After China’s stick, the US already has a new partner to obtain rare earths

President Donald Trump and Australian Prime Minister Anthony Albanese have signed a critical minerals deal with the potential to create projects worth up to $8.5 billion, according to says the NYT. The pact responds directly to the recent restrictions that China has imposed on its exports of rare eartha movement that Trump rated as “sinister and hostile.”

Why it is important. Critical minerals and rare earths are essential materials for manufacturing everything from semiconductors to engines, brakes and military fighters. China currently dominates global supply of these resources, which makes any restriction on their part a direct threat to Western production chains. And therefore, diversifying the sources of these types of elements has become a strategic priority for both the Trump administration and the previous Biden administration.

Agreement with Australia. According to the summary provided by the White House, the agreement contemplate that the United States and Australia jointly invest $3 billion in critical minerals projects over the next six months. For its part, Australia is committed to investing billions in American defense companies. The US Department of Defense will also participate in the construction of a new refinery in Australia capable of extracting 100 tons of gallium metal per year.

“In about a year, we will have so many critical minerals and rare earths that we won’t know what to do with them,” claimed Trump optimistically during the meeting with Albanese. The Australian Prime Minister, for his part, stressed that this agreement on critical minerals takes the economic and security relationship between both countries “to the next level.”

Plan of action. Albanese’s office has made clear that the agreement functions as an “action plan” that “does not constitute or create legally binding obligations.” This contrasts with the public statements of both leaders, who seemed very enthusiastic on camera about the agreement, according to point the middle. The Australian ambassador to the United States, Kevin Rudd, already had advanced in August that Australia was “ready and able to help” diversify US supply chains, recalling that manufacturing a single Virginia-class submarine requires approximately 4.5 short tons of critical minerals and rare earth elements.

This agreement also confirms Trump’s support for the AUKUS pactthe trilateral defense alliance between the United States, the United Kingdom and Australia announced in 2021 under the Biden administration. Trump, who had undergone a thorough review of AUKUS since July, said plans to deliver US-made submarines to Canberra were “moving forward very quickly.” However, he acknowledged that the project had progressed “too slowly” so far. US Navy Secretary John Phelan declared that the goal is to “improve the original AUKUS framework for all three parties and clarify some of the ambiguity that was in the previous agreement.”

China’s door is not closed yet. With this move, the United States is closer to having access to these critical minerals from different parts of the world, reducing its dependence on China. In recent months, the US government has committed 75 million dollars to invest in Ukraine’s mineral reserves and has backed railway projects in Angola that will facilitate access to minerals in central Africa. Despite tensions with Beijing, Trump stated on Monday that he believes it is possible to reach a trade deal with China during his upcoming trip to Asia this month, where he is expected to meet with Chinese leader Xi Jinping.

Cover image | Paul-Alain Hunt and Brandon Mowinkel

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