Making headlines this week, Prime Minister Anthony Albanese and US President Donald Trump signed a landmark bilateral critical minerals framework, ‘The United States-Australia Framework for Securing of Supply in the Mining and Processing of Critical Minerals and Rare Earths’ (the Framework).
The Framework aims to deliver a secure supply chain (including mining, separating and processing) for critical minerals and rare earths in Australia and the US through economic policy tools and coordinated investment. The Framework is intended to provide an accelerated pipeline of priority projects to be delivered by the two nations, and in turn, reduce global dependence on China and provide opportunities for Australian producers in international markets. Supply chain security has long been spoken about between the US and Australia with several proposals having been agreed by previous governments from both countries. Given recent announcements of greater Chinese export controls, there has been ongoing pressure on all sides for further action.
As part of the Framework, Australia and the US have committed to:
- take measures to accelerate and streamline approval processes for critical mineral projects;
- mobilise government and private sector support for capital and operational expenditures by way of guarantees, loans and offtake arrangements;
- implement pricing control mechanisms, including price floors or similar measures to address challenges associated with international pricing;
- develop new or strengthen existing authorities and tools that review and deter the sale of critical minerals and rare earth assets for national security reasons; and
- establish a US–Australia Critical Minerals Supply Security Response Group to identify priority minerals, address supply vulnerabilities and develop a plan to accelerate delivery of processed minerals under the Framework.
In conjunction with the Framework, the US and Australia will each invest approximately USD$1 billion into priority critical minerals projects in Australia and the US within the next six months. This includes investment into a Western Australian gallium plant owned by Alcoa-Sojitz and the Arafura Nolans project in the Northern Territory, as announced on Tuesday.
Although largely just a further codification on what was already understood by industry, the Framework represents a clear signal to the market that government has a major, ongoing role to play in supporting critical mineral projects and that financial backing of projects is required and forms a significant part of that support.
We are eager to discover how the Framework will play out in practice, particularly the role and function of the proposed Mining, Minerals and Metals Investment Ministerial, which will be convened within the next 180 days. Additionally, it is unclear at this stage to what extent the Framework will be reflected by changes to FIRB’s policies or review functions.
We will continue to monitor the outcomes of the Framework and how this will impact critical mineral projects moving forward.
The Framework can be found here.
