US and Australia sign critical-minerals agreement as a way to counter
China
[October 21, 2025] By
SEUNG MIN KIM and AAMER MADHANI
WASHINGTON (AP) — President Donald Trump and Australian Prime Minister
Anthony Albanese signed a critical-minerals deal at the White House on
Monday as the U.S. eyes the continent’s rich rare-earth resources at a
time when China is imposing tougher rules on exporting its own critical
minerals abroad.
The two leaders described the agreement as an $8.5 billion deal between
the allies. Trump said it had been negotiated over several months.
“In about a year from now we’ll have so much critical mineral and rare
earth that you won’t know what to do with them," said Trump, a
Republican, boasting about the deal. "They’ll be worth $2.”
Albanese added that the agreement takes the U.S.-Australia relationship
“to the next level.”
Earlier this month, Beijing announced that it will require foreign
companies to get approval from the Chinese government to export magnets
containing even trace amounts of rare-earth materials that originated
from China or were produced with Chinese technology. The Trump
administration says this gives China broad power over the global economy
by controlling the tech supply chain.
“Australia is really, really going to be helpful in the effort to take
the global economy and make it less risky, less exposed to the kind of
rare earth extortion that we’re seeing from the Chinese,” Kevin Hassett,
the director of the White House’s National Economic Council, told
reporters Monday morning ahead of Trump’s meeting with Albanese.
Hassett noted that Australia has one of the best mining economies in the
world, while praising its refiners and its abundance of rare earth
resources. Among the Australian officials accompanying Albanese are
ministers overseeing resources and industry and science, and Australia
has dozens of critical minerals sought by the U.S. because they are
needed in everything from fighter jets and electric vehicles to laptops
and phones.
A push for more mines
The agreement could have an immediate impact on rare earth supplies in
the United States if American companies can secure some of what
Australian mines are already producing, although it will take years — if
not decades — to develop enough of a supply of rare earths outside of
China to reduce its dominance.
Pini Althaus, who founded USA Rare Earth back in 2019 and is now working
to develop new mines in Kazakhstan and Uzbekistan as CEO of Cove
Capital, said it will be crucial that the contracts to buy materials
from Australian mines include price floors, similar to what the U.S.
government promised MP Materials this summer, to protect against China
manipulating prices.
For decades, China has used the tactic of dumping excess critical
minerals onto the market to drive prices down to force mining companies
in the rest of the world out of business to eliminate any competition.
"I think taking away that arrow in the quiver of China to manipulate
pricing is an absolute crucial first step in Australia and the West
being able to develop critical minerals projects to meet our supply
chain demands,” said Althaus, who has spent nearly a quarter-century in
the mining business.
The agreement underscores how the U.S. is using its global allies to
counter China, especially as it weaponizes its traditional dominance in
rare earth materials. Top Trump officials have used the tactics from
Beijing as a rallying cry for the U.S. and its allies to work together
to try to minimize China's influence.
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 “China is a command-and-control
economy, and we and our allies will neither be commanded nor
controlled,” Treasury Secretary Scott Bessent said last week. “They
are a state economy and we are not going to let a group of
bureaucrats in Beijing try to manage the global supply chains.”
The level of investment outlined in the agreement shows how serious
the two nations are about addressing the problem.
“The U.S. and Australia will invest over $3 billion in joint
critical minerals projects within six months. That’s a somewhat
unprecedented speed of capital injection,” said Gracelin Baskaran,
director of the Critical Minerals Security Program at the Center for
Strategic and International Studies in Washington.
But Althaus cautioned that Australia can’t supply everything the
United States needs, so it is crucial that American continues to
invest in the long-term effort to develop other mining and
processing projects both at home and in friendly nations. He said
central Asia might be one of the most promising places to invest
because the region has significant rare earth reserves, and the
Soviet Union already did some of the initial development work when
it controlled that territory. That could cut years off the time it
will take to build a new mine there.
“Keep in mind, China has almost a 40-year head start on us,” Althaus
said. “We have at least a couple of decades to catch up to China in
terms of being able to meet our own supply chain requirements.”
Albanese's visit comes just before Trump is planning to meet with
Chinese President Xi Jinping in South Korea later this month.
The security partnership
Another topic of discussion was AUKUS, a security pact with
Australia, the U.S. and the United Kingdom that was signed during
U.S. President Joe Biden’s Democratic administration.
Trump noted Monday that AUKUS was established “a while ago” but that
the agreement now is “moving along very rapidly, very well.”
Albanese said that “our defense and security partnership with AUKUS
is so important for us.”
John Phelan, the Navy secretary, said that the U.S. wants to take
the original AUKUS framework and improve it for the three signatory
countries while clarifying “some of the ambiguity” in it.
“So it should be a win-win for everybody,” Phelan said.
In Beijing, the Chinese government reiterated its opposition to the
pact, which would help Australia obtain and build nuclear-powered
submarines.
“We always oppose creating bloc confrontation, increasing nuclear
proliferation risks and intensifying an arms race,” Foreign Ministry
spokesperson Guo Jiakun said Tuesday.
The center-left Albanese was reelected in May and suggested shortly
after his win that his party increased its majority by not modeling
itself on Trumpism.
“Australians have chosen to face global challenges the Australian
way, looking after each other while building for the future,”
Albanese told supporters during his victory speech.
___
Associated Press writers Josh Funk, Didi Tang and Ken Moritsugu in
Beijing contributed to this report.
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