4 weeks ago
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February 2, 2026 — 5:00am
Australian miners stand to benefit from an accelerating international push to break China’s stranglehold over rare earths, analysts say, as the Trump administration convenes new talks with the Albanese government and other allies to build alternative supply chains for the coveted minerals.
The federal government is vying to position Australia as a major supplier of rare earths – a set of 17 metals used in an array of products such as electric motors, wind turbines and missiles – amid growing alarm over China’s willingness to use its market dominance as leverage in diplomatic disputes.
ASX-listed rare earth miners, many of which hold tenements over important orebodies and are seeking to start or ramp up production, suffered double-digit share price falls in a panicked investor sell-off last week as reports emerged, suggesting that the White House had walked back plans to set price floors for miners and refiners.
But that reaction appeared “overdone”, said Reg Spencer, an analyst at Canaccord Genuity, who pointed to intensifying efforts by the Trump administration to work with allies on ways to turbocharge the development of new non-Chinese supplies.
“We believe that the United States government remains committed to the development of ex-China critical mineral supply chains, and that it will look to utilise other mechanisms,” he said.
The comments come after Australia’s resources minister, Madeleine King, was invited to attend a meeting of US allies in Washington this week. US Secretary of State Marco Rubio is expected to use the meeting to try to secure a consensus on a pricing mechanism to insulate rare earths refiners and extractors.
As the US and other countries worry about relying too heavily on China, which accounts for 70 per cent of rare earth mining and 90 per cent of the market for separation and processing, Australia was “stepping up to lead on critical minerals and rare earths globally”, King said.
The Albanese government has earmarked billions of dollars for tax credits, cheap loans and equity stakes for companies building critical mineral mines, processing plants and refineries. It also remains in talks with industry leaders to set up a national stockpile, which would guarantee minimum prices for producers of antimony, gallium and rare earth metals.
“Australia is working to attract more foreign capital – both from commercial and government sources – to process more critical minerals and rare earths here and to build secure supply chains to partners like the US, Japan, Korea, the United Kingdom and the European Union,” King said.
Prime Minister Anthony Albanese and US President Donald Trump signed an agreement to develop a secure supply chain for critical minerals and rare earths when they met at the White House in October. The government has said it subsequently received interest in similar deals from Europe, Japan, South Korea and Singapore.
The long-running push by Western nations to diversify critical mineral supply chains has taken on new urgency as Beijing demonstrates an increased willingness to use its market-dominant position as leverage in geopolitical and economic disputes.
During tariff negotiations with the Trump administration last year, China announced a broad package of export curbs, which temporarily cut off global shipments of several sought-after heavy rare earth metals and rare earth magnets.
Chinese miners and refiners are essential suppliers to foreign manufacturers of products as diverse as consumer goods such as cars, computers, smartphones, camera lenses and LED lights, and military hardware including fighter jets and precision-guided weapons.
Last week’s share market sell-off, which wiped millions off the value of Australian miners such as Arafura Rare Earths, Lynas Rare Earths and Iluka Resources, may have been led by a misconception that a one-off deal struck between the US government and Californian company MP Materials to guarantee a $110-a-kilogram rare earth price was going to be available industry-wide, analysts said.
“There was an expectation, rightly or wrongly, that price floors from the US government would be available to everyone and anyone developing a rare earths project,” Spencer said. “That was never really the case.”
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