Australia is weighing a price floor for critical minerals including rare earths, a move that sent local producers’ shares higher, as it seeks to counter China’s dominance and lure foreign investment into new mines and processing projects.
The nation, holder of the fourth-largest rare earth reserves, is among countries weighing a minimum price for the critical minerals used in everything from defense industries to tech firms to help producers compete in a market saturated by Chinese supply.
Shares of Sydney-listed critical minerals companies rallied on Wednesday, buoyed by optimism over Australia’s price-floor proposal and growing momentum toward a US-European Union critical minerals partnership, before paring some of the gains in afternoon trade.Lynas Rare Earths Ltd.rose 5.3%,Iluka Resources Ltd.advanced 0.7%,Sunrise Energy Metals Ltd.gained 2.7% andArafura Rare Earths Ltd.held steady.
The policy would rely on support from Export Finance Australia, the government’s export credit agency, Resources MinisterMadeleine Kingsaid at a press conference in Washington DC, where representatives from multiple countries gathered for a Trump administration–convenedsummiton critical minerals.
“We will work to make sure Export Finance Australia has the right financial tools to be able to introduce price floors,” she said. Australia was well behind China in processing and refining of rare earths and would need to work hard to catch up, King said, adding that the country’s resources industry has always depended on foreign investment.
Australia Ranks Fourth in Rare Earth Reserves
Source: US Geological Survey
Note: Data are January 2025 estimates; reserves unavailable for Burma, Madagascar, Malaysia, Nigeria and other small producers; Thailand's reserves (4,500 tons) not displayed.
The move comes just a day after US PresidentDonald Trumpannouncedplans to launch the so-called Project Vault, a strategic critical-minerals stockpile with $12 billion in seed money to slash America’s reliance on Chinese rare earths and other metals. China has a near-monopoly over processed critical minerals and has previously used supply as leverage during trade disputes.
The EU willpitchthe US on a critical minerals partnership to curb China’s influence, looking to shape the Trump administration’s push to strike global agreements this week.
Like the US, Australia is planning to build its own critical minerals stockpiles, albeit smaller at A$1.2 billion ($843 million). The government will initiallyfocuson purchasing rare-earth elements, antimony and gallium. The effort sits alongside a landmark pact Australiasignedwith the US in 2025 to boost America’s access to rare earths and other minerals.
Meanwhile, as part of the sales pitch, the government has launched an online prospectus outlining 49 mines and 29 processing facilities “ready for investment,” according to King, adding that investment could take the form of offtake agreements.
The US last yearofferedto guarantee a price floor to one key producer, but that has so far has not been extended to any other companies.
from bloomberg
