24 March 2026
Australia’s role in the global race to secure critical minerals is rising in prominence as Western economies step up efforts to develop an independent supply chain.[1]
The US administration is advancing plans to develop an all-new rare earth supply chain. In January, the White House launched Project Vault, a US‑backed reserve to potentially stockpile rare earths and other security‑critical minerals worth US$12 billion.[2] It follows the US government’s acquisition of a stake in MP Materials, Trilogy Materials, Lithium Americas and a US-backed fund securing 40% of Glencore's cobalt mines in the Democratic Republic of Congo.[3]
The US is also looking to forge an alliance with like-minded partners to create a ‘floor’ so that Chinese rare earth producers cannot undercut the market to a degree that jeopardizes emerging industry initiatives.[4]
Tellingly, the plans appear to have been set in motion just a few months after the US and Australia agreed to invest US$1 billion in mining and processing projects and establish a price floor for critical minerals, signaling Australia’s importance in developing a non-Chinese supply chain.[5]
Australia holds one of the world’s largest rare-earth reserves (around 5.7 million tons of rare earth oxides equivalent) and is already the second-largest producer globally after China.[6] Australia was also the first to declare that it would develop a A$1.2 billion critical minerals reserve, focusing on antimony, gallium, and rare earth elements.[7]
As global demand for critical minerals deepens, Australia's critical minerals supply chain is well placed to benefit. Equity-backed financing can allow long-term shareholders to unlock liquidity and take a view on Australia’s combination of resource depth, political stability and growing midstream capability as supply-chain economics evolve.
Australia's miners in the spotlight
Chinese companies currently account for more than 90% of rare earth refining, and analysts expect this dominance to continue in the coming years. Geopolitical upheaval, however, has introduced considerable uncertainty around the sector and contributed to high volatility in commodity prices and equity valuations. The US-China trade truce agreed in Korea last year, which lifted Chinese export controls, is due to expire after 12 months.[8]
However, the new US-Australia consensus on the need to improve supply chain security is an enduring long-term strategic initiative. It has the potential to elevate ASX-listed miners into becoming preferred partners for the procurement of rare earths, lithium, and other dual-use materials vital to technology manufacturing, defense, and the energy transition.[9] Australian earnings from rare earths and other critical minerals (excluding lithium/nickel) are forecast to jump from A$3.8 billion in 2024–25 to A$5.9 billion by 2026–27.[10]
This potential is bringing Australia’s miners into the spotlight for global investors and trading partners.
Japan’s efforts to reduce its dependency on China’s rare earth producers provides a valuable example. Since China’s unofficial rare‑earth export ban in 2010, imposed during a territorial dispute, Japan has reduced its dependence on Chinese supplies to 60% from nearly 90%, boosting its reliance on Australian mining expertise in the process.[11]
Days after China ended its rare‑earth embargo in 2010, a Japanese investment agency arranged a US$250 million pact between commodity trader Sojitz and Australia’s Lynas Rare Earths, securing Japanese supply while stabilizing Lynas financially.[12] Lynas is now the world's largest non-Chinese rare earth producer, accounting for 12% of global rare‑earth oxides and supplying a third of Japan’s demand — including most of its light rare earths. Japan expanded these agreements in recent years to lock in heavy rare earths, where reliance on China is still high.[13]
While Australia has long been a global supplier of minerals, it now needs more of its miners to succeed in executing the difficult leap into downstream processing, refining raw resources into high-purity chemicals and metals. The signs are positive: some zircon producers, for instance, have learned how to extract by‑products such as dysprosium and terbium — among the most sought‑after rare earths.[14]
Australian companies continue to face significant challenges when it comes to competing with Chinese peers on costs. As more governments look to reduce risks and secure their access to future-facing commodities, however, the long-term outlook for the sector is positive. Long-term offtake agreements, sovereign price floors and strategic reserves could gradually create a two-tier market: a commercial and a strategic one.[15]
Deepening demand
Rare earth demand is often attributed to the rise of electric vehicles, yet there are many other uses. Neodymium-praseodymium magnets, for example, are essential for wind turbines, robotics, drones and advanced defense systems. Defense procurement cycles — which are less price-sensitive than consumer electronics — could anchor the long-term development of the sector and contribute to a geopolitical premium for firms contributing to Australia’s critical minerals.
Long-term shareholders can consider equity-linked financing to unlock fully flexible funding for investments in the sector, as well as to manage downside risks in a volatile market.
As Australia becomes an increasingly important player in the transformation of global rare-earth supply chains, businesses in this critical sector are emerging as key actors in a re-engineered global minerals market.
[1] https://www.csis.org/analysis/unpacking-us-australia-critical-minerals-framework-agreement
[2] https://www.reuters.com/business/autos-transportation/trump-announces-creation-critical-mineral-reserve-2026-02-02/
[3] https://asia.nikkei.com/business/technology/tech-asia/us-faces-decadelong-road-to-loosening-china-s-grip-on-rare-earths
[4] https://www.scmp.com/news/us/diplomacy/article/3342433/washington-pitches-critical-minerals-plan-allies-counter-beijings-dominance
[5] https://www.nytimes.com/2025/10/20/us/politics/china-critical-minerals-trump-australia.html
[6] https://pubs.usgs.gov/periodicals/mcs2025/mcs2025-rare-earths.pdf
[7] https://www.bloomberg.com/news/articles/2026-01-12/australia-announces-critical-minerals-for-its-strategic-reserve
[8] https://www.reuters.com/world/china/rare-earth-miners-fall-after-us-china-truce-pause-tariffs-export-curbs-2025-10-27/
[9] https://www.industry.gov.au/publications/united-states-australia-framework-securing-supply-mining-and-processing-critical-minerals-and-rare-earths
[10] https://www.industry.gov.au/publications/resources-and-energy-quarterly-december-2025
[11] https://asia.nikkei.com/business/technology/tech-asia/inside-japan-s-long-battle-to-de-chinafy-its-rare-earth-supply-chain
[12] https://www.newsecuritybeat.org/2024/08/how-to-diversify-mineral-supply-chains-a-japanese-agency-has-lessons-for-all/
[13] https://asia.nikkei.com/business/materials/japan-s-sojitz-to-expand-australian-rare-earth-imports
[14] https://www.bbc.com/news/articles/cgm2z91mvlvo
[15] https://www.reuters.com/markets/commodities/west-needs-its-own-pricing-escape-chinas-rare-earths-grip-2026-02-20/
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