Australian Partnership in Critical Minerals: A Primer

A rough-and-ready guide to critical minerals in the ASX.

I have spent this past week considering the prospects of a critical minerals partnership between the United States and Australia ahead of a planned meeting between Trump and PM Albanese. In my view, Australia is poised to be our greatest western ally in developing supply chain resilience across the critical minerals sector. The USA has even extended an invitation to purchase equity stakes on their side of the sector. Given these tailwinds, I wanted to briefly expound on how I’ve decided on investments over in ASX.

I. Understanding the Deficits of the Western Supply Chain

When I approach new investments in this sector these day, I consider the following question: Where are the deficits in the different areas of our supply chain (downstream, midstream, upstream)? And which minerals and materials do we need most desperately, given global supply constraints when attempting to divest from our reliance on China?

We can get an answer by starting with an analysis predicting net loss to US GDP relative to risk of supply disruption. That information can be found in the following graphic given to us in a 2025 report by the USGS.

If we look closely, we can see that there are a number of critical minerals that have a high probability of disruption and a high impact on GDP. This isn’t the only metric to use, however. We should also consider that there is a particularly critical need for some of these same minerals for defense purposes - as specifications for defense are stringent and China has restricted exports of the ingredients necessary to produce them this year (tightening their policies recently, as we have seen).

With this in mind, we find that the critical minerals most crucial to secure are largely in areas like heavy rare earths, tungsten, graphite - as well as cobalt given its need for defense and our lack of a non-sullied supply that isn’t refined in China.

Great. From here, we can consider the parts of the supply chain that are most critical in relation to these minerals. And this is where I am excited. When it comes to heavy rare earths, we desperately need companies that can perform at all three broad areas of the supply chain. And although build-out of infrastructure for the midstream and the end of the chain needs to happen in parallel to everything else, we really can’t even get to them unless we have a standing supply of the raw materials.

The United States desperately needs time to get the deposits controlled by domestic companies online in ways that can cover demand. As an example, Energy Fuels (UUUU) has recently secured final permitting necessary for their Donald Project (in Australia) for heavy feedstock. But they won’t be able to meaningfully supply their own from this location until late 2026. At the moment, they have been relying on Chemours limited supply for their processing/refining. But Chemours can’t supply enough - and we aren’t in a position to wait.

With no tenable domestic supplier of the mining-side (the beginning of the chain) and a desperate need for finished heavy rare earth products, we have a massive bottleneck for the rest of the chain (which, as I said, is already is woefully underdeveloped). It looks increasingly likely that the best suited candidate to provide what we need - at least in the interim whilst we get our own infrastructure built out - is Australia.

From here we can consider our strategic investments. I’ll disclose my own below.

II. My Positions ASX

These are the companies I have invested in at the time of writing this. Blessings across the ocean; the island of kangaroos.

Lynas: The champion for rare earth (lights; heavies) that isn’t aligned with China. They have a refining facility in the works in the USA already. Gina Rinehart (Australia’s richest woman) is a large stakeholder and is connected to Trump.

Iluka: A strategic choice for heavy rare earth supply and one of the only viable short-term contenders for partnership with UUUU to cover feedstock requirements before the Donald project is operational. However, keep in mind that Iluka needs these materials for their own purposes too (with their refinery being commissioned around 2027).

Northern Minerals: Partnered with Iluka for heavy rare earth feedstock. They had Chinese stakeholders up until March 2025 that were forced to divest by the Australian government, clearing the path for western partnership and chain independence.

VHM: Heavy feedstock supplier, received a $200 million dollar letter of interest from EXIM recently. They wouldn’t be able to supply companies like Energy Fuels (UUUU) the material they need in the short-term and 60% of the initial product the first few years will be given to Shenghe. Still - they could be a needed and strategic source of product for the western sphere when operational.

Cobalt Blue: A leading candidate for cobalt refining - an area where there is little western capacity at all. This company met with the White House ahead of Trump’s visit to Australia this month. Raw cobalt is mined primarily in the DRC and in Australia.

Arafura: Supplementary light rare earths play, advanced stage relative to competitors outside MP and Lynas. Another slidedeck can be viewed here. Gina Rinehart also has a 10% stake (largest shareholder).

Australian Strategic Metals: Like Cobalt Blue, ASM was also at the White House meeting last month. They are positioned uniquely for downstream activity in the chain - another area we desperately need developed. There aren’t many competitors here.

Aclara Resources: Player in the ASX midstream game. I like them.

III. A Note on China <-> USA Trade Tensions

I wanted to close with just one note of caution. We have seen volatility in our sector’s favor as a result of escalating tensions between Trump and Xi ahead of a potential talk at the end of the month. For anyone new - please do understand that the outcome of these talks will move the sector, causing either a continued lift if a deal is not reached or a (possibly precipitous) retraction if a deal is reached. Plan accordingly.

If you are worried about it - make sure to time your entry and exit to avoid this event. In the long-term, a deal with China is unlikely to stop the USA from continuing to build out its chain. What Washington has seen from the export controls rolled out this year by China is that we cannot allow them to hold such leverage. However, you may find yourself shaken out of your position if the road gets rocky ahead and you don’t have the same resolve or conviction.

Safe investing friends and love you all,

Steve

Disclaimer: I am not in the business of giving financial advice. That is, I am not a financial advisor. None of what I say here is a recommendation to hold or not hold shares or other instruments of any particular company or series of companies. All that is contained on my page is research in which I convey and substantiate personal views and commentary about where sectors, economic policies, industries, so on, may go. As always, please do your own research and understand the risks involved before placing any trades. I am not responsible for any of the decisions you choose to make.