Australia offers Trump compensation for Chinese rare earth exports

Australia’s prime minister is preparing to pitch his country’s vast mineral wealth as a solution to China’s restrictions on rare earth metals during his meeting with President Donald Trump on Monday, as the United States and other countries race against time to diversify their supply of essential minerals. Anthony Albanese is scheduled to meet with President Trump in Washington around eleven in the morning, and during the meeting he aims to reach an agreement with the United States on vital minerals. Albanians are expected to seek reassurances about the US administration’s commitment to the OKOS agreement, which stipulates that the United States will help Australia acquire nuclear submarines. Also read: China’s new restrictions on rare metals ignite a supply race China’s restrictions on rare metals China’s move to impose unprecedented restrictions on exports of the rare metals supply chain dominated the discussions of global financial leaders in Washington last week. Treasury Secretary Scott Besent signaled that a united front had begun to form, noting that US officials were in talks with “European allies, Australia, Canada, India and Asian democracies” to respond to that move. Albanese joins a number of his peers who have traveled to Washington in an effort to strengthen relations with the United States, while being careful to avoid any confrontation with the president, who is known for his volatile positions and temperaments. Also read: China’s restrictions on rare earths unite allies behind Trump A poll published last week showed that Australians still support the alliance with the United States, but they oppose Trump and appear concerned about the future of American democracy. As a result, Albanians must strike a delicate diplomatic balance. Australian pitch to Trump Ahead of Monday’s meeting, Australia’s ambassador to Washington, Kevin Rudd, highlighted his country’s ability to provide solutions to the essential minerals crisis threatening the West’s economies in a pitch he made to the Trump administration. “Australia has almost every kind of mineral and element in the periodic table,” Rudd said in a speech in Washington last week. “It’s one thing to own resources, it’s another thing to know how to extract them and make them work in a high-tech industry, and we have the biggest and best mining companies in the world.” Rad pointed out that the United States suffers from a shortage of about 50 vital and rare minerals, and stressed that through joint investment from both sides, Australia “could meet the needs of between 30 and 40 of these minerals without significant additional effort, particularly in the area of ​​refined rare minerals.” The future of Australian-US cooperation For some time, market participants have been optimistic about the prospect of both Canberra and Washington seriously discussing Australia’s ability to provide safe shipments of rare earths and help the United States develop its own capabilities. Investors have been betting on companies expected to benefit from US support, as shares of mining companies such as Lynas Rare Earths have risen more than 150% in the past 12 months. People familiar with the talks said officials from various US agencies told representatives of more than a dozen Australian mining companies at meetings in Washington last month that the US administration was considering mechanisms that would allow it to invest in those companies through equity-like interests. Washington is looking for alternatives to China. Mining companies said earlier this month they had been invited to Washington to brief Ambassador Kevin Rudd on their projects. If the United States decides to invest equity in those companies, it would not be the first time a foreign government has invested directly in an Australian resource project. Japan pumped money into Lynas in 2011 after China halted supplies of rare metals due to a regional dispute, and then increased its investments in 2023 to secure supplies of heavy rare elements used in the manufacture of magnets, specifically the elements on which China currently imposes export restrictions. Despite their strategic importance, prices for essential minerals have remained low, dampening Australia’s hopes of benefiting from them economically and prompting Albania’s government to begin building a reserve worth A$1.2 billion. OCOS review Australia is also looking to the results of the US review of the OCOS agreement, while officials in Canberra have publicly expressed confidence that the broad security agreement with the US and the UK will remain in place. Australia believes the review is primarily focused on strengthening the agreement, not tearing it down, according to people familiar with the matter who requested anonymity because of the sensitivity of internal deliberations. Also read: Washington is reviewing the “OCOS” submarine agreement … and Australia: We will cooperate closely. Defense Industry Secretary Pat Conroy visited Washington last week and said he found positive attitudes toward the deal. “I met with prominent leaders in Congress who expressed great enthusiasm about the importance of the OKOS agreement, and I felt clear optimism during my meetings at the Pentagon,” Conroy explained.