Key facts
- US and Australia pledged to invest at least $1 billion each over six months in critical minerals projects.
- The agreement aims to counter China's influence in the critical minerals sector.
- The US and Australia will support Alcoa's plan to build a gallium plant in Western Australia.
- The proposed gallium plant is expected to produce 100 metric tons annually.
- The Export-Import Bank of the United States issued Letters of Interest totaling over $2.2 billion for critical minerals projects in Australia.
The United States and Australia have entered into a significant critical minerals agreement, pledging a combined investment of at least $2 billion over the next six months. This initiative aims to reduce China's dominance in the supply chain for these vital materials.
Signed by U.S. President Donald Trump and Australian Prime Minister Anthony Albanese, the agreement also establishes a price floor for critical minerals, a measure advocated by Western mining companies. A key component of the deal involves advancing Alcoa's plan to construct a gallium plant adjacent to its existing alumina refinery in Western Australia.
Alcoa has been collaborating with Japan Australia Gallium Associates (JAGA) on this project. Following feasibility studies, a special purpose vehicle, jointly owned by the U.S. and Australian governments along with Alcoa, is expected to form a joint venture with JAGA to build and operate the plant. This facility is projected to produce 100 metric tons of gallium annually.
Gallium, a critical mineral recovered as a byproduct of alumina refining, is essential for the semiconductor and defense industries. Mining analyst Reg Spencer noted the positive implications for Australian-listed companies. Concurrently, the Export-Import Bank of the United States announced it has issued seven Letters of Interest totaling over $2.2 billion to support U.S.-aligned critical minerals projects in Australia, including those from Arafura Rare Earths and Northern Minerals.