Critical Minerals Deal Signals Turning Point for Australia
Prime Minister Albanese and President Trump sign the critical minerals deal. Photo: AP News
In the past week, Australia has further defined its relationship to two major global powers. On Oct. 20, Australian Prime Minister, Anthony Albanese, and the United States President, Donald Trump, signed a deal entailing extensive funding of critical minerals and rare earths. The collaboration aims to increase Western possession of essential substances for development, as well as to combat China’s dominance in rare earth production. In addition to the partnership, Australia accused China of operating its military dangerously in accordance with their patrol jet flying over the South China Sea.
Australia and the United States have been long-term allies, with Albanese noting that they have “stood shoulder-to-shoulder in every major conflict for over a century”. Trump has commented on the solidity of their political alliance, but the Australian prime minister (alongside previous prime ministers) has voiced frustration with the incumbent on multiple occasions. Australian parliament members have expressed their belief that Albanese’s distance from the United States gave him an advantage in the last election, considering polls signifying public distrust in Trump. Trump’s tariffs imposed a ten percent import tax on the majority of Australian goods, with an unprecedented 50% dedicated to steel and aluminum. Albanese reportedly viewed this as a breach of their historic free trade agreement.
The critical minerals deal demonstrates that despite doubts, Australia and the United States will continue to collaborate. Due to Australia’s possession of “five percent of the world’s reserves of natural earth’s”, the agreement plans to counter China directly. Billions of dollars from both sides will be donated to fund multiple projects as part of the accord. Notably, a gallium plant located at the aluminum company, Alcoa’s site in Western Australia and the Arafura Rare Earths project will be prioritized. Trump has promised significant results within a year, with a pipeline of critical mineral projects being created in the next six months.
Alcoa, an Australian aluminum company, will be one of the two priority projects for Australia in the upcoming year. Photo: AP News
Trump and Albanese’s concerns of China’s rising power in global production are well justified. China has achieved a close to complete control over the substances, providing the nation with a monopoly over renewable energy, advanced military technology, car manufacturing, and more. It produces about 90% of the world’s rare-earth magnets, making the state a pillar for global supplies. In the past, the country has poured rare-earths into the global market to lower prices, hurting competing attempts to participate in the sale of critical minerals. Australia itself has a significant dependence on China’s economy. Beijing is Australia’s largest trading partner, which buys a third of its total exports. This includes a majority of iron ore, and coal but also extends to agricultural products such as beef. Three-quarters of Australia’s iron ore exports are intrinsically linked to Beijing, making China a significant factor in its mining industry. Aside from challenging China, the recent deal between Albanese and Trump may likely lead to increased Australian independence in manufacturable sectors.
A day before the critical minerals deal was signed by the two leaders, Australia stated that China allegedly released flares in close proximity to their patrol jet. The P-8A aircraft was flying over the South China Sea when it was abruptly targeted by a Su-35 Fighter Jet – just as Albanesee was directed to a meeting with President Trump. The Australian government has complained, denoting the event as dangerous and unprofessional, while the Chinese parliament claimed that Australia’s actions were provocative and an infringement on China’s sovereignty. Similar events have taken place in the recent past, with Australia accusing China of attacking an Australian plane in February and of dropping flares on an Australian navy helicopter above the Yellow Sea in May. China has maintained that Australia “intruded into its airspace”, framing its decisions as retaliatory rather than aggressive.
Since the beginning of the 21st century, China has moved towards an increasingly assertive maritime strategy. Many global affairs scholars believe that China has shifted their foreign policies altogether – quickly protecting their claims on islands, water, and airspace. The latest disputes with Australia are an important example of China’s interest in retaining command over their sovereignty. As Australia works closely with the United States, hoping to act as a competitor for China’s global dominance, their strategic partnership may be subject to change.
The critical minerals deal is an important indicator of Australia’s relationship to other political powers. Its long lasting friendship with the United States has hit bumps in the road due to Trump’s new economic policies. The agreement serves as an opportunity to strengthen a historical alliance, and simultaneously weaken China’s hold on the international rare earths market. While the deal vows to give Australia and the United States more access to clean energy, military development and more, the future of Australia’s relationship with China remains unclear.
Tags: Australia | USA | China | Trade | Mining | Economy | Southeast Asia | Oceania