High Voltage: Rare earths stocks welcome AUS-US bromance

• Albanese-Trump meeting promises $8.5bn of investment in critical minerals
• Rare earths stocks set to benefit as China bans exports for military use from December
• Industry experts say less red tape and more refineries are needed

Our High Voltage column wraps all the news driving ASX stocks with exposure to lithium, cobalt, graphite, nickel, rare earths, and vanadium.

Critical minerals players enjoyed a boost this week after PM Anthony Albanese’s Washington DC talks with President Trump resulted in an agreement to pump US$8.5bn (+A$13bn) into funding critical minerals supplies out of Australia.

Its aim is to build a conveyor belt from Australia to the US, with each committing at least US$1bn of initial investments as part of the agreement in a bid to wrestle control of rare earths pricing and supply from China.

Brewing for months, it came after China slapped export restrictions on seven heavy rare earth products back in April that have choked supplies for Western manufacturers of cars, electronics and defence technology, and extended those controls this month.

A lot of rare earths players are looking poised to benefit from the hard launch of the new relationship, with a swathe of announcements from the Export-Import Bank of the United States (EXIM) issuing letters of interest to advance critical minerals projects between Australia and the US.

The deal has of course been welcomed by the industry, the Minerals Council of Australia CEO Tania Constable said it is a partnership that will enhance Australia’s reputation as a place to do business, and “encourage greater investment in Australian mining and processing, at a time when investment is urgently required to unlock the nation’s next chapter of prosperity.”

Two strategically significant projects have been prioritised under the Framework.

In Western Australia, the Alcoa–Sojitz Gallium Recovery Project will deliver around 10 per cent of the world’s gallium supply, a critical input for semiconductors and advanced defence technologies.

In the Northern Territory, Arafura’s Nolans Project will produce about five per cent of global rare earths, strengthening energy security and defence supply chains for Australia and its allies.

We need less red tape and more refineries

On the flipside, Sydney University’s Dr Lian Sinclair, an economic geographer in the School of Geosciences, and an expert in the global production networks of critical minerals, said investment in process is still what’s needed to reduce China’s dominance of the rare earths industry.

“With more than $6bn in government funding and multiple advanced projects, Australian rare earths are set to contribute to supply the world’s electric vehicle and renewable energy production,” she said.

“However, without investment in refineries and magnet production in allied countries, Australian miners will continue to either sell into or be outcompeted by Chinese domestic industry.”

Dr Sinclair also noted that the focus of the US, Europe and South Korea needs to be on investment in their ‘midstream’ (magnet and advanced metal processing industries), if they really want to ‘derisk’ EVs and wind turbines from Chinese rare earth supply.

Her cautious sentiments were somewhat echoed from Victory Metals (ASX:VTM) CEO Brendan Clark, who welcomed the deal but said we need to grab the bull by the horns, with China set to ban exports of its heavy rare earths if they relate to military use from December.

Clark said the door was open for Australia to leverage its strategic importance as a stable and reliable partner to major global nation customers, such as the US, the UK, Europe and others, particularly for military applications.

“China’s move has galvanised the West into action, and this is Australia’s opportunity to step in provide our partners with the materials critical to their technology and defence supply chains,” he said.

“Australia has some of the most promising heavy rare earth projects in the world, with significant ratios of these critical strategic defence metals that can help break China’s dominance.”

Clark also said red tape is more of an issue than anything.

“What has hampered us in the past has been our multiple layers of government, complex planning and environmental processes, and restrictions on the levels of foreign investment needed to bring feasible projects to life,” he said.

“We are having meetings almost weekly with potential investors, government partners, global manufacturers and offtake customers who are excited about the opportunity Australia presents to diversify and strengthen their supply chains, but are also looking for signs that we are open for business.

“We’re even seeing end users like car makers, who don’t make magnets themselves, starting to intervene to help their OEMs lock in supply.

“Industry’s message to Government is to ensure these strategic heavy rare earth projects are given every opportunity to succeed – meaning a more streamlined, cross-government approach to planning and approvals and policies that encourage and facilitate investment.”

The company developing the 320.6Mt North Stanmore project in WA where they recently announced achieving a 53% increase in terbium grades, 25% increase in dysprosium and 100% increase in scandium using a low-cost processing method.

Battery Metals Winners and Losers

Here’s how a basket of ASX stocks with exposure to lithium, cobalt, graphite, nickel, rare earths, magnesium, manganese and vanadium is performing >>>

Weekly Small Cap Standouts

VHM (ASX:VHM)

The company has secured up to A$75m from Export Finance Australia (EFA) to support development of its Goschen rare earths and mineral sands project in Victoria.

