In a move that is set to ripple across global supply chains, the European Union and Australia have both launched major initiatives to secure critical raw materials, aiming to reduce their heavy reliance on China. The past month has seen a flurry of announcements and diplomatic activity, as Western leaders scramble to insulate their economies from the shock of China’s recent export restrictions on rare earth elements—minerals vital to everything from electric vehicles to advanced defense systems.
On October 25, 2025, European Commission President Ursula von der Leyen addressed a Berlin conference with a stark warning: “If you consider that over 90% of our consumption of rare earth magnets come from imports from China, you see the risks here for Europe and its most strategic industrial sectors,” she said, according to reporting from Reuters. Von der Leyen’s remarks underscored just how exposed the EU is in sectors like automotive, defense, Greentech, and digital industries, all of which depend on a steady flow of these specialized minerals.
Her comments came in direct response to China’s decision earlier in October to tighten restrictions on rare earth exports. Analysts widely believe Beijing’s move was a counterpunch to trade tariffs imposed by then-U.S. President Donald Trump. Whatever the cause, the effect has been immediate and jarring for Western capitals. As von der Leyen noted, the EU’s new strategy will initially focus on dialogue with Chinese counterparts, but she made it clear that Europe is now urgently seeking alternative sources and partnerships elsewhere in the world.
Meanwhile, on the other side of the globe, Australia has emerged as a linchpin in a new Western minerals alliance. In a high-profile ceremony at the White House Cabinet Room, Australian Prime Minister Anthony Albanese and former U.S. President Donald Trump signed a sweeping critical minerals deal worth a staggering US$8.5 billion (AU$13.1 billion). The agreement, finalized just hours before the official visit, will see almost every Australian state and territory benefit from investments targeting the extraction and processing of key minerals like gallium, neodymium, praseodymium, dysprosium, terbium, titanium, zircon, and graphite.
Western Australia stands to gain significantly, with AU$307 million earmarked for upgrading an alumina refinery south of Perth to produce gallium of more than 99.99% purity—a substance crucial for advanced technologies and military applications. The plant, owned by American company Alcoa, is expected to cut China’s share of the global gallium supply by about 10%. “So, 99 per cent of the world’s gallium is currently made in China,” Alcoa CEO Bill Oplinger told reporters in Washington. “This project will serve approximately 10 per cent of the global market for gallium, and we’re uniquely positioned to be able to do that in Western Australia.” The project’s estimated resource value is AU$770 million.
But Western Australia is just the tip of the iceberg. The U.S. has pledged US$230 million (AU$350 million) for the Northern Minerals Project, which will produce xenotime concentrate containing heavy rare earths dysprosium and terbium, minerals essential for high-performance magnets and electronics. The project’s resource value is estimated at AU$590 million.
Perhaps the crown jewel of the deal is the Arafura Rare Earths Nolans Project in the Northern Territory. This operation will produce neodymium and praseodymium—vital for manufacturing strong permanent magnets used in everything from wind turbines to precision-guided missiles. With an eye-popping estimated resource value of AU$55 billion, the Albanese government has committed an additional AU$153 million in equity, supplementing a previous AU$1 billion investment. The U.S. is considering a further US$461 million, pending final review. Arafura’s CEO Daryl Cuzzubbo, reflecting on the unprecedented cooperation, remarked, “In my 35 years of being in the resource sector, I’ve never seen this level of alignment and co-operation at the highest levels of two governments.” He added, “Every $1 of rare earths enables $600 of end product value. So, the US really needs access to reliable critical minerals and there’s no country better able to do that than Australia.”
Other states are also set to benefit. New South Wales and Queensland’s RZ Resources Project will extract heavy mineral concentrate—mainly titanium and zircon, but also rare earths—from the Murray basin’s Loxton–Parilla Sands, with the U.S. investing US$450 million and Japan’s JX Metals adding $20 million. Queensland’s Graphinex Project in Townsville, home to the world’s third-largest graphite deposit, will receive US$860 million (AU$1.3 billion) from the U.S. for an end-to-end operation encompassing mining, refining, and battery component manufacturing. Victoria’s Goschen Rare Earth and Mineral Sands Project will get AU$75 million from Australia and US$200 million (AU$308 million) from the U.S.
The timing of the deal was no accident. As reported by NewsWire, the agreement was hammered out in the days following China’s new restrictions—a move Western strategists had long warned could be used to flex Beijing’s dominance in the sector. At the White House, Trump downplayed the idea that the deal was a direct response to China, stating it had been “negotiated over a period of four or five months.” Still, he left no doubt about the leverage the U.S. holds if China attempts to interfere. “We have a tremendous power, and that’s the power of tariff,” Trump said. He elaborated, “If they pay enough tariffs, it would cut off China’s ability to do business with the U.S. And if they don’t do business with us, I think China’s in big trouble, I’ll be honest with you.”
Trump’s comments, while blunt, reflect a growing bipartisan consensus in the West that economic security now hinges on reliable access to critical minerals. The EU’s von der Leyen echoed this sentiment, emphasizing that in the short term, Europe must seek solutions with China, but the long-term goal is clear: diversify supply chains and reduce strategic vulnerabilities.
It’s not just about economics, either. The minerals in question power everything from electric vehicles and renewable energy systems to the most advanced military hardware. As the world accelerates toward greener technologies and digital transformation, the stakes have never been higher.
For now, the flurry of deals and diplomatic maneuvering signals a new era in resource geopolitics. With China’s grip on rare earths facing unprecedented challenges, the coming years will test whether Western alliances can deliver the security and innovation their economies—and their citizens—demand.
