Australian Prime Minister Anthony Albanese and US President Donald Trump signed a rare earths deal during their meeting at the White House on Monday (October 20).
The meeting was set to focus on critical minerals and rare earths, with Albanese telling Bloomberg on Sunday (October 19) that it is also an opportunity to “consolidate and strengthen” the US-Australia relationship.
According to insiders, the deal has been in the works for five months now. Albanese was also quoted as having described it as an US$8.5 billion pipeline ‘that we have ready to go.’
During the meeting, Trump said that they “never had any doubts” about the US-Australia relationship, adding that “there’s never been anybody better.”
The signing of the statement happened after Trump’s opening remarks, with the US President calling the deal a “key objective” in reducing reliance on China.
“Within a year, we’ll have critical minerals and rare earths that you won’t know what to do with them,” Trump said, noting that this will happen within a year from now.
‘They’ll be worth about two dollars,’ he added.
China still currently holds the world’s largest rare earths reserves, but Australia has been highlighted as a key player since the issue of tariffs between the US and China.
The country is also home to some of the most significant rare earths reserves globally, such as Lynas Rare Earths’ (ASX:LYC, OTC:LYSDY) 106.6 million tonnes Mount Weld mine and Arafura Rare Earths’ (ASX:ARU, OTC:ARAFF) 56 million tonnes Nolans project.
Last week, several companies, such as Nova Minerals (ASX:NVA,NASDAQ:NVA) were invited to brief the Australian government on key projects prior to the US-Australia meeting.
Nova was instructed to include an overview of its flagship Estelle gold project, the key minerals identified, planned expansion activities, and the company’s engagement with US government agencies.
The same goes for Resolution Minerals (ASX:RML), which was invited for a briefer on its Horse Heaven gold-antimony-tungsten project.
Both Nova and Resolution topped the ASX charts last week.
AUKUS deal
Albanese and Trump were also reported to have discussed the AUKUS submarine deal, a multi-billion dollar agreement between Australia, the UK and the US, which is believed to be about countering China’s growing presence in the Indo-Pacific region.’
When asked whether AUKUS is a “deterrent” for China, Trump answered yes.
‘(But) I don’t think we’re going to need it’ with China.
“The US has the best military in the world, and nobody wants åto mess with it,” he added. ‘We’re going to get along great with China.’
AUKUS is worth around US$239 billion or AU$368 billion over 30 years. Starting in 2032, Australia plans to buy three Virginia-class submarines from the US, with the option to get two more. These will fill the gap while the UK and Australia develop a new submarine model.
Trump also said that the US is working on building more submarines for Australia and is going to expedite submarine exports to Australia.
Australia is expected to receive the first of the new submarines in the early 2040s.
Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.