U.S. and Australia sign critical minerals agreement with $8.5 billion project pipeline

President Donald Trump^[1] and Australian Prime Minister Anthony Albanese on Monday signed an agreement on critical minerals and rare earths^[2] that Albanese said includes plans for projects worth a total of up to $8.5 billion.

Albanese, during a meeting with Trump at the White House, said, “There will be $1 billion contributed from Australia and the United States over the next six months with projects that are immediately available.”

But the White House subsequently issued a fact sheet that said the countries would invest more than $3 billion in critical mineral projects over the next six months. It described 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, unlocking up to $5 billion in total investment.

CNBC has asked the White House and the Australian prime minister’s office for clarification on the discrepancy between what Albanese said and what the fact sheet said.

The framework agreement between Australia and the U.S. comes as the Trump administration is seeking to establish a critical mineral and rare earths supply chain that is not dependent on China.

Rare earths are a subset of critical minerals. They are used to produce magnets that are crucial inputs in U.S. weapons platforms, semiconductor manufacturing, robotics and electric vehicles among other applications.

China dominates the global rare earths supply chain, particularly refining and processing. The U.S. is dependent on Beijing for rare earths imports. Australia, a close U.S. ally, is one of the few countries in the world other than China that processes rare earths.

Albanese said there will be three groups of joint projects between the two countries, which will include companies such as Alcoa^[3]. The U.S. will invest in rare earths processing in Australia, the prime minister said. One project is a joint venture between Australia, the U.S. and Japan, he said.

“What we’re trying to do here is to take the opportunities which are there,” Albanese told reporters.

The Pentagon will invest in building a gallium refinery in western Australia with a capacity of 100 metric tons per year, according to the White House. Alcoa announced in August that it is exploring the feasability of a gallium project^[4] with Japan at one of the company’s alumina refineries in western Australia.

“In about a year from now, we’ll have so much critical mineral and rare earths that you won’t know what to do with them,” Trump told reporters. The U.S. is also working with other nations to build a supply chain that isn’t dependent on China, the president said.

China announced strict export controls on rare earths earlier this month, pushing Beijing and Washington to the brink of a renewed trade war. Trump has threatened 100% tariffs on Chinese goods starting Nov. 1 or sooner if Beijing does not back down.

“They threatened us with rare earths, and I threatened them with tariffs, but I could also threaten them with many other things, like airplanes,” Trump said Monday.

Trump confirmed he will meet with Chinese President Xi Jinping^[5] in South Korea later this month. The U.S. president said he will visit China early next year.

“We had presidents that allowed China and other countries get away with murder,” Trump said. “We’re not going to allow that, but we’re going to have a fair deal. I want to be good to China. I love my relationship with President Xi. We have a great relationship.”