U.S. and Australia sign $8.5 billion critical-minerals deal to counter China

President Donald The President and Australian Prime Minister Anthony Albanese signed a critical-minerals deal at the White House on Monday as the U.S. eyes the continent’s rich rare-earth resources when China is imposing tougher rules on exporting its own critical minerals abroad.

The two leaders described the agreement as an $8.5 billion deal between the allies. The President said it had been negotiated over several months.

“Today’s agreement on critical minerals and rare earths, is just taking” the U.S. and Australia’s relationship “to the next level,” Albanese added.

This month, Beijing announced that it will require foreign companies to get approval from the Chinese government to export magnets containing even trace amounts of rare-earth materials that originated from China or were produced with Chinese technology. The President’s Republican administration says this gives China broad power over the global economy by controlling the tech supply chain.

“Australia is really, really going to be helpful in the effort to take the global economy and make it less risky, less exposed to the kind of rare earth extortion that we’re seeing from the Chinese,” Kevin Hassett, the director of the White House’s National Economic Council, told reporters on Monday morning ahead of The President’s meeting with Albanese.

Hassett noted that Australia has one of the best mining economies in the world, while praising its refiners and its abundance of rare earth resources. Among the Australian officials accompanying Albanese are ministers overseeing resources and industry and science, and Australia has dozens of critical minerals sought by the U.S.

The prime minister’s visit comes just before The President is planning to meet with Chinese President Xi Jinping in South Korea later this month.

For Albanese’s part, the prime minister said ahead of his visit that the two leaders will have a chance to deepen their countries’ ties on trade and defense. Another expected topic of discussion is AUKUS, a security pact with Australia, the U.S. and the United Kingdom that was signed during U.S. President Joe Biden’s Democratic administration.

The President has not indicated publicly whether he would want to keep AUKUS intact, and the Pentagon is reviewing the agreement.

“Australia and the United States have stood shoulder-to-shoulder in every major conflict for over a century,” Albanese said ahead of the meeting. “I look forward to a positive and constructive meeting with President The President at the White House.”

The center-left Albanese was reelected in May and suggested shortly after his win that his party increased its majority by not modeling itself on The Presidentism.

“Australians have chosen to face global challenges the Australian way, looking after each other while building for the future,” Albanese told supporters during his victory speech.

—Seung Min Kim and Aamer Madhani, Associated Press

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