Australia-US rare earths deal holds major importance for Trump

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Prime Minister Anthony Albanese and US President Donald Trump have signed a major $13 billion (US$8.5 billion) agreement to boost production of critical minerals and rare earths, aiming to reduce China’s dominance in the market.

Under the new US–Australia Critical Minerals Framework, both nations will invest US$1 billion each over the next six months to launch new mining and processing projects.

Albanese called the deal a “pipeline ready to go,” while Trump praised the partnership, saying it would secure vital resources for industries from clean energy to defence. The move follows China’s recent decision to tighten its rare earth exports — a step that heightened tensions with Washington.

What are rare earths?

Rare earth elements — 17 metals including scandium, yttrium and lanthanides — are crucial in technologies like smartphones, electric vehicles, wind turbines, LED screens, and military hardware such as fighter jets and missiles. Although not truly “rare,” they are costly and environmentally challenging to extract.

Why Australia matters

Australia is seen as a reliable and resource-rich partner, offering large reserves, strong mining expertise, and a stable investment environment. Currently, China produces about 61% of the world’s rare earths and handles over 90% of global processing, according to the International Energy Agency.

Challenges ahead

Experts warn that while billions are being invested — including $3.2 billion from Australian agencies and $2.9 billion from allied countries — more funding is needed for refining and magnet production outside China. Without it, Australian producers could still be tied to Chinese buyers.

Environmental concerns also remain, with calls for stronger waste management and partnerships with First Nations communities as Australia expands its rare earth operations.

This landmark deal marks a key step toward reshaping global supply chains and strengthening the US–Australia alliance in the race for critical minerals.

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