The Art of the (critical minerals) Deal: The United States and Australia framework to secure reliable rare earths supplies

After months of private negotiations, US President Donald Trump and Australian Prime Minister Anthony Albanese signed the United States-Australia Framework for Securing Supply in the Mining and Processing of Critical Minerals and Rare Earths. The document only hints at how real measures will be implemented, yet its political and commercial implications are significant.

What has been agreed?

• A shared objective – securing supply: The parties will “accelerate the secure supply” of critical minerals (lithium, nickel, cobalt, graphite, high-purity alumina, manganese, vanadium and others) and rare earths for defence, advanced manufacturing, energy transition and digital technologies. The manufacturing of defence and advanced technologies has been flagged listed as the central rationale for securing favourable geopolitical supply chains for these minerals.

• Joint project pipeline and at least US $1 billion in near-term finance: Within six months of 20 October 2025, the United States and Australia will each "take measures to provide" a minimum of US $1 billion in financing (potentially in the form of loans, loan guarantees, equity and offtake-backed facilities) for projects that can deliver end product to US and Australian buyers. The leaders have already noted an initial US $3 billion (AUD $4.6 billion) package, including equity stakes in Alcoa’s proposed high-purity gallium refinery in Western Australia (US $200 million) and Gina Rinehart-backed Arafura’s Nolans rare earths project in the Northern Territory (US $100 million). As part of these joint commitments, a "Mining, Minerals & Metals Investment Ministerial" will be convened by April 2026 to foster investment.

• Streamlined approvals: Both Governments will take measures to “accelerate, streamline or deregulate” permitting for exploration, mining, separation and processing, within the boundaries of domestic law. The new "national interest" exemption within amendments to the Environment Protection and Biodiversity Conservation Act 1999 (Cth) is a clear implementation of this policy.

• Pricing and market guard rails: The countries propose to develop standards-based trading systems, price-floor or other stabilising mechanisms to counter “non-market policies and unfair trade practices”. The countries will also work with international partners to develop a future global framework to deal with associated international pricing challenges.

• Foreign investment screening: Authorities on both sides will be strengthened (or newly created) to “review and deter” hostile or national security-sensitive acquisitions of critical-minerals assets. This sends a clear signal to would-be purchasers linked to strategic rivals.

• Recycling, mapping and third-country outreach: Joint programs will support minerals recycling technologies, collaborative geological surveys in third countries and coordination with likeminded strategic partners to support critical mineral supply chains.

• Rapid-response governance: A US-Australia Critical Minerals Supply Security Response Group, co-chaired by the US Secretary of Energy and Australia’s Resources Minister, will be established and will meet on 10-days’ notice to troubleshoot supply disruptions and identified vulnerabilities to the supply chain.

The urgency for securing rare earths

China is unquestionably the market leader when it comes to volume of rare earths production and refining. Beijing’s successive waves of export licence restrictions since 2024 (specifically with respect to rare earth export restrictions) have required market participants to seek alternative supply chains, with Australia presenting a credible alternative for critical minerals.

Commercial takeaways

• Capital inflows to Australia: We expect public-sector financing is likely to co-invest with private equity. The market guard rails that the Framework provides for should increase the ease in which feasibility of these projects can be achieved (which to date have suffered from irregular market behaviour). This builds on existing investments in Australian rare-earths producers made by the US Department of Defence.

• Approvals strategy: Proponents should track forthcoming Australian Federal and State consultation papers on fast-track approvals.

• Offtake leverage: US and Australian producers of rare earths are expected to enter early offtake contracts; projects able to present credible supply timelines will be advantaged.

• Regulatory scrutiny: Any transaction involving non-allied investors (particularly Chinese entities) in Australian critical-mineral assets will attract heightened national-security review. Early engagement with FIRB is essential.

• Pricing frameworks: Consider potential for consultation on reference prices, price-floor mechanisms or trusted-supplier certification systems that could give confidence to achieving feasibility.

Interplay with existing incentives

Numerous Australian States and Territories have previously implemented State-based incentives for the development of critical minerals projects, including the exemptions to rent for exploration permits, grants for exploration and feasibility studies and tax credits. We expect such schemes to be renewed or expanded to complement the Framework.