What the Australia–U.S. Critical Minerals Deal Means for Our Environment

Australia and the United States (U.S.) have signed a landmark agreement to strengthen supply chains for critical minerals, the essential ingredients of clean energy technology. These are the metals that make wind turbines spin, electric vehicles move and solar panels store power. The partnership promises to build a more secure, transparent and sustainable path toward net zero. But like any major mining story, the environmental stakes are high.

Image source: Anna Moneymaker/Getty Images via The Guardian, 2025.

The promise is powering a cleaner future

Critical minerals such as lithium, rare earths and gallium are doing the heavy lifting within the clean energy transition. By teaming up, Australia and the U.S. aim to diversify global supply, reduce reliance on dominant producers and accelerate the rollout of low-carbon technologies (The Guardian, 2025).

Australia brings geological abundance, the U.S. brings demand, capital and manufacturing capacity. So together, they’re investing in processing and refining, which are steps that has the potential to keep more environmental value onshore and raise global standards for responsible production. This leads to a supply chain less vulnerable to political shocks and more capable of fuelling the renewable energy revolution (BBC News, 2025).

But mining is still mining

Cleaner supply chains don’t always equal cleaner operations. Extracting and refining critical minerals is energy- and water-intensive, with significant risks to ecosystems, communities and cultural heritage. Rare earths, for instance, often produce radioactive waste. If these projects expand without rigorous oversight, we risk swapping one environmental problem for another (The Guardian, 2025).

Downstream processing also brings it own challenges. Many of the new facilities announced under this deal, including Alcoa’s gallium project in Western Australia (WA), are designed to add value locally, but that value will only be sustainable if powered by renewable energy and governed by strict emissions standards (ABC News, 2025).

For Australia, the environmental opportunity lies in leadership. By embedding world-class ESG standards into mining and processing, we can prove that clean-tech materials can be produced responsibly, without compromising water systems, biodiversity or First Nations rights. Environmental accountability also lies in asking the right questions. The kind that turn good intentions into measurable impact. Questions like these ensure we’re filtering short-term profit through a long-term sustainability lens:

• Where are materials sourced and refined?

• How are waste, water and community impacts managed?

• Is the project powered by renewables?

By applying this scrutiny, investors, regulators and everyday Australians can help ensure that critical minerals genuinely support the clean energy transition.

Key projects to watch

These five Australian projects are directly or indirectly linked to the new partnership and could shape the future of sustainable mining:

1. Arafura Rare Earths – Nolans Project (NT)

   Produces neodymium and praseodymium for EV motors and wind turbines. Fully permitted, but environmental diligence is crucial due to radioactive by-products.

2. Alcoa Gallium Project (WA)

   Adds value by processing gallium, used in semiconductors, directly from alumina refining. The environmental focus will be on renewable power and waste management.

3. Northern Minerals (WA)

   Developing heavy rare earths essential for permanent magnets. Requires strong tailings oversight and rehabilitation commitments.

4. VHM Ltd (VIC)

   Exploring vanadium and other battery minerals. Environmental watchpoints include water intensity and First Nations engagement.

5. RZ Resources (NSW)

   An emerging player exploring multiple critical minerals. Early-stage projects should be scrutinised for baseline environmental and social safeguards.

References

ABC News (2025). Critical minerals deal: What do we use them for? https://www.abc.net.au/news/2025-10-21/critical-minerals-deal-what-do-we-use-them-for/105898652

BBC News (2025). Australia–US critical minerals deal: Why these metals matter to clean energy. https://www.bbc.com/news/articles/cly9kvrdk2xo

The Guardian (2025). Australia and the US have signed a critical minerals deal to take on China’s monopoly. https://www.theguardian.com/world/2025/oct/21/australia-us-critical-minerals-rare-earths-deal-china-explainer

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