US, Australia ink $8.5 billion critical minerals deal
What's the story
United States President Donald Trump and Australian Prime Minister Anthony Albanese have inked a critical minerals deal. The agreement was signed at the White House on Monday. The $8.5 billion deal comes as China tightens its grip on global supply chains of rare earth minerals, which are essential for various industries from electric vehicles and electronic equipment to military applications.
Investment plan
US, Australia to invest $1bn each under new agreement
Under the new agreement, both countries will invest $1 billion each over six months in mining and processing projects. The deal also establishes a minimum price floor for critical minerals, a long-sought demand of Western miners. Trump said negotiations for the agreement took four to five months. He added that the partnership would soon lead to an abundance of critical minerals.
Economic impact
Australia's stance against China's rare earth grip
Kevin Hassett, director of the White House's National Economic Council, stressed Australia's importance in stabilizing the global economy against China's "rare earth extortion." "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," he said. Currently, China controls around 70% of rare earths mining and 90% of the material processing.
Defense talks
Progress on AUKUS pact under Trump administration
The meeting also touched upon the AUKUS pact, a trilateral security agreement between Australia, the US, and the United Kingdom, which was signed during former US President Joe Biden's term. Trump said AUKUS was "moving along very rapidly" under his administration. Navy Secretary John Phelan said efforts are underway to improve the original framework of AUKUS for all three countries involved, while clarifying "some of the ambiguity" in it.
Commitment assurance
Australian commitment to AUKUS pact amid concerns
Australian officials have assured their commitment to the AUKUS pact. They are contributing $2 billion this year to increase production rates at US submarine shipyards and preparing to maintain US Virginia-class submarines at their Indian Ocean naval base from 2027. At its core, the pact is believed to be about countering China's growing presence in the Indo-Pacific region. Although none of the members have specifically mentioned China, they have discussed how regional security concerns have "grown significantly" in recent years.