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U.S.-Australia Minerals Cooperation: a CSIS Fireside Chat

On August 20, the Civitas One Team attended a CSIS fireside chat: The Future of U.S.-Australia Critical Minerals Cooperations. The event was hosted by Gracelin Baskaran, Director of The Critical Minerals Security Program. Baskaran was joined by Dr. Kevin Rudd, former Prime Minister of Australia and current Australian Ambassador to the U.S. 


The Stakes of Critical Minerals 


Dr. Rudd emphasized the importance of critical minerals and rare earths. Dr. Rudd argues critical minerals are foundational to modern defense systems, making it an urgent security concern for both the U.S. and Australia. As an example, Dr. Rudd explains the development of a single Virginia-class submarine requires around 4.5 tons of critical, highly processed rare earths. Additionally, F-35 fighter jets utilize these minerals for structures and systems. Military capabilities depend on the availability and processing of critical minerals and rare earths. 


In recent years, critical minerals have become tools of economic coercion. This is evident when looking at China’s rare earth export bans to Japan. Such actions have evoked a sense of urgency for policymakers to diversify and expand supply chains. Both Rudd and Baskaran agreed: critical minerals should be treated like defense goods and dealt with strategically. 


Critical minerals serve as a massive contributor to the high technology industry. Without it, Dr. Rudd points out, the ability to produce chips, data centers, and advancements in the AI race are not possible. Rudd refers to “The Magnificent Seven”, America’s largest tech firms, are strategically channeling investments in Australia’s critical minerals reserve, underscoring its global importance. 


Australia’s Strategic Reserve Initiative 


Australia has a unique mineral reserve, giving it the title of largest mining industry in the world. In April Australia pledged approximately AUD $1.2billion to establish a critical mineral reserve in efforts to create a separate supply chain, counteracting Chinese initiatives. In efforts to promote mining, processing, and soon pricing with the help of global partners, the reserve is forecasted to enable Australia to secure the dominating spot in mineral domination. 


The U.S.-Australia Partnership 


Dr. Rudd noted Australia is now officially recognized as a “domestic supplier” under U.S. defense laws. Both governments have established formal offtake agreements, a long-term legal contract between buyer and producer. This guarantees a portion of Australia’s critical minerals and rare earths are reserved exclusively for U.S. uses. Despite unforeseen market disputes or external factors, such agreement ensures uninterrupted access. 


Dr. Kevin Rudd. Via Bloomberg
Dr. Kevin Rudd. Via Bloomberg

The Quad and AUKUS


The Quad (U.S., Australia, Japan, and India) and AUKUS (Australia, UK, U.S.) are multilateral structures that contribute to the mineral supply chain strategies. 


Under AUKUS, the U.S. can share practices on advanced processing and supply chain mapping, while Australia provides direct material support. Additionally, the Quad launched their Critical Minerals Initiative in efforts to secure and diversify critical minerals supply chains. Dr. Rudd and Baskaran agreed that participation in such frameworks gives Australia and the U.S. a clear advantage over China, shaping global standards, while promoting democratic values and transparency in the process. 


Countering China


Baskaran poses the question of if we can counter China or even catch up. Dr. Rudd responds he feels it is possible to minimally catch up to China with collaborative efforts. Through the Prime Minister’s Critical Minerals Task Force, large mining companies, deep capital markets, and public investment, Dr. Rudd believes there is clear potential for advancements. 


A New-Era of Resource Diplomacy 


The U.S.-Australia critical minerals partnership serves as an example of a bilateral arrangement for how democracies can respond to supply chain control risk. Looking at an issue that has bipartisan support, critical minerals and rare earths protections and progress will benefit all parties involved and provide long-term, tangible results. 


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