Australia is closing in on a carve-out from Donald Trump’s October tariff attack on critical minerals
Several members of an Australian critical minerals contingent led by Kevin Rudd that met Trump administration officials told The Australian they expected a flurry of deals with the US.
Australia could gain some exemption from Donald Trump’s proposed tariffs on critical minerals which the White House is set to announce later this month around the time Anthony Albanese and the US President meet, according to people familiar with recent developments.
Several members of an Australian critical minerals contingent led by ambassador Kevin Rudd that met Trump administration officials and US departments told The Australian they were expecting a flurry of deals with the US.
They said the White House under the Republican billionaire had become more “businesslike” than the former Biden administration, and was acutely aware of China’s threat to critical minerals supply used in defence equipment.
Mr Trump signed an executive order in April this year directing the US Department of Commerce to investigate potential national security risks from imports of processed critical minerals allowing for “the imposition of tariffs and other trade restrictions”.
The US President is expected to apply tariffs.
While one senior Australian government official said “there was still a long way to go,” there is optimism that Australia would be exempt from critical minerals tariffs that exceeded the current 10 per cent baseline tariff, in a similar way that Britain was this week exempted from higher tariffs on lumber exports.
Chief executive of Australia’s listed Cobalt Blue Holdings Andrew Tong said the meetings signalled that there were likely to be significant agreements between the two governments.
“The Australian government has assured Australian critical minerals companies that they are working hard to secure the best possible deal for Australian industry. I’m optimistic that both Australia and the US see the enormous commercial and national interest benefits of enhanced co-operation and that this will be reflected in any new agreement,” Mr Tong said.
Mr Tong said that during the meetings he noticed “very obvious” changes in attitudes in the US.
“The US is open for business. The administration in charge of all this are commercially savvy business people instead of the usual government bureaucrats.”
“It’s like we’re dealing with US Inc instead of government departments on their own,” Mr Tong said.
“The assessments made to be part of their investments and their programs don’t need the usual delays of appeasing constituents.
“Rather, they’re looking for commercial deals that can be executed right now and that puts Australia in the sweet spot.”
The chairman of ASX-listed Australian Rare Earths, Angus Barker, who was also in the Washington meetings said he was also hopeful of deals and favourable terms with the Americans.
“Australian Rare Earths’ participation in the Critical Minerals delegation to Washington DC highlighted growing momentum behind U.S. efforts to diversify critical mineral and rare earth supply chains. Financing support, trade policy measures, and co-ordinated policy actions were discussed as tools to accelerate the scale-up of non-China supply,” Mr Barker said.
“Kudos to ambassador Rudd and the Austrade team – for curating an extraordinary set of meetings with the key stakeholders across US Government and industry. They put the key Australian critical minerals projects in the right place, at the right time.”
“For investors, this signals increasing government backing and alignment around long-term demand security – the key to unlocking investment in new, diversified Rare Earths supplies. If the policy and pricing signals are aligned, our Koppamurra ionic clay hosted Rare Earths project, can deliver a feedstock rich in the key magnet light and heavy Rare Earths needed as the US builds out its downstream magnet making capacity, and be in the vanguard of new, diversified supply.”
Arafura Rare Earths chief executive Darryl Cuzzubbo, who was also in the meetings, said he was optimistic that a formal structure between Australia and the US for investment would be created.
“It’s pretty clear that the US want multiple sources of rare earths and they want them now. We’ve seen [South] Korea moving faster because they see the US moving quickly and they don’t want to be dependent on China,” Mr Cuzzubbo said.
“Australia is already doing what the US could soon do which is taking a position through the strategic reserve with offtake and taking equity stakes through the national reconstruction fund. What we think needs to happen now is a formal structure around how the US would invest and take offtake with our projects.”
“I don’t want to comment on what we think will happen on October 20 [when Albanese and Trump meet], but there clearly could be some broader deal struck.”
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