From its election, the Albanese government’s strategy for the US alliance has been to make itself as indispensable as possible to the Americans. This includes making Australian territory available to the US military for use against China, expanding marine training in the Top End, greenlighting B-52s to operate from RAAF Tindal, allowing US supply depots for use against China to be located in Australia and, under AUKUS, providing a home-away-from-home for US submarines in Perth.
The return of Donald Trump didn’t give the government pause. For all the nonsense from the media and the Coalition about Albanese being entranced by China or not being able to get a meeting with Trump, he has only doubled down on Operation Indispensable. In particular, he has been keen to offer the US a China-free critical minerals supply chain.
Despite hitting what was assumed to be a sweet spot of US hostility to China, Labor’s pitch failed to excite the Americans earlier in the year, but right-wing powerbroker and trade minister Don Farrell hasn’t given up, and recently again dropped to one of his favourite journalists that he feels he can convince the Americans — presumably as part of a deal to shore up AUKUS.
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It’s now clear that the “double down” strategy extends to critical minerals too, because the government thinks it has found a winning plan: hand equity stakes in our critical minerals to the US.
After all, Trump has seized a stake in US chip manufacturer Intel, has demanded and got a guaranteed revenue share from Nvidia’s sale of chips to China, and taken a “golden share” in US Steel after its sale to Nippon Steel, while brokering the sale of part of TikTok to an alliance of friendly business interests. It is straight crony capitalism — a view shared right across the political spectrum in the United States. And, evidently, Albanese and Farrell want in on the action.
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Bloomberg reported yesterday that Trump’s regime is looking for mechanisms to secure equity stakes in Australian mining companies, a view conveyed to them at a forum hosted by Ambassador Kevin Rudd. In July, the Pentagon took a stake in US rare earth magnet producer MP Materials in exchange for an offtake agreement. Albanese and Farrell were trying to get the Americans interested in a critical minerals offtake agreement in their failed effort earlier this year.
Separately, Reuters reported that one of the issues discussed by Albanese with Keir Starmer during his UK trip was the UK taking an equity stake in the critical minerals reserve established by Albanese with a billion-dollar commitment earlier this year, in exchange for an offtake agreement. According to Reuters, France is also interested in a stake, and potentially Canada as well.
So, either via a stake in the critical minerals reserve, or direct seizure of stakes in Australian mining companies, other governments would have direct control of access to Australian resources.
The UK, France and Canada are all allies, and all are members of the diminishing number of civilized Western nations that act according to international norms and share Australian values and interests. But the risk is that, like America, they stop being such countries. What if in 2030, Nigel Farage and the Reform Party take power in the UK? Reform is directly linked to the Putin regime: one of its MPs has just admitted to taking bribes from Russian interests. A pro-Russia UK government with a MAGA-style agenda would have a strategic stake in Australia’s critical minerals.
Ditto France. What if Marine Le Pen overcomes her legal challenges and succeeds Emmanuel Macron in 2027? Le Pen has close ties with Putin. Again, Australia would risk handing access to our critical minerals to a pro-Russian government. Don’t think the UK and France could go down a pro-Russia path? Is that any more improbable than the US becoming a fascist autocracy in a space of months?
The risk is all the greater with Trump, given the US already wields considerable power over Australia via our status as loyal vassal state. Trump would use any stakes in Australian companies blithely handed to him by Albanese and Farrell purely in US interests, which would mean minimising the return to Australia for its minerals and maximising the returns to US corporations and his own government.
Again, don’t think our government would be dumb enough to let foreigners abuse our resources in their own interests? That’s exactly what it’s doing with offshore gas, allowing multinational corporations as well as local firms like Woodside to make enormous profits from gas exports while collecting minimal amounts of Petroleum Resource Rent Tax.
Worse, it would be handing a stake in an enormously important strategic asset to a regime with interests very much opposed to our own. The Trump administration is not merely bitterly opposed to climate action, it is attempting to force other countries to reverse their commitments to renewables and take US fossil fuels instead. Why would it not use its Albanese-gifted access to critical mineral supply chains to disrupt renewable technology production to advantage US fossil fuel interests?
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Don’t think it can happen? Trump is shutting down renewables projects across the US — so much so that even fossil fuel companies are worried.
And will the deals Albanese and Farrell broker be submitted to the Foreign Investment Review Board? In May 2024 the government cracked down on foreign investment in critical minerals and later kicked Chinese companies out of Northern Minerals. Treasurer Jim Chalmers sued one of them in June. So how on earth would allowing other foreign governments to take equity stakes in anything to do with critical minerals be consistent policy? Or will the board be bypassed?
One other thing: handing access to Australian critical minerals to a country like the US with interests (and values) now fundamentally opposed to those of Australia risks serious blowback if that country leverages that access in a way that harms Australia’s economic interest. One wonders how any crony capitalist deal with Trump to hand him access to our critical minerals — especially one negotiated in secret and presented as a fait accompli to parliament and the public — would sit with section 92.3 of the Criminal Code, which deals with people who recklessly prejudice Australia’s national security in collaboration with a foreign party.
Governments insist that national security involves economic relations with other countries — that’s why Bernard Collaery and Witness K could be charged with revealing the Howard government’s espionage on the Timor-Leste government. Giving access to national resources to a foreign power that is hostile to Australian interests certainly seems reckless. Or worse.
