Australia and Canada agree to stop competing and collaborate on critical minerals to bypass China

Australia and Canada will jointly invest in critical minerals, including processing each other’s resources, in a landmark collaboration designed to wean themselves off China.

Resources Minister Madeleine King said global efforts to diversify supply chains for the vital minerals had concentrated in response to China’s recent restrictions on exports.

Even though China President Xi Jinping put a year-long pause on these restrictions after meeting Donald Trump this week, the volatility had made other countries conscious of their vulnerabilities.

“The arbitrary nature of that export restriction and the equally arbitrary nature of it being taken off – with little detail around the nature of that lift of those restrictions – just shows why it’s important to have an alternative, trusted supply chain,” Ms King, pictured below, told The West from Canada, where she has joined G7 energy ministers shaping the critical minerals action plan leaders agreed to in June.

That plan is about creating an alternative market for critical minerals and rare earths that reflects the price of production in “open-market countries” with high ESG standards, such as Australia and Canada.

“Because we’ve got an excellent reputation as Australia’s resources sector and the country as a whole in providing energy resources already, we stand in a really good place to be able to talk to the G7 about being that supplier, as does Canada.

“We’ve got an opportunity for Canada and Australia also to work together, compete where we need to, but we also can work together on sharing our experiences as resources countries.”

That opportunity to collaborate was formalised through a declaration of intent that Ms King signed with Canadian Minister for Natural Resources Tim Hodgson overnight.

They also witnessed a heads of agreement between Hastings, Wyloo and Canadian company Ucore for negotiate a long-term offtake agreement to supply rare earth concentrate from the Yangibana joint venture.

“Canada and Australia are two large-scale like-minded producer nations holding some of the world’s most significant critical minerals reserves,” their agreement says.

“As representatives of producer nations, we concur on the need for our two nations to deepen our bilateral alliance and move from competition to collaboration to address the growing need for secure, diversified, and resilient critical minerals supply chains that reduce reliance on any single source.

The deal envisages the two countries co-investing in commercially viable projects and making offtake agreements so that resources mined in Australia will be processed in Canada and vice versa.

Governments will also foster the resource sectors to share best practice in approvals processes, ESG and tools to tackle supply chain disruptions, along with joint research and demonstration projects in areas such as low-carbon processing, refining and recycling technologies.

The Canadian agreement follows Mr Trump and Anthony Albanese striking a deal for Australia and the US to jointly invest in a $13 billion pipeline of critical minerals and rare earths projects.

Since then, the US President has also struck similar deals with Japan, Malaysia and Thailand.

Ms King said the Australia-US deal had clearly been the model, offering “a format, if you like, for the US to have a consistent approach to other countries.”

She welcomed the consistency of language on the new American deals, saying it should enable more multilateral engagement down the track.