A new deal between the United States and Australia could support the development of a Western rare earths supply chain, reducing reliance on China, analysts at UBS highlight in a note.
The two countries signed a critical minerals framework as part of a wider deal to boost defence and technology cooperation, with the initial information pointing to US$8.5 billion in ready-to-go projects, and US$1 billion in funding each from the US and Australia over the next six months.
The US Export-Import Bank has issued seven Letters of Interest for more than US$2.2 billion in potential financing.
It includes a planned 100 tonnes per annum gallium refinery in Western Australia, with Alcoa named in early releases.
UBS noted this could mark the start of more transparent project developments, involving Australia, the US and potentially Japan.
The Swiss Bank expects supply chain diversification to continue, despite any near-term easing in US-China trade tensions.