US and Australia sign rare earths deal to counter China's dominance

October 21, 2025

The United States and Australia have signed a significant agreement to boost supplies of rare earths and other critical minerals, challenging China's market dominance. The deal supports $8. 5 billion in "ready-to-go" projects to expand Australia's mining and processing capabilities, with $1 billion to be jointly invested in projects across both countries within six months.

Who is affected

Australian rare earths mining companies (Arafura Rare Earths, Iluka Resources, Lynas Rare Earths)
US companies reliant on critical minerals
China's critical minerals industry
Consumers of products containing rare earth materials (defense equipment, computer chips, cars)

What action is being taken

The US and Australia are signing a deal to boost critical minerals supplies
The two countries are jointly investing $1 billion in projects over the next six months
The US is investing in a 100 tonnes-per-year advanced gallium refinery in Western Australia
The US Export-Import Bank is preparing to offer $2.2 billion in financing for critical minerals projects
The US and Australia are working together on pricing, permitting, and rules for government review of sales in the sector

Why it matters

China currently controls about 70% of rare earths mining and 90% of processing
US companies rely heavily on these materials, making them vulnerable to supply disruptions
China has recently restricted access to supplies in response to US tariffs and other tensions
The agreement aims to reduce dependence on China for critical minerals
Australian mining company shares have already responded positively to the announcement

What's next

No explicit next steps stated in the article

Read full article from source: BBC