US Miners Gain as US-Australia Pact Pledges $2B to Secure Minerals
The agreement aims to build a resilient critical minerals supply chain, challenging China's dominance and boosting investment in domestic producers.
The United States and Australia have launched a landmark agreement to bolster the critical minerals supply chain, committing an initial $2 billion to accelerate the development of resources essential for defense, clean energy, and high-technology manufacturing.
The pact, part of a strategic push to reduce reliance on Chinese processing and production, is set to directly benefit US-listed miners by injecting capital into new projects and creating a more favorable investment environment. Companies like MP Materials (MP), the largest rare earths producer in the Western Hemisphere, and Lithium Americas (LAC) are positioned at the center of this geopolitical initiative.
The United States–Australia Framework for Securing of Supply, signed on October 20, mobilizes at least $1 billion from each nation over the next six months. This funding is the first step in an $8.5 billion pipeline of priority projects designed to create what the agreement calls “diversified, liquid, and fair markets” for materials like lithium, cobalt, and rare earth elements.
This government-led intervention comes as Western nations grapple with supply chains heavily dominated by a small number of countries. The strategic importance of these minerals—which are vital components in everything from electric vehicle batteries and wind turbines to F-35 fighter jets—has elevated their security to a matter of national priority.
For investors, the pact provides a significant de-risking event for a sector that has historically struggled to compete with state-subsidized international players. The framework includes provisions for price support mechanisms, aiming to ensure the profitability and long-term viability of Western mining and processing operations.
MP Materials, with a market capitalization of over $12 billion, is a direct beneficiary of this intensified government focus. The U.S. Department of Defense has already deepened its partnership with the company, committing to a preferred stock purchase and a 10-year price floor for its Neodymium-Praseodymium (NdPr) products, a key component in high-performance magnets.
Lithium Americas, which is advancing its Thacker Pass project in Nevada—one of the largest known lithium deposits in the world—also stands to gain from the improved funding landscape and strategic backing. The company, valued at approximately $1.65 billion, is central to U.S. ambitions to build a domestic battery supply chain from the ground up.
The Australia agreement is the latest in a series of aggressive moves by Washington to onshore critical mineral production. It follows the establishment of a new $5 billion critical minerals fund in partnership with private equity firm Orion Resource Partners and Abu Dhabi's ADQ. Similarly, the Pentagon recently funded a joint development effort between NioCorp Developments and Lockheed Martin to advance scandium-based defense technologies.
Despite the clear policy momentum, industry experts caution that significant hurdles remain. According to an analysis by the Center for Strategic and International Studies (CSIS), securing adequate project financing remains a primary bottleneck to scaling U.S. production. While the new pact provides substantial public-sector support, the ultimate success of this strategic shift will depend on mobilizing vast amounts of private capital to build out the mines and processing facilities needed to rival established global players.