Farrell Gregory
Of all the national security threats before the second Trump administration, the critical mineral crisis is particularly acute. In short, US supply chains for the materials that constitute essential technologies and advanced weaponry are overstretched. While the Biden administration ordered a review of critical mineral supply chains and advanced cooperation with allies, America remains highly vulnerable to strategic input disruption. The increasing reliance on unreliable mineral sources abroad represents a national security threat—one America is presently unequipped to deal with alone. However, by working with resource-rich partners such as Australia, the U.S. can leverage its alliances to secure a wider range of critical minerals.
Having taken office in January, President Trump has the opportunity to continue the progress he made on critical minerals during his first term. In December 2017, he issued Executive Order 13817, which outlined a broad strategy to reduce America’s critical mineral vulnerabilities and directed executive agencies to take more specific actions. In September 2020, he turned that strategy into action with Executive Order 13953, declaring the critical mineral crisis a national emergency and reorienting the executive branch towards a more proactive mineral security policy. A second Trump administration will likely support a revitalization of domestic mining and utilization of mineral reserves. His executive orders, so far, required relevant agencies to eliminate overburdensome regulations and assess strategic input vulnerability.
But the solution to the critical mineral crisis won’t be found in the US’ domestic supplies alone: the National Defense Stockpile, which was established to furnish critical material requirements in the event of war, can only meet 6 per cent of needs in a crisis scenario. Nor will this issue be solved solely by turning to domestic producers—many critical materials are only found in sufficient quantities abroad. Rather, the US will rely on its allies to establish a more secure and resilient supply chain network. Executive Order 13953 recognized that fact; section 2(e) directed the Secretary of State and other administration officials to plan coordination with our allies to reshore critical mineral supply chains.
One of the most consequential partners of the Trump administration’s mineral reshoring strategy could be Australia. Australia's Identified Mineral Resources, a complete account of domestic mineral reserves, showed that it was a key producer of many critical minerals in 2022. It was the world’s top lithium supplier at 52% of the global market; similarly, it produced 27% of the world’s rutile, 25% of zircon, 3% of cobalt, and 10% of manganese. Each of these minerals has essential military applications.In May, the US Department of Defense awarded $20 million to utilize domestic manganese supply, which is a vital component of batteries used by the military. But America cannot solve its mineral shortcomings by domestic reinvigoration alone. Only by working with partners like Australia can it create a resilient critical mineral supply chain that reduces national security vulnerabilities.
There are plenty of examples of cooperation between Australia and the US in this area in recent years, but it’s worth asking how effectively they can meet our security needs. The US Mineral Security Partnership (of which Australia is a part) is a collaboration between 14 countries and the EU to establish more sustainable critical mineral supply chains. Although the group has seen some successes, including financing the Lobito corridor railway, its efficacy is constrained by the need to balance the divergent interests of its many member countries. The United States may find bilateral exchanges more fruitful.
In the global critical mineral market, Australia is a supplier, not a buyer. That makes it a unique beneficiary of outside investment, both from the US and China. There are countless examples of foreign investment in the Australian mining industry, with some investors using proxies to evade government-mandated investment caps. Earlier this year, the Australian government blocked a Chinese national from doubling his investment to 20 per cent in Northern Miners, a supplier of critical minerals such as dysprosium and terbium. The case highlighted the sensitivity of the Australian government to China’s role in its supply chain as an investor.
But Australia is also uniquely reliant on China as a destination for raw materials. In the first half of 2023, 97% of Australian lithium was exported to China. Overall mineral exports to China that year totalled nearly $100 billion. For context, the Sino-Australian mineral trade alone accounted for about 10 per cent of the global mineral market in 2023. These numbers make clear how important China is as a refiner and producer in global mineral supply chains—Australia simply can’t stop selling to Chinese refineries without a credible alternative.
This is an opportunity for the Trump administration to strengthen its critical mineral strategy. The security risk still exists if minerals from a US-financed mine rely on Chinese refineries in order to become usable inputs in the manufacturing process. It is capital intensive, but a more holistic investment strategy would seek to bring additional steps in the refinery process to the US and Australia. This is the form that a critical mineral partnership with Australia should take: coordinated investment that aims to bring value-added steps in the critical mineral supply chain into both countries.
Other international actors have already recognized Australia’s potential role as part of a more resilient critical mineral supply chain. In May 2024, representatives from the EU and Australia signed a Memorandum of Understanding that recognized the two sides’ shared interest in diversifying supply chains and increasing Australia’s domestic mining and refining capabilities. Similarly, the Japan Organisation for Metals and Energy Security and the Northern Territory government in Australia signed two Memorandums of Understanding that established a framework and commitment to collaborate in the critical mineral sphere.
Going beyond statements and press releases, the Trump administration could seek to catalyze more substantive commitments for investment as part of a larger critical mineral strategy. In October 2022, US officials announced a $1 billion fund to invest in critical mineral projects in QUAD countries (Australia, India, and Japan). But $1 billion isn’t enough to fix America’s mineral security gap. The Trump administration could designate Australia as a ‘domestic source’ of material through the Defense Production Act in order to open up the $369 billion in Inflation Reduction Act spending to investment in our Australian partners. Similarly, the US International Development Finance Corporation—which was established in Trump’s first term—should help overcome capital barriers by increasing investments in Australia. Amid executive overseas spending reforms, DFC’s strategic investment mission could become more important for the new Trump administration. Although the DFC is restricted from investing in high-income countries, the European Energy Security and Diversification Act of 2019 allowed it to help high-income European countries reduce their reliance on Russia. The new Congress should allow a similar exception to enable a critical mineral transition that utilizes our partnership with Australia.
As demonstrated by actions during his first term, President Trump recognizes the military necessity of safeguarding our critical supply chains—the minerals and rocks from the ground end up as advanced weaponry and technologies essential to the functioning of a modern military. After initiating a strategic review and taking substantive action during his first term, a second Trump administration has the opportunity to capitalize on those achievements and further strengthen our mineral supply chains by aligning with partners like Australia.
