. The anticipated $100 million investment from the Australian government, alongside up to $300 million from the US, is set to transform the landscape.
Alcoa also stands to gain significantly, with its gallium refinery project receiving $200 million from the Australian government, potentially becoming one of the largest downstream processors in the region. Chief Operating Officer Matthew Reed expressed confidence in securing US funding for this critical project.
Industry leaders are optimistic about the ripple effects of this agreement. David Fraser, founder of RZ Minerals, noted that the deal would enable his company to develop a minerals separation plant within a year, addressing the growing market demand for critical minerals.
The US-Australia partnership marks a pivotal moment for both nations, fostering collaboration in an area of strategic importance. As the world grapples with supply chain challenges and shifting geopolitical dynamics, the implications of this deal extend far beyond national borders, promising to reshape the global minerals landscape.
Stay tuned for further updates as this story develops and the impacts of this landmark agreement unfold.
