WASHINGTON, DC – OCTOBER 20: Prime Minister of Australia Anthony Albanese (L) and U.S. President Donald Trump shake hands after signing a $8.5 billion rare earth minerals agreement during a bilateral meeting in the Cabinet Room of the White House on October 20, 2025 in Washington, DC. Albanese is visiting the U.S. Capital to meet with President Trump and later visit the Pentagon. (Photo by Anna Moneymaker/Getty Images)
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The United States and Australia executed a framework agreement on Monday in the high-stakes game of global chess related to supply chains for rare earth minerals, which serve as a key ingredient to the energy foundation which powers modern life. President Donald Trump and Australian Prime Minister Anthony Albanese inked a landmark agreement in the White House Cabinet Room, jointly pledging as much as $8.5 billion to boost projects relate to critical minerals production and processing. With an immediate $3 billion combined infusion from both nations over the next six months, this deal serves as a direct riposte to Beijing’s escalating grip on the rare earths market, where China controls over 80% of global refining capacity.
“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 quipped to reporters following the signing.
Details Of the Rare Earth Minerals Framework
That’s likely an exaggeration, but the agreement most likely puts the U.S. energy economy and military on a stronger footing than it stood on October 9 when China rolled out new export controls on a dozen key rare earth minerals, along with technologies for mining and separation.
As I wrote here last week, China’s October 9 announcement is the latest in a series of restrictions on rare earth movements around the world and provides a stark reminder of the aggressive tactics Beijing is willing to take to protect the country’s hegemony in global trade. The Chinese government’s latest move builds on April’s curbs on seven elements, effectively requiring the Xi government’s approval for any foreign exports containing even trace amounts of these materials.
“What we’re trying to do here is to take the opportunities which are there,” Albanese told assembled reporters. The opportunities identified during the meeting of the two national leaders include Australia-based projects related to rare earth production, processing and refining in Australia.
A White House fact sheet used during the meeting indicated that, in addition to the $3 billion invested by the two governments, the U.S. Export-Import Bank would issue seven letters of interest totaling to $2.2 billion, which the White House says will result in total investment of than $5 billion. The Pentagon, which already locked up a 15% interest in the biggest domestic rare earth refiner, California-based MP Materials, in July, plans to help fund the building of a 100 metric-ton-per-year gallium refinery in western Australia to help meet the needs of the military.
While the full terms of the deal were not immediately available, the objectives are clear. The first is to establish supply chains for these crucial minerals that are outside the control of China. China possesses by far the largest reserves of rare earth minerals on earth and controls an estimated 80% of global refining capacity. Worse from a national security perspective, China currently controls as much as 90% of global capacity to manufacture the high-grade magnets from these raw materials which make up a crucial element in an array of modern weapons systems and other technologies that are important to the Pentagon.
The second clear objective partly satisfied by this U.S./Australian alliance is to provide Trump with additional leverage on the issue as he prepares to hold a one-on-one meeting with Chinese leader Xi Jinping at the end of October during the Asia-Pacific Economic Cooperation summit in South Korea.
China Moves Aggressively To Protect Rare Earth Hegemony
U.S. presidential administrations from Bill Clinton through Joe Biden struggled for decades to balance environmental concerns over domestic mining and processing of these minerals with national security implications related to importing them, most often landing on the side of environmental protection. The resulting refusal to permit new mines helped create a heavy U.S. reliance on imports of these minerals and magnets – the vast majority via Chinese-controlled supply chains.
The speed and aggression with which the Chinese government is willing and able to deploy countermeasures to protect its dominance in the rare earth realm was clearly illustrated on October 13. Reacting to China’s October 9 announcement, the Dutch government – at the urging of the U.S. State Department – attempted to seize control of Nexperia, a subsidiary of China-owned Wingtech Technologies, which is a key player in supply chains for semiconductors used in the automotive industry, under a rarely-used cold war-era emergency nationalization law.
Nexperia produces components in factories located in Germany and the UK, but most of the production from those plants is shipped back to a huge facility on the Chinese mainland where the parts are assembled, tested and packaged before then moving into the international supply chain. Beijing simply responded to the Dutch provocation by moving to halt shipments from that facility, thus eliminating any benefit to the Netherlands and the U.S. from the nationalization of those European plants.
Thus, with a single tactical move, Beijing was able to protect its market dominance, highlighting the pressing energy security and national security implications of continued reliance on Chinese controlled supply chains for these critical minerals and components made from them.
Trump’s framework deal with Albanese constitutes one link in what seems to be a very long chain that will be needed to free the U.S. from reliance on those supply chains. Both the U.S. President and Treasury Secretary Scott Bessent assert that America has an array of tools to deploy as leverage in negotiations with China in the rare earth minerals realm, but the available evidence shows the Xi government will not be inclined to fold its own hand anytime soon.