US, Australia strike $8.5B rare earths deal to cut China reliance

The United States and Australia have signed a landmark $8.5 billion agreement to develop rare earth and critical mineral projects, aiming to reduce dependence on China and strengthen supply chains vital for defense, technology, and manufacturing. The deal includes an initial $1 billion investment over six months from both countries, with the White House later clarifying that over $3 billion will be invested in critical mineral projects in that period. Additionally, the U.S. Export-Import Bank will issue letters of interest totaling more than $2.2 billion, potentially unlocking up to $5 billion in further investments. Key projects involve rare earth processing in Australia, a trilateral venture with Japan, and a Pentagon-backed gallium refinery in Western Australia. This initiative comes amid escalating U.S.-China trade tensions, particularly after China imposed strict export controls on rare earths, which are essential for high-performance magnets used in defense systems, semiconductors, robotics, and electric vehicles. The U.S. aims to build a supply chain