Australian miners would link with Department of War in Albanese-Trump deal

2 days ago 6

The US Department of War would invest directly in Australian critical minerals projects to source rare earths needed for American fighter jets under a mooted deal that has forced Labor to quell fears of taking the United States’ side in any potential trade war with China.

The minerals indispensable for green energy, defence and smartphone technology will be a focus of Prime Minister Anthony Albanese’s meeting with US President Donald Trump on October 20, as will the under-review AUKUS pact.

Treasury Secretary Scott Bessent (right) raised the alarm about China’s control of critical minerals supply this week.

Defence Industry Minister Pat Conroy on Friday appeared to give the most confident prediction on the timing of the AUKUS review’s completion, saying it might be “imminent”. Conroy said he was citing Defence Minister Richard Marles, but Marles has not used such language. Australian officials have received mixed messages from US counterparts about whether the probe would be completed by the time of the Trump-Albanese meeting.

Ministers and officials are coy about the details of the highly anticipated minerals deal with the US even though it has been months in the planning and likely to be announced next week.

In meetings with miners this month, Australian officials have canvassed the prospect of direct investment from the US Department of War, previously called the defence department. According to industry sources, unauthorised to speak publicly, officials have discussed the creation of similar models to the Mountain Pass rare earth facility in California backed by a Department of War loan facility.

Intent on finding minerals from nations outside China, Trump’s One Big Beautiful Bill passed in July opened up $US100 billion ($155 billion) in available loan funds specifically for critical minerals and related industries. Australia has a plentiful supply of key rare earths such as dysprosium and terbium used in advanced defence technology like F-35 jets, each plane requiring 415 kilograms of critical minerals.

“We know that American companies desperately need critical minerals, and Australia is very well placed to service that need,” Treasurer Jim Chalmers said from the US on Friday.

“No doubt it will be part of the discussions that Prime Minister Albanese has with President Trump next week.”

Australia’s unique supply of sought-after minerals gives Albanese leverage going into the White House meeting.

For months, debate around the US-Australian alliance centred on the US demands of Australia to spend more than 3 per cent of GDP, equating to tens of billions each year, on defence. But the salience of critical minerals has skyrocketed as China has limited exports to the world, threatening the sovereign manufacturing capacity of the US and other competitors.

China’s move has sparked a 100 per cent tariff threat from Trump, causing havoc in global sharemarkets and creating the spectre of a trade war between Australia’s major security ally and its biggest trading partner.

US Treasury Secretary Scott Bessent said this week that Western nations should “decouple” from China, a notion quickly shut down by Chalmers, who met Bessent this week as he spruiks Australia’s economic relationship with the US.

“I think it’s well understood here in Washington, DC, that Australia’s put a lot of effort into stabilising that key economic relationship with China,” Chalmers said.

“The views that Secretary Bessent expressed is not the first time they’ve expressed views of that nature.

“Australia’s interests are best served by more trade, not by more trade barriers.”

A spokesman for China’s Ministry of Foreign Affairs, Lin Jian, pushed back on Bessent’s claim in a press conference on Thursday.

“China’s export control measures are consistent with international practice and are taken to better safeguard world peace and regional stability, and to fulfil China’s non-proliferation and other international obligations,” he said.

Conroy talked up the AUKUS pact on Friday.

“At a congressional level, I was meeting with senior leaders in Congress who were evangelical about the importance of AUKUS, who expressed real confidence that it would continue, and I also met with real positivity in my engagement at the Pentagon on the same issue,” he said.

The prime minister will depart for the US on Sunday and meet with Trump in the Oval Office, likely in the early hours of Tuesday morning, Australian time.

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