Signing the new Australia–US critical minerals agreement on 20 October was the easy part. The real test will be its implementation. The challenge, and opportunity, is to turn diplomatic intent into industrial capability and national advantage.
For Australia, success will depend on leveraging this partnership not just to extract and export but to capture value, build sovereign capability and deliver measurable returns in economic growth and resilience. That requires precision: identifying which minerals matter most, where the highest-value opportunities lie and how to convert those into durable industries on Australian soil.
The US objective is straightforward: to de-risk the defence-industrial base and rebuild secure access to strategic materials. The US will focus on minerals tied directly to defence. Rare earth elements such as neodymium, praseodymium, dysprosium and terbium are indispensable for guidance systems, electric motors and hypersonic technologies.
Australia’s interests are broader. Our critical minerals list extends to more than 50 elements—far more than are on the US list—reflecting our geological diversity and ambition to serve multiple markets. Australia must also consider where national value creation, job growth and regional development intersect with allied resilience. Cooperation must therefore enhance, not erode, our sovereignty.
The next phase of the newly minted agreement must focus on specificity and sequencing. Phase one should concentrate on rare earths, particularly neodymium and praseodymium, used in permanent magnets, and dysprosium and terbium used in high-temperature alloys. Global demand for these magnets is projected to double to nearly US$12 billion by 2030. Building an end-to-end value chain—encompassing mining, separation, refining and magnet production—would give Australia both strategic leverage and long-term export competitiveness. Once established, the partnership can broaden to include lithium, nickel, cobalt, graphite and vanadium. These commodities underpin the global shift to electric vehicles and energy storage, and Australian projects already account for more than 25 percent of global supply growth pipelines.
But the true measure of success will be whether Australia moves from extraction to transformation. Exporting unprocessed ore generates limited returns and no resilience. Domestic refining and manufacturing, by contrast, anchor capability, create high-skilled jobs and expand the national income base. To achieve this, Australia must integrate industrial policy across infrastructure, energy, digital networks and workforce planning, building regional clusters capable of competing with established producers in Asia.
Governments already have the policy levers. Production mandates, advance-purchase agreements and guaranteed offtake can create demand certainty for investors. These tools, proven in US defence procurement and pandemic-era manufacturing, can be applied to critical minerals without breaching trade rules. A 10-year advanced-purchase program for refined oxides and magnet components would attract private capital to processing and manufacturing, converting Australia’s resource advantage into industrial capability.
This new partnership will also test political resilience. US President Donald Trump’s mercurial approach to trade and security policy will challenge the steadiness of this framework, but Australians also shouldn’t assume smoother sailing under future administrations. Economic nationalism and industrial policy are now bipartisan features of US politics. Regardless of who holds office, Washington will remain focused on securing its own defence-industrial supply chains. Australia must be clear-eyed: alliances are built on shared interests, not identical ones. The test will be to ensure that our economic and strategic priorities remain central as this cooperation evolves.
That clarity must extend to ownership and control. US investment and technology should be welcomed but structured so that intellectual property, skills and downstream value remain embedded in Australia. Joint ventures should deliver genuine capability transfer; research partnerships should strengthen Australian institutions; and financing mechanisms must support domestic processing rather than exporting raw material or expertise. Resilience demands domestic depth, not external dependence.
The agreement provides a strong framework, but outcomes will depend on specificity, execution and discipline. The US will measure success by how quickly it secures key inputs for defence and manufacturing, and Australia must measure success by how much new industrial capacity, employment and export revenue it generates.
If Canberra can stay focused on building complete value chains, starting with rare earths and expanding to the broader suite of critical minerals, it can turn this alliance into a generational opportunity. The strategic objective is clear: to make Australia indispensable not merely as a supplier but as a producer—an ally whose industrial strength reinforces the security of the partnership because it has first secured its own security.
