US-Australia Pact Turbocharges Critical Minerals Sector

The United States and Australia have inked a crucial agreement designed to challenge China's dominance over the critical minerals industry. Both nations have pledged at least $1 billion each to boost mining and processing projects over the next half-year.

Central to the agreement is the development of a new gallium plant in Western Australia, spearheaded by U.S. aluminium giant Alcoa. This facility is expected to supply up to 10% of the global gallium demand, a mineral vital for technology and defense sectors. Australia's government has committed up to $200 million in equity financing, while the U.S. will also invest equity with reciprocal offtake agreements.

Moreover, the U.S. Export-Import Bank has expressed its commitment to advancing critical minerals projects in Australia with Letters of Interest totalling over $2.2 billion. Beneficiaries include notable Australian firms such as Arafura Rare Earths and Northern Minerals. This strategic move anticipates bolstering American manufacturing and national security through a more secure mineral supply chain.