U.S. President Donald Trump, and Anthony Albanese, Australia's prime minister, shake hands outside the West Wing of the White House in Washington, DC, US, on Monday, Oct. 20, 2025.
Shares of some of Australia's largest critical metals and rare earths companies surged on Tuesday morning, following the announcement of a massive minerals deal between Washington and Canberra worth up to $8.5 billion, before many later pared gains.
The agreement — signed by U.S. President Donald Trump and Australian Prime Minister Anthony Albanese on Monday — includes funding for multiple projects aimed at boosting the supply of key materials used in defense manufacturing and energy security.
Lynas Rare Earths , Australia's largest rare earths producer by market capitalization, fell 7.6% after an early rally. Mineral sand miner Iluka Resources slipped 0.1%, while lithium producer Pilbara Minerals added around 2.6%.
Other smaller rare earth miners fared better, with VHM ending the day up 20%, Northern Minerals popped over 1.9% and Latrobe Magnesium, Australia's primary producer of the critical metal magnesium, climbing over 15.4%.
NYSE-listed Alcoa , which is developing a project in Western Australia to recover and refine the critical metal gallium, was named as one of the two priority projects under the new minerals deal. Washington will make an equity investment in the initiative, sending Alcoa shares — also traded in Sydney through depositary receipts — ending the trading session up 7.5%.
Rare earths and critical metals are essential for high-tech products such as electric vehicles, semiconductors and defense equipment.
China, the global leader in the production of rare earths and many other critical minerals, has tightened export controls on the materials amid a trade war with the U.S., accelerating international efforts to diversify global supply chains.
Albanese said the two countries will each contribute $1 billion over the next six months for projects that are "immediately available."
However, a White House fact sheet later stated that Washington and Canberra will invest more than $3 billion in critical mineral projects over the same period, describing the agreement as a "framework."
The White House also said that the Export-Import Bank of the United States will issue seven letters of interest for more than $2.2 billion in financing, potentially unlocking up to $5 billion in total investment.
Australia and the U.S. will also work to adopt a "pricing framework" for rare earths — potentially including price floors — to stabilize global markets and offset years of price volatility.
One of the biggest threats to U.S. mineral security is China's strategy of flooding the market with excess supply, which has driven prices so low that mines in the U.S. and Australia become unviable, according to a report released Monday by the Center for Strategic and International Studies.
The Washington-based think tank described Australia as the U.S.'s "most important partner in countering China's dominance in rare earths," noting it attracted $64 million in exploration investment last year, about 45% of the global total, making it the world's top destination for rare earth exploration in 2024.