U.S. President Donald Trump decided to strengthen cooperation with Australia on rare earths and critical minerals in response to China's tighter controls on rare earth exports. Because rare earths are essential for defense and advanced industries, the move is seen as a bid to diversify supply chains beyond China, the world's largest exporter.
On the 20th (local time), President Trump met Australian Prime Minister Anthony Albanese at the White House and jointly signed the U.S.-Australia framework for securing stable supply chains of critical minerals and rare earths. The two governments plan to co-invest more than $3 billion (about 4.2 trillion won) in critical mineral projects over the next six months.
In the agreement, the two countries said they will strengthen joint cooperation to accelerate the stable supply of critical minerals and rare earths needed to support the defense and advanced technology manufacturing base. The crux of the agreement is to raise capital and operating costs needed for mining and processing projects for critical minerals and rare earths through guarantees, loans, equity investments, and regulatory easing.
The White House said the project could recover resource value on the order of $53 billion (about 75 trillion won). The U.S. Export-Import Bank issued seven letters of interest for financing exceeding $2.2 billion, which will be used to catalyze a total investment of $5 billion. The Ministry of National Defense (War Department) will invest in building a gallium refinery in Western Australia.
On the 9th, China expanded the scope of rare earth export controls from seven categories to 12 and included products made overseas using Chinese rare earths and rare earth-related technologies in the control list. The measure takes effect Dec. 1. President Trump has warned that if China does not change its stance, the United States will impose an additional 100% tariff on Chinese products starting Nov. 1.
Meanwhile, Australia on the day purchased $1.2 billion worth of unmanned submarines from U.S. defense contractor Anduril and is said to have agreed with the United States to receive the first batch of Apache helicopters worth $2.6 billion.
According to the White House, the Australian government has provided $1 billion in grants to the U.S. government since February this year to expand and modernize the U.S. submarine industrial base and plans to provide an additional $1 billion by the end of the year.