Australia and US Boost Support for Critical Minerals With $3.5 Billion

Australia and the U.S. have committed more than A$5 billion ($3.5 billion) to back a range of critical mineral projects, nearly double the amount pledged when the two countries struck a co-operation agreement six months ago, Canberra said on Sunday.

The funding seeks to support Australian ventures to develop and refine metals vital to industries including defense, advanced manufacturing and the energy transition, a market that has long been dominated by China.

By doing so, they would support the re-industrialisation of America's high-tech manufacturing base, while helping to "counter China's export dominance and ensure Western supply-chain resilience," the two nations said when they reached a framework deal last October.

In that deal, Australia and the U.S. agreed to each provide at least $1 billion in investments towards an $8.5 billion pipeline of priority critical mineral projects across the two countries over the subsequent six months. Australia has a vast supply of critical minerals such as rare earths, but China has mastered the technically difficult and environmentally fraught refining process.

"Australia and the U.S. are delivering on the commitments made in the White House, with priority projects in Australia that support production of rare earths and critical minerals," Resources Minister Madeleine King said in a statement.

"Australia is taking a global lead to diversify crucial supply chains for critical minerals and rare earths, which are vital to support economic and national security for Australia and our trading partners."

REFINERY PROJECT BACKED

The A$5 billion in funding to Australian critical mineral projects will be carried out through the Export Finance Australia (EFA) and U.S. Export-Import Bank (EXIM) agencies.

Among the largest investments is for a rare earths refinery project owned by Tronox Holdings where EFA and EXIM have issued letters of support and interest worth a combined A$849 million. Tronox, with operations in Western Australia and the U.S., would tap its existing mining and processing capabilities to produce mixed rare earth carbonate containing both light and heavy rare earth elements, King said.

The agencies also committed up to A$1 billion in combined backing for Ardea Resources' Kalgoorlie Nickel Project in Western Australia.

Other projects supported under the framework include Alcoa's Gallium Recovery Project and Arafura's Nolans Rare Earths Project along with graphite, magnesium and tungsten ventures. Additional projects for minerals including vanadium and scandium have also received indications of support, King said.

($1 = 1.4164 Australian dollars)

(1 Australian dollar = $0.7060)