Fund managers are increasingly optimistic about rare earth stocks, anticipating continued growth following a significant agreement between the United States and Australia. The two nations have committed to invest $US3 billion ($4.6 billion) in critical minerals projects, a move expected to bolster the sector significantly. Further support for rare earth companies is also anticipated in the near future.
Prime Minister Anthony Albanese and US President Donald Trump formalised a framework on Monday (Tuesday AEDT) designed to secure critical mineral supply chains. The agreement includes provisions for a price floor for new producers and restrictions on asset sales based on security concerns. These measures aim to encourage investment and protect strategic resources within both countries.
Over the next six months, Australia and the US will each allocate $US1 billion to key projects. This includes a $US100 million stake in Arafura Resources’ Nolans rare earths mine, an ASX-listed company focused on rare earth oxide production. Additionally, a $US200 million equity investment will be directed towards a West Australian gallium plant owned by Alcoa, further diversifying the critical minerals landscape.
These strategic investments and policy frameworks signal a strong commitment to developing secure and reliable supply chains for rare earth minerals. The initiatives are designed to foster growth and innovation within the sector, benefiting both Australian and US companies involved in critical mineral extraction and processing.
