US Pushes Equity Stakes In Australia's Critical Minerals Sector

The United States has offered to invest in Australian critical minerals companies as part of a broader effort to secure alternative supply chains and reduce its reliance on China. With this effort, Washington is taking a next step in its urgency to expand access to lithium, cobalt, rare earths, and other resources vital for clean energy, semiconductors, and defense.

"U.S. government officials were saying to companies, you come to us with a proposal and we'll assess it and try and make it work through those various funding channels and programs that we have available to us," Andrew Worland, CEO of International Graphite, told Reuters.

Worland was part of a delegation of 15 Australian critical minerals firms that met with senior U.S. administration officials last month, including David Copley, a former mining executive from the National Security Council, and Joshua Kroon of the International Trade Administration.

The talks centered on financing tools ranging from traditional debt and equity to the potential offtake prepayments that could directly add to America's defense stockpiles. The timing is crucial as U.S. officials aim to have viable projects in production by 2027.

Critical minerals are likely to be one of the top bargaining chips at the White House meeting between Australia's Prime Minister Anthony Albanese and President Donald Trump, scheduled for October 20.

Beyond the AUKUS defense pact and nuclear submarine program, Australia's offer to sell shares in its newly announced 1.2 billion Australian dollars ($793 million) Critical Minerals Strategic Reserve will allow allies to co-invest in stockpiles of rare earths and other materials in exchange for guaranteed access.

Still, these deals must pass through Australia's foreign investment framework. Under current guidance, foreign persons generally require government approval before acquiring interests in mining or production tenements, regardless of value.

For foreign government investors, the threshold is zero, meaning even small stakes trigger mandatory review. When the investment touches on "national security land," the approval requirement is automatic. Critical minerals are subject to additional scrutiny, and officials encourage voluntary notification even when thresholds are not met, to pre-empt potential call-ins under the national security test.

Financing has long been a hurdle for critical minerals projects. Markets for these metals are relatively small, and prices are volatile, making valuations difficult. As a result, commercial lenders have often been reluctant to commit capital. Government backing, particularly in the form of U.S. equity or guaranteed offtakes, could derisk projects and unlock private investment. That is why Australian miners, such as Cobalt Blue (OTCPK: CBBHF), which is also part of the Washington delegation, have framed U.S. involvement as essential to their growth plans.

China's willingness to weaponize its 85% control of global rare earth processing capacity has urged both Washington and Canberra to build secure supply chains.

The U.S. is not limiting its search to Australia. Capital has been moving into other allied markets, as evidenced by the announcement on Monday by USA Rare Earth (NASDAQ:USAR) of its $100 million acquisition of UK-based Less Common Metals, one of the most established private producers of rare earth metals and alloys outside of China. The deal gives Washington a direct foothold in midstream processing, underscoring how rapidly the U.S. is accelerating its "mine-to-magnet" strategy.

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