The United States and Australia formalized a landmark critical minerals agreement on Monday, establishing an estimated $8.5 billion pipeline of projects designed to bolster Western supply chains and reduce global dependence on materials controlled by China.
The “Critical Minerals Framework,” signed by President Donald Trump and Australian Prime Minister Anthony Albanese at the White House, immediately commits billions toward developing Australian and American mining and processing capabilities for materials vital to defense systems, high-tech manufacturing, and clean energy.
The agreement comes as Beijing continues to tighten export controls on rare earth minerals, a strategy the Trump administration has characterized as hostile. Rare earth metals are indispensable components in products ranging from electric vehicles and semiconductors to motors, brakes, and advanced military aircraft like fighter jets.
Multi-billion dollar investment pledge
The cornerstone of the framework is a massive financial commitment to accelerate projects. The White House summary states that the two governments intend to jointly invest a total of more than $3 billion in critical mineral projects over the next six months, aiming to unlock an estimated $53 billion worth of recoverable resources.
Prime Minister Albanese described the overall undertaking as an “$8.5 billion dollar pipeline that we have ready to go,” emphasizing the immediate availability of projects for investment.
Further commitments include significant financing and development support from U.S. government agencies:
- The U.S. Export-Import Bank announced seven Letters of Interest totaling more than $2.2 billion in financing for critical minerals projects in Australia, potentially unlocking up to $5 billion in total investment.
- The U.S. Defense Department also agreed to invest in the construction of a new gallium refinery in Western Australia. Gallium, a crucial component for advanced defense systems, was subject to export restrictions imposed by China last December. The new facility is expected to extract 100 tons per year.
Speaking about the partnership, President Trump projected a rapid expansion of supply. “In about a year from now, we’ll have so much critical minerals and rare earths that you won’t know what to do with them,” Trump said. “We’re really working on anything having to do with military, military protection, military ships, vehicles, guns, ammunition, everything.”
Securing the Global Economy
The formalization of the deal is seen by Washington as an essential step in countering China’s traditional dominance in the critical mineral sector, a control that U.S. officials say has been weaponized.
Kevin Hassett, Trump’s National Economic Council director, framed the agreement in terms of risk mitigation for the global marketplace. “Australia is really, really going to be helpful in the effort to take the global economy and make it less risky, less exposed to the kind of rare earth extortion that we’re seeing from the Chinese,” Hassett said.
Prime Minister Albanese underscored the strategic significance for both nations, stating, “Increasing the security for the region and our economic relationship is so important.” He added, “Today’s agreement on critical minerals and rare earths is just taking it to the next level, seizing those opportunities which are before us.”
The agreement is also significant for Australian mining companies. Shares of several critical metals and rare earths companies on the Australian Securities Exchange surged following the announcement, with Lynas Rare Earths, Iluka Resources, Pilbara Minerals, VHM, and Latrobe Magnesium all posting gains.
Treaty is not legally binding
Despite the high-level pronouncements and major investment commitments, the minerals agreement has little binding language in it. The White House’s fact sheet said the two countries “intend to” make the investments.
Albanese’s office issued a clarifying statement regarding the document’s legal status. The minerals and security agreement is described as an “action plan” that “does not constitute or create any legally binding or enforceable obligations, express or implied.”
The framework is, however, expected to include key mechanisms long sought by Western miners to guard against market manipulation, notably the commitment by both countries to set a minimum price floor for certain critical minerals.
China’s Foreign Ministry spokesperson Guo Jiakun responded to the deal on Tuesday, stating that “Key mineral resource countries should play an active role in ensuring the safety and stability of the industrial and supply chain, and ensure normal economic and trade cooperation.”
Defense and Indo-Pacific Security
The two leaders also affirmed a mutual commitment to defense cooperation, particularly the trilateral AUKUS security partnership between Australia, the United States, and Britain. The agreement focuses on providing Australia with nuclear-powered submarines, a capability Canberra views as crucial for national security amid increased regional tensions.
While the Trump administration had previously raised doubts about the future of the AUKUS deal, the President appeared to commit to its continuation on Monday. “Our defense and security partnership with AUKUS is so important for us,” Albanese said.
The meeting occurred on a day when Australia reported that a Chinese fighter jet had released flares dangerously close to an Australian Air Force aircraft conducting patrols over the South China Sea. Despite this incident and the focus on countering China’s economic leverage, President Trump offered an optimistic assessment of future diplomatic engagement.
“I think China’s been very respectful to us,” Trump said, while also noting that the submarine deal could help deter China in the Taiwan Strait.
Trump also stated his belief that he would secure a trade deal with China’s leader, Xi Jinping, during a scheduled trip to Asia this month.