Kevin Rudd promises Americans they can count on Australia after China minerals ban

Ambassador Kevin Rudd assured the Trump Administration it can rely on supplies of refined rare earths from Australia after the world’s dominant supplier, China, placed severe restrictions on exports of the minerals that have become essential for modern life, from the manufacture of iPhones to F-35 fighters.

“Through strategic investments by the Australian government we are rapidly developing refining capabilities which will open soon for heavy and light rare earths in Australia, which together with other resources in Australia and elsewhere will enable to the US to proceed with high levels of confidence into the future,” Mr Rudd said in Washington.

Experts said China’s decision, announced Thursday, is an attempt by Beijing to gain control over the global supply chain for modern electronics and artificial intelligence chips.

The Chinese government banned the sale of rare earths for military purposes and the export of any equipment or information that other countries could use to refine rare earths or build rare earth magnets, which are essential for electric car engines.

The Trump Administration will see Australia’s critical minerals as a solution to China’s move, according to Marina Zhang, a technology and international relations expert at the University of Technology, Sydney, and will push the Albanese government to speed up its plans.

Trade Minister Don Farrell said Friday afternoon Australia was a reliable supplier and “hopefully we can reach some form of agreement with the US on this important issue” and “provide alternatives to the rest of the world”.

‘Massive’ cost

Despite the government’s assurances, Dr Zhang said building processing and refining plants capable of challenging China’s dominance, including over 85 per cent of rare earth processing, would take a highly skilled workforce five to 10 years and would require “massive” capital investment.

Even contracts with the US military will not be “enough on its own to commercially justify the multi-billion-dollar investment needed for world-scale processing facilities,” she told The Nightly. “These plants need the scale of the global market, including EVs and clean energy — a market where Chinese manufacturers remain the biggest customers.”

The prime minister has not confirmed whether he expects to discuss the critical minerals with Donald Trump at a meeting they have scheduled in the US next week.

As the Australian government works on a plans to create a critical minerals stockpile by the end of next year, Mr Albanese could offer Mr Trump priority access to the reserves, The West Australian reported October 2.

“There is enormous interest in (the stockpile)” the Assistant Minister for Resources, Anthony Chisholm, told a Senate committee Friday. “If we can get this right it will make a substantial impact for the industry and communities and economies around the country in terms of economic development.”

Mr Albanese has expressed his preference for refining minerals in Australia. “One of the things that we want to do is to make sure that we don’t just dig things up, our resources, export them, watch someone else value add and then import them back at greater prices,” he said last month.

Shares surge

Demand for exotic minerals has driven shares in Perth-based Lynas Rare Earths, the world’s largest supplier of rare earths outside China, threefold this year.

The ASX-listed company is now worth around $20 billion and added 5.3 per cent on Thursday to a 14-year high of $20.59, after it announced a deal with US manufacturer Noveon Magnetics to supply rare earth magnets for the US Defence Department and commercial customers. Lynas shares fell 3.5 per cent to $19.87 on Friday.

On Wall Street overnight, other rare earth explorers and miners surged on news of China’s restrictions on rare earths minerals and technology.

New York Stock Exchange-listed MP Materials, the only operating rare earths miner in the US, rose 2.4 per cent on the news. In July 2025 the US Defence Department took a $US400 million equity stake in MP Materials. Australia’s richest person, Gina Rinehart, is also a shareholder.

Ms Rinehart’s investment group Hancock Prospecting bought 8.8 million shares in MP Materials, or about 5.3 per cent, in April, 2024, and has watched the value of its stake more than quadruple since.

Lynas and MP Materials considered a merger in 2024 before abandoning the idea, with deep-pocketed Ms Rinehart still considered a key matchmaker in any future merger and acquisition activity globally across the red hot sector.

Hancock also holds around 10 per cent of ASX-listed rare earths explorer Arafura near Alice Springs in the Northern Territory, and nearly 6 per cent of rare Brazilian Rare Earths in Brazil.