Australia and the United States have recently formalised a new industrial partnership to help build secure, long-term supply chains for materials that are essential to clean energy, defence systems, and advanced manufacturing.
Prime Minister Anthony Albanese and President Donald Trump signed the US and Australia Critical Minerals and Rare Earths Framework in Washington on 20 and 21 October 2025. It represents the most detailed and capital supported critical minerals agreement either country has announced to date.
The framework is intended to address pricing volatility, supply concentration, and geopolitical risk associated with global critical minerals supply, particularly where processing and refining capacity is currently concentrated in China. The framework sets out a coordinated approach to financing, offtake arrangements (agreements to purchase part of a project’s future output), and strategic stockpiling, with the goal of reducing commercial and policy risk for projects in both countries.
What’s in the deal?
Capital commitments
The United States and Australia have committed to invest at least US$1 billion each over the next six months in support of a priority project pipeline valued at up to US$8.5 billion. These projects span both countries and focus on critical minerals.
Funding will be directed to mining, refining, material separation, and recycling that aligns with shared supply chain and national interest goals.
Policy tools
Price support mechanisms, including the potential use of price floors and offtake agreements to stabilise markets.
Strategic stockpiles of critical materials to reduce reliance on foreign supply during disruptions.
Faster permitting and development approvals.
Screening of asset sales to prevent strategic takeovers by adversarial entities.
A Rapid Response Group, jointly led by the US Department of Energy and Australia’s Resources Minister, to triage bottlenecks and prioritise project delivery.
What projects are first in line?
Two Australian projects have been formally identified in the first phase of the framework:
Gallium Recovery – Alcoa and Sojitz (Wagerup, Western Australia)
A trilateral initiative involving Australia, the United States and Japan.
Aims to supply up to 10% of global gallium demand, a material used in semiconductors and defence technologies.
Australia is committing up to US$200 million in equity finance, with planned US co-investment and Japanese technology collaboration.
Rare Earth Project – Arafura Nolans (Northern Territory)
Receives US$100 million from the Australian government.
Expected to supply around 5% of global rare earth materials used in magnets and clean energy technologies once operational.
Media coverage and company commentary suggest the investment pipeline may also include titanium, zircon and graphite projects, and the Eneabba facility is widely described in industry coverage as a strategically important asset.
Market implications
1. Rare earth prices may now have a backstop
Used in electric vehicle motors, wind turbines, and advanced defence systems, rare earth materials have seen high price volatility in recent years. The deal suggests greater coordination between the US and Australia to help stabilise rare earth markets, which have previously been heavily influenced by Chinese policy decisions. These materials have been vulnerable to price dumping and export restrictions.
Governments are now stepping in with:
Guaranteed offtake
Stockpiling plans
Direct funding for processing infrastructure
That’s significant for producers, as it could help reduce financing costs, help streamline development timelines, and improve investor confidence in future demand.
Watchlist:
Lynas Rare Earths (ASX:LYC) – The largest rare earths producer outside China by market capitalisation, with established operations in Australia and downstream links in the United States
Iluka Resources (ASX:ILU) – A major mineral sands producer developing Australia’s first domestic heavy rare earths refinery at Eneabba
Arafura Rare Earths (ASX:ARU) – Directly named recipient of government equity and offtake support through its Nolans project in the Northern Territory
MP Materials (NYSE:MP) – US-based supplier that may benefit from domestic stockpiling and pricing coordination
Ionic Rare Earths (ASX:IXR) – Focused on mining, refining and recycling of magnet and heavy rare earths critical for the energy transition
VanEck Rare Earth and Strategic Metals ETF (REMX:US) – Holds MP Materials and Lynas among its top holdings
