US President Donald Trump and Australian Prime Minister, Anthony Albanese, signed a critical minerals agreement on Monday in a bid to counter China’s control over the exports of rare earth minerals to the rest of the world.
“In about a year from now, we’ll have so much critical mineral and rare earths that you won't know what to do with them,” Trump told reporters.
The meeting was marked by the US President backing another strategic nuclear-powered submarine deal with Australia to bolster security in the Indo-Pacific region, as well as telling off an Australia envoy to the United States over past criticism.
To Kevin Rudd, US ambassador and a former Australia Prime Minister, Trump said: “I don't like you either, and I probably never will.” In 2020, Rudd had called Trump “the most destructive president in history,” but later deleted the comment from social media.
Meanwhile, the minerals deal signed between Trump and Albanese was described by the Australian Prime Minister as an $8.5 billion pipeline “that we have ready to go.”
Trump said the deal had been negotiated in recent months after resource-rich Australia, which wants to extract and process rare earths, put preferential access to its strategic reserve on the table in US trade negotiations in April.
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As per a copy of the agreement released by both governments, the two countries will each invest $1 billion over the next six months into mining and processing projects as well as set a minimum price floor for critical minerals.
A White House statement on the agreement added that the investments would target deposits of critical minerals worth $53 billion, although it did not provide details on which types or locations.
The US Export-Import Bank (EXIM), which acts as the government’s export credit agency, later announced seven letters of interest totaling more than $2.2 billion to advance critical minerals projects in Australia. It said the letters were sent to Arafura Rare Earths, Northern Minerals, Graphinex, Latrobe Magnesium, VHM, RZ Resources, and Sunrise Energy Metals.
The United States has been looking to increase its access to critical rare earth minerals around the world as China tightened its grip over the export of the magnets, which include a range of minerals, including rare earths, lithium and nickel, used in electric vehicles, semiconductors, smartphones, jet engines, and submarines, among other products.
China has the world's largest rare earths reserves, according to US Geological Survey data, but Australia also has significant reserves.
The rare earths agreement came a week after US officials condemned China’s expansion of rare earth export controls as a threat to global supply chains.
As part of the rare earths agreement, Trump and Albanese agreed to cut permitting for mines, processing facilities and related operations in order to boost production.
The deal called for cooperation on the mapping of geological resources, minerals recycling and efforts to stop the sale of critical minerals assets “on national security grounds”.
This was an oblique reference to China, which has bought major mining assets across the world, including the world’s largest cobalt mine in Congo, from US-based Freeport-McMoRan in 2016.
While China’s foreign ministry did not comment directly on the deal, but a ministry spokesperson, Guo Jiakun, told a news briefing on Tuesday that “key mineral resource countries should play an active role in ensuring the safety and stability of the industrial and supply chain, and ensure normal economic and trade cooperation”.
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