U.S. Seeks to Upend China’s Rare Earth Metals Dominance with Aussie Deal

President Donald Trump’s rare earths agreement with Australian Prime Minister Anthony Albanese is a counter to China’s dominance.

Additional funding and policy support are being considered for the critical-minerals sector. (Photo: Iluka Resources) 

The plan would give the US access to Australian rare earths and critical minerals and allow Australia to expand its capacity to process rare earths, Matt Peterson, Al Root, and Janet H. Cho reported for Barron’s Daily.

Albanese was expected to pitch Australian mining companies for US investment. He said there would be $1 billion contributed from Australia and the US over the next six months for projects that are immediately available.

The deal also aims for joint ventures, including one with Pittsburgh-based Alcoa.

Rare earth materials are used in everything from consumer electronics to vehicles, batteries, and defense systems, and the US wants to secure a better supply chain and reduce its reliance on China, which has imposed export controls on its rare earths—sparking another shock in the US-China trade war.

Cleveland-Cliffs CEO Lourenço Gonçalves said the importance of rare earths has driven the steelmaker to refocus on potential rare earth mines in Michigan and Minnesota that show signs of rare earth metals.

If successful, Cleveland-Cliffs would be aligned with the Trump administration’s strategy of seeking critical material independence.

“US manufacturing shouldn’t rely on China or any other foreign nation for essential minerals, and Cliffs intends to be part of the solution,” Gonçalves said.

Raymond James analyst Ellen Ehrnrooth said Congress is actively considering additional funding and policy support for the critical-minerals sector. William Blair analyst Neal Dingmann believes the administration could be weighing an investment in USA Rare Earth.