US-Australia rare earths deal offers boost but won’t quickly reduce China’s dominance
A new US-Australia agreement on critical minerals will bring significant financial support to Australia’s rare earths industry, but experts warn it will take years to meaningfully challenge China’s global dominance.
Signed Monday, the deal commits $3 billion to mining and processing projects and establishes a price floor for critical minerals, a step long sought by Western miners. The White House estimates these investments could unlock deposits worth $53 billion, though detailed plans were not disclosed, News.Az reports, citing Reuters.
US President Donald Trump said within a year the countries would have “so much critical mineral and rare earths that you won’t know what to do with them,” but analysts are skeptical.
“The time frame for various projects to be ready even for 2027 would be heroic,” said Barrenjoey analyst Dan Morgan, noting that supply growth in the rare earths sector typically takes 5–7 years.
China currently controls 90% of global refining capacity, 69% of mining, and 98% of magnet production, giving it a near-monopoly on materials essential for clean energy, defense, and automotive sectors.
Despite this, the deal already benefits some Australian miners. The US Export-Import Bank issued $2.2 billion in Letters of Interest to firms including Arafura Rare Earths, which aims to begin production by 2029.
Industry leaders caution that new projects will only succeed if buyers reduce reliance on cheaper Chinese supply. As Syrah Resources CEO Shaun Verner noted, global demand patterns must change to make alternative sources viable.
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