Washington: The United States and Australia have signed an $8.5 billion agreement to boost the production and processing of critical minerals, a move aimed at countering China’s overwhelming control of the global supply chain for rare earth elements.
President Donald Trump and Australian Prime Minister Anthony Albanese announced the deal during a bilateral summit at the White House, marking a major step toward strengthening supply security for essential materials used in electric vehicles, defense technology, and renewable energy systems.
Under the pact, both countries will each invest $1 billion within the next six months to develop mining and processing facilities. The agreement also includes a minimum price guarantee for key minerals and promises to simplify permitting processes for mining operations.
“We’re going to be producing so much critical mineral and rare earths that you won’t know what to do with them,” Trump said, emphasizing that the deal would help the U.S. achieve mineral independence within a year.
The partnership extends beyond production to include geological mapping, mineral recycling, and tighter controls on foreign particularly Chinese ownership of strategic mineral assets. Australia has also agreed to make shares of its planned strategic mineral reserve available to allied nations, including the United Kingdom.
China currently dominates the rare earths market, accounting for about 70% of global production. In 2024, it produced roughly 270,000 tons of rare earths, compared with 45,000 tons from the U.S. and 13,000 tons from Australia.
Analysts view the deal as a crucial step in diversifying the global supply chain and reducing reliance on China, which has previously imposed export restrictions on critical materials. However, they caution that scaling up mining and processing capacity will take time and require significant environmental and logistical coordination.
The U.S.-Australia minerals partnership underscores a broader effort among Western allies to strengthen economic security and ensure stable access to materials vital for the technologies of the future.