U.S., Australia Seal $8.5B Rare-Earth Deal to Counter China

The United States and Australia have sealed an $8.5 billion agreement to boost production of rare earths and other critical minerals, in a bid to lessen global reliance on China.

Signed at the White House by President Donald Trump and Prime Minister Anthony Albanese, the deal launches a joint pipeline of mining and processing projects designed to secure supply chains vital to clean-energy and defense industries.

Strategic Goals and Scope of the Agreement

The White House framework outlines a $1 billion co-investment for projects in both nations within six months, with Albanese saying it will back “ready-to-go ventures” in extraction, refining, and value-added manufacturing.

Australia, rich in over 50 critical minerals such as lithium, cobalt, and rare earths, aims to boost supply chains for batteries and semiconductors. Trump called the deal “taking our alliance to the next level,” saying it was negotiated to protect industries from Chinese export controls.

China’s Grip and Market Reaction

Beijing’s tighter export approvals for magnets with Chinese rare earths have raised concerns over supply-chain risks, as China controls about 70% of global mining and 90% of processing. Following the announcement, shares in Australian miners Arafura Rare Earths and Iluka Resources rose on expectations of U.S. investment.

Washington also pledged funding for a 100-tonne-per-year gallium refinery in Western Australia and $2.2 billion in Export-Import Bank credit to speed up new projects.

Wider Strategic Context

The meeting comes ahead of Trump’s planned talks with Chinese President Xi Jinping in South Korea later this month. While the White House calls the pact purely economic, analysts say it reinforces AUKUS’s resource base and supports U.S. efforts to rebuild industrial capacity.

Albanese said the deal “shows how allies can meet global challenges the Australian way — by building for the future,” adding that it also includes commitments on pricing, permitting, and foreign investment scrutiny in the minerals sector.