U.S. President Donald Trump and Australian Prime Minister Anthony Albanesesign a critical minerals agreement at the White House. Image credit: Discovery Alert
(The Post News) – The United States and Australia have agreed on an $8.5 billion critical minerals deal that is designed to break China’s grip on rare earth supplies. The deal was signed Monday at the White House by U.S. President Donald Trump and Australian Prime Minister Anthony Albanese, gaining momentum for a months-long push to lock down supply chains for critical materials used in electric vehicles, military technology, and consumer electronics.
As in about a year’s time from now, we’re going to have so much critical mineral and rare earth you won’t know what to do with them,” Trump said at a press conference, as he announced the advance towards Western independence.
Albanese called the deal a “pipeline we have ready to go,” and said it would take the relationship between the U.S. and Australia “to the next level.”
Deal Targets China’s Supply Chain Leverage
The agreement comes in the wake of China’s narrowed export restrictions on rare earths, including magnets containing trace amounts of Chinese-origin materials. In return, Trump is to levy a 100% tariff on Chinese imports of rare earths next month.
National Economic Council Director Kevin Hassett was in praise of Australia’s mining capacity and called the alliance a major step towards addressing what he labelled “rare earth extortion” by Beijing.
“Australia has one of the best mining ecosystems in the world,” Hassett said. “And we’re tapping into that strength to protect global supply chains.”
Under the deal:
Both nations will invest $1 billion each over the next six months. Projects will encompass joint U.S.-Australia projects, Australia-only ventures, and trilateral ventures with Japan. The Pentagon announced plans to build a gallium refinery in Western Australia. The U.S. Export-Import Bank committed $2.2 billion of finance for seven Australian ventures, including Northern Minerals, Latrobe Magnesium, and Sunrise Energy Metals.
White House aides say the investments would unlock $53 billion in mineral resources.
While the summit overall went smoothly, there was a cringe moment when Trump addressed Australian Ambassador Kevin Rudd, a one-time prime minister and former Trump critic.
“I don’t like you either, and I probably never will,” Trump stated after musing about Rudd’s 2020 tweet labelling him “the most destructive president in history.”
Rudd responded serenely, “Prior to arriving at this position, Mr. President.”
Trump also revived support for the $239 billion AUKUS submarine deal signed under the Biden administration. The deal will have Australia purchase nuclear-powered U.S.-manufactured submarines by 2032 and begin co-producing with the U.K. shortly thereafter.
Navy Secretary John Phelan noted the U.S., U.K., and Australia are working to resolve prior ambiguities in the agreement, with Australia contributing $2 billion this year to boost U.S. submarine manufacturing capacity.
“We’re going full steam ahead,” Trump said. “No more clarifications needed.”
Long-Term Strategy to Outpace China
Mining industry leaders welcomed the deal but emphasized the long road ahead.
“China possesses a virtual 40-year head start,” said Cove Capital CEO Pini Althaus. “We have to protect Western miners with price supports and investments in order to remain competitive.”
It is not possible for Australia to fulfill all U.S. demand, said Althaus. He urged further investment in Central Asia, where Soviet-era infrastructure could accelerate the growth of mines.
Trump’s summit with Chinese President Xi Jinping in South Korea next week will be overshadowed by trade and critical minerals. In the meantime, the U.S.-Australia minerals deal represents a clear strategic path towards diversification.
“Americans and Australians stand together,” Albanese declared. “We are constructing something that will endure beyond this moment, an alliance for a safer, more secure, and more sustainable world.”.
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