The United States and Australia have signed a critical-minerals pact aimed at easing China’s grip on supplies of rare earths and other strategic inputs, with each country committing at least $1 billion to projects over the next six months and U.S. export credit backing lined up for multiple Australian ventures.

The agreement, announced at the White House by U.S. President Donald Trump and Australian Prime Minister Anthony Albanese, also advances plans for an advanced gallium refinery in Western Australia—positioned to supply semiconductor and defence supply chains—with joint support from both governments. The U.S. Export-Import Bank (EXIM) issued seven non-binding letters of interest totaling more than $2.2 billion to firms including Arafura Rare Earths, Northern Minerals and Latrobe Magnesium. 

A framework released alongside the deal highlights a pipeline of roughly $8.5 billion (A$13 billion) in “ready-to-go” projects spanning mining, separation and processing, and sets up closer coordination on permitting, pricing transparency and reviews of strategic asset sales. The leaders also reaffirmed support for the AUKUS security partnership following a recent policy review in Washington. 

Financial markets reacted swiftly. Shares of Australian rare-earth and critical-minerals producers rallied after the announcement, with gains reported across names such as Arafura Rare Earths and Iluka Resources as investors priced in new funding and offtake options. 

The pact underscores a push to diversify supply chains away from Beijing. China accounts for about 70% of global rare-earth mine output and nearly 90% of processing capacity—dominance that has sharpened vulnerabilities for manufacturers of everything from EV motors and wind turbines to precision-guided munitions. 

Beyond rare earths, the U.S. said it would help finance a 100-tonnes-per-year gallium plant tied to Alcoa in Western Australia, a facility that could eventually supply a meaningful share of global demand for a metal critical to compound semiconductors. Australia will provide concessional equity with offtake rights, while Alcoa partners with Japan Australia Gallium Associates on development. 

The two governments framed the accord as the next phase of a years-long effort to deepen minerals cooperation—building on earlier compacts and recent U.S. financing moves for projects in Australia and North America—to bolster resilience against export controls and geopolitical shocks. 

Source: BBC

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