Resources Minister Madeleine King said the policy could be backed by Export Finance Australia (EFA), the government’s export credit agency, to provide greater certainty to producers grappling with volatile prices and a market heavily influenced by Chinese supply
Australia is considering introducing a price floor for critical minerals, including rare earths, as Canberra seeks to blunt China’s dominance in the sector and attract fresh overseas capital to develop new mines and processing facilities.
Resources Minister Madeleine King said the policy could be backed by Export Finance Australia (EFA), the government’s export credit agency, to provide greater certainty to producers grappling with volatile prices and a market heavily influenced by Chinese supply.
“We will work to make sure Export Finance Australia has the right financial tools to be able to introduce price floors,” King said at a press conference in Washington DC, where officials from multiple countries gathered for a Trump administration–convened summit on critical minerals.
Strategic push amid global supply race
Rare earths and other critical minerals are key inputs for defence equipment, electric vehicles, renewable energy systems and advanced technology products. China currently holds a near-monopoly over the processing and refining of many of these materials and has previously leveraged supply during trade disputes.
Australia, which holds the world’s fourth-largest rare earth reserves at an estimated 5.7 million metric tons of rare-earth-oxide equivalents, is seeking to narrow the gap.
According to US Geological Survey data (January 2025 estimates), China leads with 44 million metric tons, followed by Brazil at 21 million metric tons and India at 6.9 million metric tons.
King acknowledged that while Australia is resource-rich, it lags significantly behind China in downstream processing and refining. “Australia was well behind China in processing and refining of rare earths and would need to work hard to catch up,” she said, adding that the country’s resources sector has historically depended on foreign investment.
A guaranteed minimum price could help de-risk projects, particularly in the early years when market fluctuations can deter financiers and offtake partners. The model is seen as a way to stabilise revenues and make large, capital-intensive projects bankable.
US, EU step up mineral diplomacy
Canberra’s deliberations come just a day after US President Donald Trump unveiled plans for “Project Vault” — a proposed $12 billion strategic stockpile aimed at reducing America’s dependence on Chinese rare earths and other critical minerals.
The European Union is also expected to propose a critical minerals partnership with the US, underscoring growing Western coordination to dilute China’s grip on supply chains.
Australia, for its part, is planning a smaller A$1.2 billion (around $843 million) critical minerals stockpile. The initial focus will be on rare earth elements, antimony and gallium — materials considered vital for defence and high-tech manufacturing.
The move complements a landmark 2025 agreement between Australia and the United States to boost American access to Australian rare earths and other strategic minerals.
Last year, the US offered to guarantee a price floor for one key producer, though similar support has not yet been extended more broadly.
Investment pipeline and market reaction
As part of its investor outreach, the Australian government has launched an online prospectus highlighting 49 mining projects and 29 processing facilities described as “ready for investment.” King said capital could flow in through equity, debt or long-term offtake agreements.
Markets reacted positively to the policy signals. Shares of Sydney-listed critical minerals companies rallied in morning trade on Wednesday. Lynas Rare Earths surged as much as 6.9 per cent, Iluka Resources rose 5.2 per cent, Arafura Rare Earths gained 6.3 per cent, and Sunrise Energy Metals jumped 10 per cent.
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