SYDNEY: The United States and Australia extended financial support to several Australian companies as part of a wide-ranging critical minerals agreement aimed at countering China’s hold over the industry, sending the firms’ shares sharply higher on Tuesday.
Under the deal signed by U.S. President Donald Trump and Australian Prime Minister Anthony Albanese, the countries pledged to invest at least $1 billion each over the next six months in mining and processing projects and to set a price floor for critical minerals, a step long sought by Western miners.
The U.S. Export-Import Bank (EXIM) said it sent seven Letters of Interest (LOIs) totalling more than $2.2 billion to advance U.S.-aligned critical minerals projects in Australia.
The LOIs went to Arafura Rare Earths, Northern Minerals, Graphinex, Latrobe Magnesium, VHM, RZ Resources and Sunrise Energy Metals. They
represent the next phase in securing the minerals that power American manufacturing, national security, and other strategic industries, EXIM said in a statement.
Shares of Arafura were up 8% in morning trading, while shares of Northern Minerals, Latrobe Magnesium, and VHM jumped 11%, 15% and 20% respectively, although Sunrise was trading lower. That compared with a broader market gain of 0.7%.
The governments said they would also help advance a plan by U.S. aluminium producer Alcoa to build a gallium plant alongside its alumina refinery in Western Australia that could provide up to 10% of global gallium supply.
That announcement pushed Alcoa’s Australian-listed shares 8% higher.
Gallium, recovered as a byproduct during the alumina refining process, is a critical mineral for the technology sector, especially the semiconductor and defense industries.
Australia said in a statement that it would provide up to $200 million in concessional equity financing for the project, which includes offtake rights for the Australian government, while the U.S. would also make an equity investment with offtake rights.
Alcoa in August signed a joint development agreement with Japan Australia Gallium Associates (JAGA), a venture between the Japanese government and Sojitz Corp, for the project.
The company said that once it finishes feasibility work, a special purpose vehicle owned by the U.S. and Australian governments and Alcoa is expected to enter a joint venture with JAGA to construct the plant, which Alcoa would operate.
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