President Donald Trump signed an agreement with visiting Australian Prime Minister Anthony Albanese to boost access to critical minerals and rare earths, as the U.S. looks to reduce reliance on Chinese supplies.

“In about a year from now, we’ll have so much critical mineral and rare earths that you won’t know what to do with them,” Trump said October 20 at the White House, during a meeting between the two leaders.

Albanese said the deal represented an $8.5 billion “pipeline that we have ready to go.” He hailed the minerals and rare earths pact as taking the nations’ economic and defense cooperation “to the next level.”

The leaders said the agreement would include Australian processing of rare earths, with Albanese adding that Australia had “capacity” to expand those efforts. The U.S. and Australia pledged to protect their domestic markets from “unfair trade practices,” including through adopting trading standards that involve “price floors or similar measures,” according to the text of the deal circulated by Albanese’s office.

The deal will begin with the U.S. and Australia each paying more than $1 billion over the next six months for initial projects, with some further projects in both countries, and one development to include Japan, the Australian prime minister said. The document did not include details on which entities would provide that financing.

The Pentagon will help fund the construction of a 100 metric ton-per-year advanced gallium refinery in Western Australia as part of the deal, according to the White House. The Export-Import Bank of the United States is also issuing letters of interest for more than $2.2 billion in financing on critical mineral projects.

The sitdown, Albanese’s first White House visit since Trump retook power, comes as the Australian leader looks to shore up ties with the U.S., using his nation’s wealth in critical minerals as leverage. China’s move to impose unprecedented export restrictions on rare earths has rattled economies across the globe, with U.S. Treasury Secretary Scott Bessent saying last week that allies — including Australia — are in talks about a united response. 

When asked about the pact, Chinese Foreign Ministry spokesman Guo Jiakun said that “the formation of global production and supply chains is the result of market forces and business decisions.”

“Countries rich in critical mineral resources should play an active role in ensuring the security and stability of industrial and supply chains, and in safeguarding normal economic and trade cooperation,” he added at the regular press briefing in Beijing on October 21.

Australia, which holds the world’s fourth-largest deposits of rare earths, has sought to position itself as a viable alternative to China for supplies crucial for industries covering semiconductors, defense technology, renewable energy and other sectors. The country is also the base of the only producer of so-called heavy rare earths outside China, through Lynas Rare Earths Ltd.

Efforts to secure a deal were underway ahead of Albanese’s visit. More than a dozen Australian mining firms held meetings last month in Washington with officials from various agencies, and were told the U.S. was looking for ways to obtain equity-like stakes in companies, according to people familiar with the talks, part of a broader American strategy to develop supply chains to compete with China. 

Australian Treasurer Jim Chalmers met with U.S. investors from firms including Blackstone Inc. and Blue Owl Capital in New York last week to pitch his country as a stable, resource-rich destination for global capital and a key partner in efforts to diversify critical supply chains.

There has been growing confidence that Australia and the U.S. would begin discussions on how Canberra could provide secure rare earth shipments and bolster U.S. capabilities. That belief has sparked investor enthusiasm, sending shares of miners such as Lynas up by over 150% during the past 12 months.

Submarine Sales

Trump said on October 20 that the two leaders were discussing “trade, submarines, lots of other military equipment,” with national security matters high on the agenda. The U.S. president has pressed Canberra to increase defense spending to 3.5% of gross domestic product from around 2% now, a move Australia has so far resisted.

Australia agreed to purchase $1.2 billion in underwater drones, and take delivery of a first tranche of Apache helicopters in a separate $2.6 billion deal, the White House said. 

Another key issue is an arrangement for the U.S. under the Aukus pact to sell Australia as many as five nuclear-powered Virginia-class submarines by the early 2030s. Australia and the UK would then design and build a next-generation submarine partly using American technology, due to be completed in the 2040s.

The Aukus agreement was signed by former President Joe Biden’s team in 2021 to counter Chinese military expansion in the Indo-Pacific region. The submarine deal is central to the nations’ collective security agreement. The Trump administration, however, is reviewing the pact to determine if it is “aligned with the President’s America First agenda,” according to the Pentagon, raising fears that Trump could abandon it.

Officials from Australia and the U.K., though, have downplayed that prospect. And Trump suggested on October 20 that he planned to push forward with submarine sales.

“We are doing that,” Trump said in response to a question about expediting the sales. “We have the best submarines in the world, anywhere in the world, and we’re building a few more, currently under construction. And now we’re starting, we have it all set with Anthony.”

The U.S. president also praised military cooperation between the two allies.

Still, Trump suggested he was unlikely to offer Australia tariff relief, which Canberra has sought as a nation that runs a trade deficit with the U.S. Trump hit Australian goods with a 10% duty, the baseline the president imposed on many other countries’ products.

“Australia pays very low tariffs — very, very low tariffs,” Trump said.

Albanese faces a balancing act on trade as he meets Trump. The Australian leader has also sought closer trade ties with China, his country’s largest trading partner. Albanese visited Beijing in July, his second visit since taking office.