Washington (TDI): To come at par with China’s unmatched dominance in the critical minerals global supply, the United States and Australia have reached a rare earths agreement; reserves that are found significantly in the latter.
The agreement, on which negotiations were ongoing for four to five months, was formalized during the Monday meeting between Trump and Australian Prime Minister Albanese; the first summit between the two leaders since Trump returned to presidency.
In what is known about the deal so far, the goal is to amp up processing capacity which turns raw minerals into materials that is then used in everything from military hardware to laptops to electric vehicles.
China dominates the global processing power by a 90% and has the largest reserves of critical minerals and rare earth metals. It also controls 70% of rare earth mining in the world.
Australia and the US will try to increase this mining and processing capacity by pouring in $1billion investments each, over the next six months. It is unclear where these investments will be utilized; in the US or in Australia.
Read More: Australian PM Likely to Spotlight Rare Earths in First Summit with Trump
Albanese did mention that there are three types of projects covered in the agreement; one which both countries will jointly undertake, the other which the US will undertake in Australia, and the third which Australia itself will lead and execute.
He also told reporters that a total of $8.5billion are in the pipeline for these projects while Trump said, “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.”
However, breaking dependence on China’s supply will not come very quickly, as the country is way ahead in mining and processing of these resources.
Kevin Hassett, the director of the White House’s National Economic Council, told the reporters (reported by the Associated Press) prior the meeting, “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.”
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