Trump makes rare earths deal with Australia to fight China

Core Points - The US and Australia have signed a significant agreement to enhance access to rare earths and critical minerals, aiming to reduce reliance on China for these essential materials [1][2][3] - The deal includes joint investments in mining and processing projects in Australia, with an initial commitment of over $1 billion from both countries [5][7] - Australia is positioning itself as a key alternative supplier of rare earths, holding the world's fourth-largest deposits and being the only producer of heavy rare earths outside China [9][12] Investment and Economic Impact - The agreement is expected to lead to a surge in production of critical minerals used in advanced technologies, with Australia having an $8.5 billion pipeline of projects ready to go [2][5] - The US and Australia will adopt trading standards to protect their domestic markets from unfair trade practices, which may include price floors [4] - Investor enthusiasm has increased, with shares of Australian mining companies like Lynas Rare Earths rising significantly over the past year [12] Strategic Context - The deal is part of a broader American strategy to develop supply chains that can compete with China, especially in light of recent export restrictions imposed by China on critical minerals [3][10] - The Pentagon is involved in funding specific projects, such as a gallium refinery in Western Australia, highlighting the strategic military implications of securing these resources [7][8] - The agreement reflects a growing collaboration between the US and Australia, with both nations recognizing the importance of securing critical mineral supplies for national security and technological advancement [5][8]