Shares of Australian rare earth companies jump following $8.5 billion US critical minerals deal

Shares of some of Australia’s biggest critical metals and rare earths companies jumped on Tuesday after news of a massive minerals deal between Washington and Canberra worth up to $8.5 billion.

The deal – signed on Monday by US President Donald Trump and Australian Prime Minister Anthony Albanese – includes funding for several projects aimed at increasing the supply of key materials used in defense manufacturing and energy security.

Lynas Rare EarthsAustralia’s largest producer of rare earths by market capitalization, jumped about 4.7% in early Asian trading. Mineral sand miner Iluka Resources grew by more than 9% while the lithium producer Pilbara Minerals added about 5%.

Other small rare earth miners also made gains, with VHM up around 30%, while Northern Minerals exceeded 16%. Meanwhile, Latrobe Magnesium, Australia’s leading producer of the critical metal magnesium, rose almost 47 per cent.

Listed on the NYSE Alcoawhich is developing a project in Western Australia to recover and refine the critical metal gallium, has been identified as one of two priority projects under the new minerals deal. Washington will invest in shares in this initiative.

Alcoa shares, also traded on the Australian Securities Exchange through depository receipts, rose almost 10%.

Rare earths and critical metals are essential for high-tech products such as electric vehicles, semiconductors and defense equipment.

China, a world leader in the production of rare earths and many other essential minerals, has tightened export controls on these materials amid a trade war with the United States, accelerating international efforts to diversify global supply chains.

Albanese said the two countries would each contribute $1 billion over the next six months for “immediately available” projects.

However, a White House fact sheet later said Washington and Canberra would invest more than $3 billion in critical mining projects over the same period, calling the deal a “framework.”

The White House also said the U.S. Export-Import Bank would issue seven letters of interest for more than $2.2 billion in financing, potentially unlocking up to $5 billion in total investment.