Shares of rare earth companies in Sydney rise after Australia-Trump deal

Shares in rare earth companies rose in Sydney after US President Donald Trump and Australian Prime Minister Anthony Albanese signed an agreement aimed at improving US access to essential minerals. Following the signing of the agreement, Arafura Rare Metals Company announced that the US Export-Import Bank was considering providing $300 million worth of financing support for its Nolanz project in Australia, sending its stock up 29%. The company, backed by Australia’s richest woman Gina Reinhart, has also received conditional approval for an additional $100 million in financing from the Albanian government. The US Export-Import Bank has issued letters of interest to six other mining companies with total financing of more than $2.2 billion, including VHM Ltd. and Northern Minerals Ltd., whose shares rose 30% and 19% respectively. Gallium projects receive funding support. Shares of producers of gallium metal, used in the defense and semiconductor industries, also rose after Trump and Albanians announced financing projects related to this sector. Shares in Sydney-listed Alcoa Corp. rose 9.6% after it was revealed that the Alcoa-Sogitz gallium production project in Western Australia will receive capital funding of up to $200 million. As for Lynas Rare Earths Ltd, which does not currently benefit from financing but is the only producer outside of China of heavy rare earths, its stock rose 4.7% on Tuesday before later falling into negative territory. Shares of Iluka Resources Ltd., which produces mineral sands and is looking to expand its activity in rare metals, also rose 9.1%. $8.5 billion deal to reduce dependence on China Under the deal, the United States and Australia will pump $1 billion each into critical mineral projects over the next six months, with plans for subsequent increases within an $8.5 billion investment program in both countries. However, many of these projects are still non-operational, and it could take years before they start production. The agreement was reached on Monday during Albanese’s visit to Washington, in a move that reaffirms the White House’s efforts to diversify supply sources away from China, which dominates the rare earth sector. Also read: China’s restrictions on rare earths unite allies behind Trump. The move comes amid rising geopolitical tensions between Washington and Beijing, as the latter has imposed restrictions on exports of these vital minerals used in advanced technologies, batteries, chips and defense equipment. Analysts: The agreement supports the development of diverse and fair markets Canaccord Genuity Australia Ltd. analysts, including Reg Spencer, wrote in a note on Tuesday that the agreement between the United States and Australia “includes the use of economic policy and investment tools to support the supply of essential and scarce raw and manufactured minerals, and accelerate the development of diversified markets.” Flexible and fair to these materials.”