When American President Donald Trump and Australian Prime Minister Anthony Albanese signed an $8.5 billion critical-minerals pact in Washington, the headlines were about lithium and rare earths. The real story lies beneath.

This is not a mining deal but a manoeuvre in the century’s defining contest between sea power and supply chains, between the United States and China.

China dominates the raw materials of modern industry. It mines 70% of the world’s rare earths, refines 90%, and controls almost the entire global magnet market. Those magnets turn the rotors in electric vehicles, wind turbines, missiles, and submarines, the instruments of both prosperity and power. By contrast, the United States finds itself nearly dependent on its chief strategic rival for the elements that make its own deterrent work.

The new pact with Australia is an attempt to claw back that advantage. Each government will contribute at least a billion dollars in the next six months, not as grants but as strategic ballast, a joint framework to shore up the industrial seabed of the alliance.

The funds will underwrite mines like Arafura’s Nolans project in the Northern Territory, which could supply 4% of the world’s neodymium-praseodymium oxide, and a proposed gallium plant in Western Australia that could account for 10% of global production. Gallium, a key input for semiconductors, was one of the metals Beijing halted exports of in late 2024 to remind Washington who commands the resource tides.

What the Americans and Australians are attempting is to build what one analyst called an “anchor market,” a collective bloc strong enough to withstand Beijing’s use of price wars as an economic weapon.

When cobalt prices crashed by 60% between 2022 and 2024, China kept producing, absorbing losses to drive rivals out. The result was the closure of the only American cobalt mine in Idaho. Hence the call for price-floor mechanisms and emergency subsidies, tools not of free markets but of economic statecraft.

The minerals deal runs parallel to a strengthening of AUKUS, the trilateral defence and security pact linking the United States, Australia, and the United Kingdom. Announced in 2021, AUKUS will see Australia acquire nuclear-powered submarines from 2032 and deepen co-operation across artificial intelligence, cyber security, and undersea technologies.

Its purpose is to maintain Western influence and deterrence in the Indo-Pacific, securing both the sea lanes and the technological edge of the alliance.

It is no coincidence that the minerals announcement was paired with renewed emphasis on AUKUS. The two moves are halves of the same strategy: to secure the supply lines beneath the sea and the shipping lanes above it.

Alfred Thayer Mahan once wrote that industrial and naval strength were: “co-extensive,” each sustaining the other. This pact reflects that same logic for an age of microchips rather than coal.

For China, the danger lies not in this single deal but in its potential to multiply. Should the United States, Australia, Japan, and the European Union form a coherent minerals market, Beijing’s leverage over critical inputs could erode as quickly as its export margins. For the United States, the danger is the opposite, that this remains a gesture rather than a system, with too little capital, too much bureaucracy, and too little time to reverse the dependency.

What began as a minerals agreement is therefore an early chart of a new maritime economy. The contest is no longer just about who sails the oceans, but about who owns the elements that power the ships.

Alfred Thayer Mahan (1840–1914) was an American naval officer and historian whose ideas reshaped global strategy. In his landmark 1890 book The Influence of Sea Power upon History, he argued that nations rise or fall based on their control of the seas. His work inspired major naval expansions in the United States, Britain, Germany, and Japan, and established the principle that maritime power, strong fleets, trade routes, and overseas bases, is essential to national strength and global influence.