US President Donald Trump on Monday signed a landmark pact with visiting Australian Prime Minister Anthony Albanese to boost the US’ access to rare earths and other critical minerals, an effort to counter China’s tight grip on the supply chains of key metals.
The two governments are to jointly invest in a swathe of mines and processing projects in Australia to boost production of commodities used in advanced technologies from electric vehicles to semiconductors and fighter planes.
Australia has an US$8.5 billion “pipeline that we have ready to go,” Albanese said at a meeting between the two leaders at the White House.
Photo: AP
“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 said.
The US has been locked in a rare earths tussle with China since Beijing fought back against Trump’s trade offensive earlier this year, imposing export curbs on the materials. It has since expanded those restrictions. The prospect of even tighter supply has injected momentum into a US push to build alternative production capacity, even as industry executives and analysts caution that replacing a vast network of mines and refining would not be swift.
The leaders said the agreement would include Australian processing of rare earths and other critical minerals, with Albanese adding that Australia had “capacity” to expand those efforts.
The US and Australia pledged to protect their domestic markets from “unfair trade practices,” including through adopting trading standards that involve “price floors or similar measures,” according to the text of the deal circulated by Albanese’s office.
The deal is to begin with the US and Australia each paying more than US$1 billion over the next six months for initial projects, with some further projects in both countries, Albanese said.
The document did not include details on which entities would provide that financing.
The Pentagon would help fund the construction of the planned 100 tonne-a-year Alcoa-Sojitz gallium refinery in Western Australia as part of the deal, the White House said.
The Export-Import Bank of the US is also issuing letters of interest for more than US$2.2 billion in financing on critical mineral projects.
Asked about the pact, Chinese Ministry of Foreign Affairs spokesman Guo Jiakun (郭嘉昆) said that “the formation of global production and supply chains is the result of market forces and business decisions.”
“Countries rich in critical mineral resources should play an active role in ensuring the security and stability of industrial and supply chains, and in safeguarding normal economic and trade cooperation,” he told a regular news briefing in Beijing.
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