U.S. and Australia sign $8.5 billion critical minerals agreement

Photo: REUTERS/Kevin Lamarque, photo editor: Dastan Shanay

The U.S. and Australia have signed a critical minerals partnership designed to reduce U.S. reliance on China and boost investments in Australian mining sector, according to Reuters.

Under the agreement, announced by U.S. President Donald Trump and Australian Prime Minister Anthony Albanese, both nations will invest $1 billion each over the next six months in mining and processing projects. The deal establishes a minimum price floor for critical minerals and outlines an $8.5 billion investment pipeline for new developments over an unspecified timeline.

According to a joint statement, the initiative targets deposits valued at about $53 billion, though specific minerals and project locations were not disclosed.

Shortly after the agreement, the U.S. Export-Import Bank (EXIM) issued over $2.2 billion in preliminary funding commitments for seven Australian companies: Arafura Rare Earths, Northern Minerals, Graphinex, Latrobe Magnesium, VHM, RZ Resources and Sunrise Energy Metals. These projects will focus on materials vital for defense, aerospace, communications and advanced manufacturing.

EXIM stated the investments are expected to support efforts to rebuild U.S. industrial capacity and strengthen Western supply chain resilience.

China has the largest global reserves of critical minerals. Moreover, it also controls large deposits of cobalt and other minerals in Africa as the global demand for rare earth elements such as lithium and nickel, widely used in electric vehicles, aircraft engines and military systems, is surging.

In 2024, China curbed exports of gallium, used in electronics and semiconductors, to the U.S., and now the U.S. Department of Defense plans to establish a gallium refinery in Western Australia.