Boost supplies: The US is looking for a replacement for Chinese rare earths in Australia

Australia is ready to provide the United States with access to its rare earth metals. For this, Canberra expects not only American investments, but also the strengthening of military cooperation. Including through the acquisition of nuclear submarines under the AUKUS agreement. These were the topics discussed at the White House on October 20 during Australian Prime Minister Anthony Albanese's first visit to Washington since Donald Trump's inauguration. The United States needs rare earths, including for the production of F-35 fighter jets, Tomahawk missiles and Predator drones, while the country itself does not have enough of them, and given the trade war with China, it has become difficult to purchase them there. Meanwhile, the discussion of the supply of American equipment to Australia is exacerbating the already difficult situation in the Asia-Pacific region, where Beijing accuses the West, which in turn accuses China of unfriendly actions. At the same time, on October 20, Canberra detected a Chinese aircraft in its airspace.

Trump is interested in Australian rare earths

Against the background of the conflict between the United States and China, Washington is looking for an alternative seller of rare earth metals (REM). This issue was on the agenda of talks between Australian Prime Minister Anthony Albanese and Donald Trump at the White House on October 20. Ten minutes later, the parties had already signed an agreement, which they had been working on for about four or five months.

"In about a year, the United States will have so many critical minerals and rare earths that they won't know what to do with them," Trump stressed.

The United States and Australia are jointly investing more than $3 billion in projects on critical metals, with the cost of resources that can be extracted estimated at $53 billion. In addition, the Pentagon is planning investments in the construction of a gallium processing plant in Western Australia with a capacity of 100 tons per year.

A new round of escalation in the trade conflict between the United States and China occurred in early October, when Beijing ordered stricter controls on the export of technologies related to the extraction and processing of rare earth metals.

In response, Trump promised to impose additional 100 percent duties against China, which are due to take effect by November 1. However, even before the new rules were introduced, Beijing significantly reduced exports of some rare earth metals to the United States. In September, shipments fell to 421 tons, compared with 590 tons in August. At the same time, Trump claims that he expects to resolve differences with Beijing at the APEC meeting in South Korea, and even come to China for a state visit in 2026.

The group of rare earth metals includes 17 chemical elements, most of which are needed in high-tech industries. For example, one F-35 fighter requires more than 400 kg of rare earths. They are also needed in the production of Tomahawk missiles and Predator drones. In civilian life, REM is used to create strong magnets for loudspeakers, hard drives for computers, electric motors and jet engines, and is also used in the manufacture of television screens and computers.

China has the largest reserves: He owns 44 million tons of rare earth metals and 70% of the global supply. Brazil is in second place (21 million tons), followed by India (5.7 million tons), Australia is in fourth place with 5.7 million tons. The United States itself has only 1.9 million tons. At the same time, the United States has only one active REM deposit, but in any case, Washington must send ore to China for their processing.

Australia could be a potential seller of rare earth metals in the United States, especially since the country's authorities in April announced major investments in creating a strategic reserve of critically important minerals. The move is aimed at ensuring sustainable supplies of rare earth metals and other critical minerals, as well as reducing dependence on China.

Nevertheless, analysts point out that Australia's manufacturing infrastructure is underdeveloped, so processing rare earths is still too expensive. The numerical advantage of the Chinese reserves over the Australian ones also plays a role. In particular, Canberra's neodymium reserves are seven times less than those of Beijing. According to some expert estimates, all American employees will need at least five years of work to replace Chinese supplies.

— There is only one Lynas company in Australia that develops rare earth metals. It is fundamentally impossible to compare the expertise of China and Australia in this matter. The specifics of the rare earth market are such that it is not enough just to extract a mineral, it is important to turn each of them into a commercial form, which Australia does not yet know how to do. The maximum that the country can provide at this stage is rare earth metal oxides. The technology sector in Australia is extremely limited," says Ruslan Dimukhamedov, Chairman of the Association of Producers and Consumers of Rare and Rare Earth Metals.

Security guarantees for Australia

In exchange for access to its rare earths, Australia hopes to receive nuclear submarines from the United States under the AUKUS agreement, thus becoming the second country after the UK to own them.

"We have weapons that many people don't even know about. <...> We are far ahead of China in all military areas, except shipbuilding, but we will soon catch up with them there," Trump said at the White House.

Following the meeting, it became known that Australia would purchase Anduril unmanned underwater vehicles from the United States for $1.2 billion. In addition, Canberra will soon receive the first batch of Apache helicopters under a $2.6 billion agreement. The Australian authorities will also make significant investments in developing the capabilities of their air defense system, in particular, allocating $ 2 billion to purchase products from American companies.

The deal, despite the fact that this idea has not been discussed by the leaders of the three countries, is based on the need to counter China's growing presence in the Asia-Pacific region. However, its execution was threatened after Donald Trump came to power with his America First policy. The current president's administration is questioning the ability of the United States to produce the necessary number of submarines for itself and for Australia.

— In relations with Beijing, Canberra takes a certain distance. There are multifaceted conflicts between countries, but it is not entirely correct to say that Australia is now gathering its power in order to counteract China. I think that she has a desire to simply improve her performance in terms of military-technical equipment in order to be a country that is able to repel certain threats and be a partner to those states with which she currently has close relations, in particular with Japan," says Oleg Kazakov, an expert at the ICSA RAS.

Right on the day of Trump's meeting with Albanese, the Australian Ministry of Defense accused China of making "unsafe and unprofessional maneuvers" in the airspace. A day earlier, the Chinese military announced the illegal flight of an Australian military aircraft over the disputed waters of the South China Sea. Before that, in March, Canberra complained that Chinese ships had been circulating off its coast for three weeks.

Despite this and other differences, Beijing remains an important trading partner for Canberra, the two countries have a free trade agreement, and Australia recognizes Taiwan as part of China. Albanese visited the Asian country twice. For this reason, it is important for Australia to maintain positive relations with China, Oleg Kazakov argues. Trump, in turn, is interested in disrupting these ties as part of his strategy to reduce Beijing's trade influence.