Good morning (afternoon, evening), this is the 42nd edition of Critical Points, our roundup of key links and stories designed to help you navigate the current economic, political, technological, and social landscape.
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This week we cover developments in the critical mineral space. We talk about:
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🇦🇺 Australia has concluded two separate agreements with the United States and the European Union, both of which include cooperation on the extraction of critical and rare earth minerals.
🇺🇸 The agreement with the United States provides for A$5 billion in U.S. investment in Australian mining projects, securing supplies of nickel, cobalt, gallium, magnesium, vanadium and graphite. These materials are also critical for defence applications.
🇪🇺 The agreement with the European Union forms part of a broader free trade deal, which also includes the elimination of tariffs on a range of agricultural and food products.
📊 Global demand for rare earths continues to rise. These agreements fit into wider U.S. and EU strategies to reduce dependence on China, which holds nearly half of global reserves and accounts for around 60% of current extraction.
⛏️ Australia ranks as the fourth‑largest holder of rare earth reserves, accounting for approximately 7% of the global total.
🇨🇳 However, China still maintains a near‑monopoly on processing, controlling over 90% of global output at that stage of the value chain.
Considering that many critical minerals projects are still in early phases and difficult to finance without government investments or other political guarantees, an A$5 billion US investment in Australian mining projects is quite substantial, compared to previous initiatives of the same kind. However, to meet global requirements, the IEA estimates that up to US$600 billion in mining investment will be needed by 2040. Negotiations for the agreement between the EU and Australia had been ongoing for several years, but have gathered pace over the last year in response to US policies – not an isolated case in a flurry of recent deals for the EU. These agreements should be seen as political tools to bring about restructuring of critical mineral supply chains. They aim to create ‘trusted’ circuits between allies: Australian mines, US/EU finance, processing outside China, industrial offtake agreements, stockpiling, and, looking ahead, also price floors or public instruments to protect non-Chinese projects from dumping or volatility. The G7, in June 2026, moved in the same direction, with coordination on stockpiling, IEA early warning systems, possible joint procurement and price-gap subsidies.
📌 The contents of the US-Australia agreement on Australian and US government websites, and finally the report on the matter by Reuters.
📌 News of the EU-Australia agreement on rare earths, as reported by Al Jazeera.
📌 The recently signed free trade agreement between the EU and Australia
https://commission.europa.eu/topics/trade/eu-australia-trade-agreement_en
📌 The European agreements with Australia form part of the broader framework of the EU Critical Raw Materials Act (CRMA), which came into force in May 2024 and sets out the Union’s strategy up to 2030. Here is the full text of the European legislation on critical materials.
📌 China now holds almost half of the world’s rare earth reserves.
📌 Australia is rapidly expanding its rare earth mining sector as an alternative to China, attracting 84% of global investment in 2024.
📌 Rare earth processing and the Chinese monopoly.
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🇪🇺🇺🇸 On 24 April 2026, the European Union and the United States signed a memorandum of understanding on a strategic partnership for critical minerals, aimed at securing resilient supply chains across the EU, the U.S., and third countries.
🧾 The memorandum sets out broad principles for cooperation, including the exchange of information on investments, the facilitation of permitting processes, and mechanisms to regulate the critical mineral market.
👀 Based on these principles, an Action Plan includes protectionist measures, such as the introduction of price floors for EU and U.S. producers and the creation of a preferential market.
💭 The agreement is non‑binding, does not specify detailed implementation measures, and allows either party to withdraw with six months’ notice.
🇨🇳 At present, critical minerals represent one of the few areas of relatively smooth EU–US cooperation, reflecting a shared strategic objective of reducing dependence on China.
🛡️ The agreement comes in a broader context in which access to supply chains is becoming increasingly contested, and where extraction and processing sites in third countries are investing more heavily in security and risk management.
The partnership is clearly aimed at China, although the agreement never states this explicitly, referring instead to “non-market practices”. Countering Chinese dominance in critical mineral supply chains remains almost the only area in which the US and the EU can still cooperate without friction under the Trump administration. In fact, only days after the agreement, the US announced higher tariffs on European carmakers and the withdrawal of 5,000 troops from Germany. Therefore, it is probably reasonable to read the agreement, which is non-binding, as a way of buying time while both sides work independently towards solutions that fit their own constraints.
Moreover, it is worth noting how among European policymakers and commentators, deregulation has become the main, albeit narrow, scope for manoeuvre on competitiveness, reflecting the lack of political capacity to respond through public investment.
It is also important to monitor the impact that such deals could have on third countries rich in minerals. These are often politically unstable or ravaged by military conflicts, and strengthening and protecting mineral supply chains could entail military involvement. The DRC is a case in point, where foreign private military contractors are entering the country specifically to supervise mining operations.
📌 The European Commission’s announcement.
📌 The documents published by the Commission.
📌 The text of the Memorandum of Understanding, which specifies that the agreement is not binding.
📌 A good explanation of the agreement
📌 The 2024 European Critical Raw Materials Act, which aimed to reduce dependence on non-EU markets for critical raw materials, set quotas for minerals that had to be mined and processed within the EU, and committed to creating a ‘club’ of countries to strengthen supply chains.
📌 An example of the militarisation of the mining industry in the Democratic Republic of the Congo, which we discussed in our Critical Point #36:
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🇪🇺 The European Union’s Critical Raw Materials Act (CRM Act) entered into force in May 2024, with the aim of reducing dependence on non‑EU suppliers for raw materials essential to the energy transition and digital technologies.
🔋 The legislation targets 34 critical materials, of which 17 are classified as strategic, including rare earth elements used in electronics and lithium for batteries.
⛏️ The CRM Act promotes domestic production and sets clear benchmarks for supply diversification. For each critical material, the EU aims for:
10% of annual consumption to be extracted within the EU
25% to come from recycling within the EU
40% to be processed within the EU
No more than 65% to be sourced from a single third country
🌐 The regulation also provides ways to establish funding for strategic projects both within the EU and in partner countries, with the broader goal of developing a network of trusted suppliers and strengthening the resilience of global supply chains.
🏗️ Under the CRMA, the EU selected 47 strategic projects within the Union in March 2025 and 13 other projects outside the EU in June 2025. These cover extraction, processing and recycling, with a strong focus on lithium, nickel, graphite, cobalt and manganese, all key materials for battery manufacturing.
The CRMA tries to make critical raw material supply less exposed to external pressure by facilitating sourcing within Europe and in partner countries. By creating a regulatory and permitting framework for strategic projects, the CRMA opens financing channels for high-priority minerals, with the current focus falling especially on materials needed for the energy transition and battery supply chains. Offtake agreements guarantee revenues for future projects, making projects easier to finance. Offtake agreements between private partners can secure revenues for future projects, making them easier to finance. However, this does not guarantee their economic competitiveness against international competitors, especially Chinese producers, nor does it guarantee their financial viability. Since the EU cannot directly steer investment or guarantee prices during scale-up, there is no sure mechanism to ensure that domestic production targets will be met.
📌 The regulation as published on the European Commission’s website.
📌A commentary summarising the key points of the European law and its implications for private companies.
📌 Summary of the 47 projects in the EU and the 13 in partner countries.
📌 We recommend a fortnightly newsletter written by Eduardo Castellet Nogués on the structure of global supply chains, which very often focuses on critical minerals and other mining projects:
📌 For more specific sources, with specific sections dedicated to rare earths, uranium, copper, and lithium, we recommend reading the Critical Minerals Journal:
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