Shares of rare earth mining companies surged in Sydney on Tuesday after U.S. President Donald Trump and Australian Prime Minister Anthony Albanese signed a historic agreement to boost investment in critical minerals — a deal described by industry experts as a “shot in the arm” for Australia’s mining sector and a major step in reshaping global supply chains.
The pact, finalized at the White House on Monday, commits the United States and Australia to invest $2 billion over the next six months in rare earth and critical mineral projects, with additional funding expected to follow. Together, both nations aim to advance an $8.5 billion pipeline of projects designed to reduce dependency on China, which currently dominates global rare earth production.
Major Boost for Australian Miners
The U.S. Export-Import Bank (EXIM) is at the center of the new agreement. It announced that it is considering $300 million in financing for Arafura Rare Earths Ltd. to develop its Nolans project in Australia’s Northern Territory. The company’s stock surged as much as 29% following the announcement. Arafura, backed by mining billionaire Gina Rinehart, also received conditional approval for $100 million in funding from the Albanese government.
EXIM further revealed that it had issued letters of interest to six additional mining firms totaling more than $2.2 billion in potential financing. Among them were VHM Ltd. and Northern Minerals Ltd., whose shares soared 30% and 19%, respectively, as investors reacted to the influx of government-backed funding.
The new financing commitments have been widely welcomed by Australian miners, who have struggled in recent years to attract private capital due to volatile commodity prices. Analysts say the U.S.-Australia partnership marks a turning point for the sector, signaling that governments are now prepared to step in and accelerate development.
Gallium and Semiconductor Projects Gain Momentum
The deal also extends beyond rare earths. The Trump administration and Albanese government unveiled funding for gallium projects — a metal vital to defense technologies and semiconductor manufacturing. Sydney-listed shares of Alcoa Corp. climbed nearly 10% after confirmation that its joint venture with Japan’s Sojitz Corp. in Western Australia would receive up to $200 million in equity financing.
Other key producers, such as Lynas Rare Earths Ltd. — currently the only major heavy rare earths producer outside China — saw an early 4.7% rise before easing later in the session. Iluka Resources Ltd., a mineral sands producer aiming to enter the rare earth market, gained over 9%.
Strategic Move Amid Rising U.S.-China Tensions
This new minerals pact reflects deepening geopolitical tensions between Washington and Beijing. China currently controls more than 70% of the global rare earth market, giving it significant leverage over industries that rely on these materials, from electric vehicles and wind turbines to advanced weapon systems and microchips.
“It’s a golden opportunity for Australia, and we intend to maximize it,” Australian Treasurer Jim Chalmers told Bloomberg Television from Incheon, South Korea. “Australia can and will be a world leader in the supply of rare earths and critical minerals. The framework agreed with President Trump today is an important part of that effort.”
For the U.S., the agreement represents a crucial step toward securing alternative supply chains, strengthening economic ties with a long-standing ally, and reducing strategic vulnerabilities to Chinese export restrictions.
Investor Confidence Returns
Industry observers say the deal could reshape how critical minerals projects are financed. “We might see a continuation of investor interest as markets speculate on who could be next to receive funding,” said Reg Spencer, a mining analyst at Canaccord Genuity in Sydney. “It’s a clear signal that governments are serious about developing this industry.”
However, experts caution that most of the projects supported by the agreement are still several years away from full production. Northern Minerals’ A$600 million ($390 million) Browns Range project in Western Australia — one of the most advanced — will require at least two years to complete and remains dependent on Iluka Resources’ planned refinery for processing materials.
Still, optimism is high across the sector. “It’s a real confidence booster,” said Northern Minerals CEO Shane Hartwig. “It shows that governments are truly committed to building resilient supply chains. Once government money comes in, private investors usually follow. This could bring several key projects into production sooner than expected.”
A New Era for Critical Minerals
The Trump-Albanese agreement marks a milestone in the race to diversify global sources of rare earths and critical minerals. With both nations now committing billions in funding and political backing, industry leaders believe this could usher in a new era of mining investment — one that strengthens Western control over vital resources and reduces the world’s reliance on China.
As governments in Washington and Canberra prepare to identify the next wave of projects, analysts expect continued market enthusiasm and fresh opportunities for collaboration. For Australia’s mining sector, long seen as a global powerhouse, the message is clear: the world’s demand for rare earths has just become its biggest opportunity.