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US, Australia to invest $2 billion in critical minerals, advance Alcoa gallium project

ReutersOct 21, 2025 1:01 AM

- The United States and Australia extended financial support to several Australian companies as part of a wide-ranging critical minerals agreement aimed at countering China's hold over the industry, sending the firms' shares sharply higher on Tuesday.

Under the deal signed by U.S. President Donald Trump and Australian Prime Minister Anthony Albanese, the countries pledged to invest at least $1 billion each over the next six months in mining and processing projects and to set a price floor for critical minerals, a step long sought by Western miners.

The U.S. Export-Import Bank (EXIM) said it sent seven Letters of Interest (LOIs) totalling more than $2.2 billion to advance U.S.-aligned critical minerals projects in Australia.

The LOIs went to Arafura Rare Earths ARU.AX, Northern Minerals NTU.AX, Graphinex, Latrobe Magnesium LMG.AX, VHM VHM.AX, RZ Resources and Sunrise Energy Metals SRL.AX. They represent the next phase in securing the minerals that power American manufacturing, national security, and other strategic industries, EXIM said in a statement.

Shares of Arafura were up 8% in morning trading, while shares of Northern Minerals, Latrobe Magnesium, and VHM jumped 11%, 15% and 20% respectively, although Sunrise was trading lower. That compared with a broader market .AXJO gain of 0.7%.

The governments said they would also help advance a plan by U.S. aluminium producer Alcoa AA.N to build a gallium plant alongside its alumina refinery in Western Australia that could provide up to 10% of global gallium supply.

That announcement pushed Alcoa's Australian-listed shares 8% higher.

Gallium, a raw material used in the production of alumina, is a critical mineral essential to technology, especially the semiconductor industry and defence sectors.

Australia said in a statement that it would provide up to $200 million in concessional equity financing for the project, which includes offtake rights for the Australian government, while the U.S. would also make an equity investment with offtake rights.

Alcoa in August signed a joint development agreement with Japan Australia Gallium Associates (JAGA), a venture between the Japanese government and Sojitz Corp 2768.T, for the project.

The company said that once it finishes feasibility work, a special purpose vehicle owned by the U.S. and Australian governments and Alcoa is expected to enter a joint venture with JAGA to construct the plant, which Alcoa would operate.

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