Australian Critical Minerals Producers Eye US Expansion as Policy and Cost Barriers Slow Domestic Growth
Some of Australia’s leading critical minerals companies are accelerating plans to build processing facilities in the United States, even as Canberra pushes to strengthen its domestic industry.
Last week, a delegation of Australian firms—including Australian Strategic Materials (ASM), Ionic Rare Earths, and International Graphite—visited Washington and New York to meet with senior U.S. officials and potential investors, company executives told Reuters.
Executives cited the scale of the U.S. customer base, its growing electric vehicle (EV), defense, and advanced manufacturing sectors, as well as cheap energy and generous subsidies.
“We’ve identified six states as ones that we’re looking at seriously,” said Annaliese Eames, Chief Legal Officer at ASM, which is expanding beyond its rare earths metallisation plant in South Korea. She confirmed that the company is conducting detailed due diligence in Oklahoma and South Carolina.
“What drew ASM to the U.S. was more than strong federal and state support and incentives. It’s the commitment that they’re making to grow the entire ecosystem,” Eames added.
For companies supplying the defense sector, locating facilities in the U.S. is also a matter of national security and logistical necessity, given the complex steps required to transform raw materials into magnets for wind turbines, EVs, and missiles.
That is the case for Ionic Rare Earths, which is seeking to replicate its magnet recycling technology developed in Belfast across several U.S. states, including Tennessee, where it is in advanced discussions, according to Managing Director Tim Harrison.
“There are a number of other states that can provide very low-cost power. They also have a lower labor cost base, and both federal and state governments are willing to deploy immense funding,” Harrison said.
Meanwhile, International Graphite, which is developing an advanced processing plant in Western Australia, is also exploring opportunities in the U.S. and Europe to position itself closer to end-user requirements, CEO Andrew Worland noted.
China’s April 2025 restrictions on rare earth exports have galvanized U.S. efforts to fast-track its domestic rare earths industry. Rising global prices for these minerals are further encouraging investment and unlocking project financing.
Still, competition for U.S. funding remains intense. Lynas Rare Earths, the world’s largest rare earths supplier outside China, recently warned that its planned heavy rare-earths processing facility in Texas could stall after the Trump administration provided multi-billion-dollar funding to a U.S.-based competitor.
The trend underscores the policy hurdles facing Australia, which has long sought to diversify its exports beyond fossil fuels. A PwC report in 2023 estimated that developing a robust critical minerals sector could add A$170 billion to Australia’s economy by 2040.
However, industry leaders argue that high energy and labor costs, coupled with a cumbersome approvals process, are undermining Australia’s competitiveness. Advanced manufacturing also remains limited, hampered by the closure of the car industry in the 2010s.
“For an Australian company to look at building it in Australia—where do we sell our materials? Where are the metals, alloys, magnet capacity being built? It’s not being built in Australia because our cost base is too expensive, and we have minimal advanced manufacturing industry,” Ionic’s Harrison explained.
Despite these challenges, Australia has introduced measures to bolster its competitiveness. In February 2025, Canberra approved a A$17 billion production tax credit, offering a 10% offset for critical minerals processors starting in 2027.
The government is also strengthening partnerships with key allies—including Japan, India, and the UK—to expand its global customer base, PwC’s Amy Lomas noted.
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