FILE PHOTO: Workers transporting soil containing rare earth elements for export at a port in Lianyungang, Jiangsu province, China, October 31, 2010.
Stringer | Reuters
China responded on Tuesday to the US-Australia deal on critical minerals by saying countries rich in rare earth resources should take “a proactive role” in stabilizing their critical mineral supply chains.
A spokesperson for China’s Foreign Ministry was asked about the critical minerals deal between the United States and Australia, which has been framed as an effort to counter Beijing’s dominance.
“The formation of global production and supply chains is the result of corporate and market choices,” Guo Jiakun said, according to NBC.
“Nations rich in critical mineral resources must play a proactive role in safeguarding the security and stability of industrial and supply chains, and ensuring normal economic and trade cooperation,” he added.
Rare earths are a category of minerals critical to a range of products, from cars to semiconductors.
US President Donald Trump and Australian Prime Minister Anthony Albanese signed an agreement at the White House on Monday aimed at increasing the supply of rare earths and other critical minerals.
The framework agreement, which was described as an $8.5 billion deal between the allies, comes shortly after China imposed stricter export controls on rare earths.
China’s Ministry of Commerce announced earlier this month expanded restrictions on the export of rare earths and related technologies, seeking to prevent the “misuse” of minerals in the military and other sensitive sectors.
Western auto industry groups have been among those raising the alarm about the new export controls, saying the measures could pave the way for a period of supply chain chaos.
Australian Prime Minister Anthony Albanese (L) and US President Donald Trump shake hands after signing an $8.5 billion rare earth minerals deal during a bilateral meeting in the Cabinet Room of the White House on October 20, 2025 in Washington, DC.
Anna makes money | fake images
Demand for rare earths and critical minerals is expected to grow exponentially in the coming years as the transition to clean energy accelerates.
China is the undisputed leader in the critical minerals supply chain, accounting for approximately 60% of global production of rare earth minerals and materials. US officials have previously warned that this poses a strategic challenge amid the shift toward more sustainable energy sources.
Rare Earth Stocks
George Cheveley, natural resources portfolio manager at investment firm Ninety One, described the US-Australia deal as a long time coming but “a good deal” designed to boost supplies of critical minerals out of China.
“From an investment point of view, it’s not that obvious. This is a very small sector,” Cheveley told CNBC’s “Squawk Box Europe” on Tuesday.
“And clearly, when you’re dealing with a sector that’s so politicized and where government money is essentially going as a subsidy, that tells us that it’s difficult to make it work economically,” he added.
Shares in some of Australia’s largest critical metals and rare earths companies rose on Tuesday, while others lost ground after an initial rally.
Lynas rare earthsAustralia’s largest rare earths producer by market capitalization, fell 7.6% after posting gains earlier in the session. mineral sand miner Iluka Resources fell 0.1%, while lithium producer Pilbara Minerals added about 2.6%.
Latrobe Magnesium, Australia’s leading producer of the critical metal magnesium, posted gains of more than 15%.
In the United States, rare earth stocks were last seen slightly lower in pre-market trading. Critical Metals fell 3.8%, USA Rare Earth fell 5% and MP Materials lost 1.9%.
— CNBC’s Evelyn Cheng and Dylan Butts contributed to this report.
