US and Australia Sign $2bn Critical Minerals Deal

The United States and Australia have signed a wide-ranging critical minerals agreement aimed at countering China’s dominance of the sector.

Under the deal, signed by US President Donald Trump and Australian Prime Minister Anthony Albanese, each country pledged to invest at least $1bn over the next six months in mining and processing projects. They will also establish a price floor for critical minerals, a step long sought by Western miners.

The US Export-Import Bank said it had issued seven letters of interest totaling more than $2.2bn to support US-aligned critical minerals projects in Australia.

Shares in several companies rose sharply after the announcement. Arafura Rare Earths gained 8%, Northern Minerals 11%, Latrobe Magnesium 15% and VHM 20%, although Sunrise Energy Metals traded lower.

The two governments will also support a plan by US aluminum producer Alcoa to build a gallium plant alongside its alumina refinery in Western Australia. The facility could supply up to 10% of global gallium demand.

Gallium, recovered as a byproduct of alumina refining, is a critical mineral for the technology sector, particularly the semiconductor and defense industries.

Australia will provide up to $200m in concessional equity financing for the project, including offtake rights, while the US will make a separate equity investment with similar rights.

Once the feasibility study is complete, the US and Australian governments and Alcoa are expected to establish a special-purpose vehicle. It would then enter a joint venture with Japan Australia Gallium Associates to build the plant, which Alcoa would operate.

(Reuters, Max)