Antinuclear

Why Australia’s Rare Earth Deal Serves U.S. Interests

24 October 2025 AIMN Editorial , By Denis Hay  

Australia’s rare earth deal with the US fuels its military industry, not our sovereignty. Here’s why that matters.

Introduction: Australia’s Strategic Crossroads

In October 2025, Prime Minister Anthony Albanese signed an $8.5 billion rare earth deal with the United States, promising closer economic and security ties. The agreement appears to be an opportunity to boost Australia’s resource sector. Yet beneath the surface, it reveals a deepening alignment with the US military-industrial complex through the AUKUS alliance.

As China restricts exports of key rare earth metals used in advanced weaponry, the US is turning to Australia for supply. The question is simple but profound: is the rare earth deal Australia signed a path to sovereignty, or servitude?

The Problem: How the Deal Strengthens Dependence

1. The Geopolitical Trigger – China’s Ban and US Pressure

China’s export controls on critical minerals such as gallium and germanium were a strategic response to the US using them for missile guidance systems, fighter jets, and submarines. Washington needed a reliable alternative, and Canberra complied.

Through the AUKUS alliance, Australia is being drawn into the US defence supply chain, undermining our ability to chart an independent foreign policy. Rather than investing in peaceful manufacturing and clean-energy industries, our resources are now fuelling a global arms race. (ABC News)

2. Resource Exploitation Without Return

Australia holds about 20% of the world’s rare earth reserves, yet most of our minerals are exported raw and processed overseas. This deal continues that pattern, foreign corporations’ profit while Australians bear the environmental costs. Public money is used to subsidise foreign ventures instead of funding domestic processing plants that create local jobs. (AP News)

The Impact: What Australians Are Experiencing

3. From Mining Boom to Dependency Economy

Despite decades of booms, Australia is still a “dig-and-ship” nation. The rare earth deal Australia signed solidifies our position as a key supplier of raw materials to the US military supply chain. Communities see little benefit while regional inequality and labour insecurity grow.

4. Who Really Benefits

The true winners are US defence contractors like Raytheon and Lockheed Martin, who depend on steady rare earth supplies for weapons production. Under AUKUS, Australia is obliged to supply these resources for military use while receiving limited technology transfer. Once again, public money serves private foreign interests. (Politico)

Who Owns the Processors: and Who Gets the Profits

The Albanese government’s rare earth deal, which Australia signed with the United States, has been presented as a boost to local industry. Yet a closer look at who owns the companies processing these critical minerals shows the profits often flow overseas or to private shareholders, not the Australian public.

1. Iluka Resources – Eneabba, Western Australia

Iluka runs Australia’s first integrated rare-earth refinery, funded by a $1.65 billion public loan from the federal government’s Critical Minerals Facility. The project includes a “no-China” clause to satisfy US and UK defence interests. Although Iluka is ASX-listed, profits go to private and institutional investors, not the public, while its supply contracts serve foreign markets.

2. Lynas Rare Earths – Kalgoorlie and Malaysia

Lynas, another ASX-listed firm, runs processing plants in Kalgoorlie and Malaysia. It received early investment from Japan’s Sojitz and JOGMEC, who keep offtake rights. A substantial part of Lynas’s refined output is exported to Japan and US defence manufacturers, making Australia a supplier in the AUKUS alliance rather than an independent producer.

3. Arafura Rare Earths – Nolans Project, Northern Territory

Arafura promotes itself as an Australian company, but binding offtake agreements with Hyundai, Kia, Siemens Gamesa, and Traxys cover most of its planned production. This means much of its revenue will come from foreign contracts, while Australian taxpayers help fund infrastructure and environmental oversight.

4. Alpha HPA – Gladstone, Queensland

Alpha HPA’s high-purity alumina project has been hailed as a clean-tech success, supported by hundreds of millions in government loans. However, its customers are primarily offshore electronics and battery manufacturers, meaning the profits leave Australia even though public funds help build the facilities.

5. Australian Strategic Materials (ASM) – Dubbo, New South Wales

ASM’s Dubbo project has strong ties with a South Korean consortium, with potential equity and offtake arrangements already in place. While the plant is in Australia, most of the downstream manufacturing and profit realisation will occur in Asia.

The Sovereignty Gap

While several companies are headquartered in Australia and listed on the ASX, the real issue is who controls the value chain. With foreign investors and defence-aligned buyers dominating the market, Australia captures little of the long-term benefit.

Despite processing more at home, the profits and strategic control remain offshore, perpetuating the dependency model that the AUKUS alliance reinforces…………………………………………………………………………………………………………………………………. https://theaimn.net/why-australias-rare-earth-deal-serves-u-s-interests/#comment-14832

October 25, 2025 - Posted by Christina Macpherson | rare earths