Goschen has an ore reserve of 220Mt at 3.6% total heavy minerals and a large mineral resource of 890Mt, including monazite and xenotime-hosted rare earth elements.

VHM has a clear path to production, with dual commodities in rare earths and heavy minerals concentrates (zircon and titanium), and a unique orebody containing light (neodymium, praseodymium) and heavy (dysprosium, terbium) rare earths mineralised in sands.

The EFA support complements the company’s recent updated letter of interest from the Export-Import Bank of the United States (EXIM) for up to US$200 million (~A$304m) with an improved term of up to 15 years.

Together, the EFA and EXIM Letters demonstrate how Australia’s and America’s Single Point of Entry (SPE) framework for critical minerals enables streamlined referrals and joint financing support for eligible projects.

EFA’s support remains subject to further due diligence, including environmental, social and financial assessments, along with standard credit and legal approvals.

VHM says the combined indicative support from EFA and EXIM highlights the project’s strategic importance and its potential to contribute to global rare earths supply diversification and downstream value creation.

Astron (ASX:ATR)

As interest in the Donald REE and mineral sands JV in western Victoria grows, partners Astron (ASX:ATR) and Energy Fuels have received a conditional letter of support from Export Finance Australia for up to A$80m in senior debt.

This interest coincides with Australia’s push to become a serious supplier of critical minerals to Western allies and follows the pact reached overnight between Australia and the US.

The LOI marks the first public sign that government-backed financiers are prepared to step in behind what is shaping up as one of Australia’s most advanced, build-ready REE projects.

It’s an important milestone in the broader A$520m funding stack being stitched together.

Donald is fully permitted with offtake-backed for life-of-mine concentrate and tied into Energy Fuels’ White Mesa Mill in Utah, giving the West a new non-Chinese source of light and heavy REEs from as early as H2 2027.

Latrobe Magnesium (ASX:LMG)

Another one.

A Letter of Interest from the US Export-Import Bank (EXIM) for potential funding has been welcomed by Latrobe Magnesium (ASX:LMG) and its investors this week.

EXIM states that it would be prepared to finance up to US$122 million (A$200 million) for the company’s Stage 2 Commercial Plant in the Latrobe Valley of Victoria.

The show of support positions LMG as a key link in the western supply chain for a critical mineral facing surging demand but whose output is dominated by China.

The US no longer has any domestic primary magnesium metal producers and LMG is a leading candidate to supply this vital metal into that market.

Magnesium has the best strength-to-weight ratio of all common structural metals and is used to lighten alloys used in cars, planes and drones. It’s also used in a wide range of other products from defence hardware to cans, clean energy and electronics.

ABX (ASX:ABX)

The company is gearing up to drill 39 holes to expand the T8 rare earth elements (REE) project in Tasmania next month, where high-grade mineralisation was flagged in a scout drill campaign in back in May.

The company says its projects are suited to early low cost production because they are shallow, ionic absorption clay type of rare earth resources enriched in the most critical REE dysprosium (Dy) and terbium (Tb).

Over the past 18 months, ABx has developed strong relationships with planned processing operations in the USA, such as Ucore, and MD and CEO Dr Mark Cooksey says the company is uniquely positioned to provide feedstock.

“ABx is excited to be drilling for extensions of this shallow, high grade rare earth mineralisation which confirmed that all of ABx’s REE mineralisation in northern Tasmania are exceptionally high grade in Dy & Tb which is potentially globally significant and unmatched in Australia,” he said.

“ABx is investigating a low cost, low impact method of rapidly developing this rare earth province.

“China’s restriction on exports of critical heavy rare earths, especially Dy & Tb, sends a clear message to the global market and ABx is in a unique position with its Dy & Tb-rich shallow clay hosted rare earth deposit in a stable jurisdiction.

“Dy & Tb are vital for many products including military technologies and offshore wind turbines.

“This is recognised by the industry, for example our MoU to supply rare earth feedstock to Ucore which is planning a Strategic Metals Complex in Louisiana with the support of the US Government.”

Arafura Rare Earths (ASX:ARU)

The Gina Rinehart-backed owner of the Nolans rare earth mine to oxide development in the Northern Territory already boasted upwards of $1bn in funding commitments from sovereign export banks and other Canberra funds.

This week, the company announced up to US$300m from the US Export-Import Bank at an official ceremony in DC, as well as conditional approval for up to US$100m in funding from Export Finance Australia.

At Stockhead, we tell it like it is. While Victory Metals, VHM and Astron are Stockhead advertisers, they did not sponsor this article.