What record US defence spending could mean for Australian miners

The US Government has passed a record $US901 billion defence policy bill, potentially strengthening the outlook for Australia’s mining industry by signalling deeper collaboration on resource exploration and critical minerals supply chains. 

The bill follows the recent signing of the Critical Minerals Agreement Framework between Australia and the US, unlocking an $US8 billion investment pipeline and reinforcing Australia’s role as a reliable supplier of minerals essential to global defence and clean-energy industries. 

This week also saw US Secretary of State Marco Rubio and US Secretary of War Pete Hegseth host Australia’s Foreign Minister Penny Wong and Deputy Prime Minister and Defence Minister Richard Marles in Washington, D.C., where both nations reaffirmed a commitment to expand cooperation on critical minerals and strengthen economic ties. 

In a joint statement, both countries emphasised the importance of rapid implementation of the Critical Minerals Framework and highlighted projects already advancing under the partnership – including Alcoa’s gallium project in Western Australia, a development set to diversify supply for defence industries and showcase Australia’s emerging strength in high-value critical minerals production. 

Australia’s position as a preferred partner was further reinforced by a coordinated $US600 million package of Letters of Support from Export Finance Australia and the US EXIM Bank to Tronox, backing an expansion of its rare earth and mineral operations in Australia. This investment will help secure a major critical minerals supply chain for the US while supporting growth and downstream opportunities in Australia’s mining sector. 

Both governments also committed to working together on reserve mechanisms, offtake arrangements and long-term supply strategies – measures that provide certainty for Australian miners looking to expand production and attract new project financing. 

The bill identifies the advancement of secure critical minerals supply chains as a top priority for the US and its allies. For Australia, this reinforces sustained demand for commodities such as rare earths, lithium, manganese, nickel and gallium. 

It also calls for increased US focus on onshoring processing while partnering with trusted nations on geoscience collaboration, data sharing and sustainable resource development. This approach aligns closely with Australia’s strengths in geological research, mining operations expertise and a sizeable pipeline of critical minerals projects. 

The legislation also directs the US Secretary of State to facilitate private-sector investment in critical minerals and rare earth exploration and development – a move expected to open further funding channels for Australian miners and project developers. 

Taken together, the bill and the accompanying diplomatic commitments mark a significant step towards building a secure, allied-controlled critical minerals ecosystem.

For Australia, it strengthens market access, accelerates investment flows, and reinforces the nation’s role as a cornerstone supplier to global defence, clean-energy and advanced manufacturing industries.