Australian and US leaders to discuss Pacific infrastructure, critical minerals

SYDNEY (Reuters) - Australia and the United States will announce plans to cooperate on critical minerals and bolster Pacific Islands infrastructure when Prime Minister Anthony Albanese visits Washington this week, a senior Biden administration official said.

Albanese's White House schedule begins Tuesday, Washington time, and is focused on broadening Australia's security alliance with the United States into an economic and technology partnership, Albanese told reporters in Washington on Monday.

The two leaders will flesh out details of further cyber security cooperation, in addition to a $5 billion Microsoft investment in Australia, the Biden administration official said.

Several announcements, including the infrastructure project, will showcase U.S.-Australia cooperation in the Pacific.

"This is an absolute imperative for both of these leaders ... that we do stay deeply focused on the Pacific Islands," the official, Mira Rapp-Hooper, special assistant to the president and senior director for East Asia and Oceania on the National Security Council, told Reuters.

"The prime minister's visit this week is an important reminder that our president, our commander-in-chief, is very much able to keep his steady gaze on the Indo-Pacific and our long-term interest there as he manages the crisis at hand," she added, referring to the world's focus on the Middle East.

A critical minerals task force to boost private investment in Australia's rare earths industry and reduce global reliance on China will be the centrepiece of Albanese's schedule, with Australia committing another A$2 billion ($1.27 billion) in financing to "de-risk" private sector involvement.

Albanese said on Tuesday Australia would "help to build supply chains with the United States and support our shared clean energy, manufacturing and defence ambitions".

"We're in a strong position, as the world's largest supplier of lithium, for example, a significant supply of cobalt, vanadium, copper, nickel. The minerals that will power the globe in the 21st century are things that Australia has significant amounts of," he earlier told reporters in Washington.

No announcements on critical minerals agreements with the U.S. Department of Defense are expected this week. Australian analysts have said that the U.S. auto and defence sectors are large buyers of rare earths and that a long-term sales contract could reduce investor risk in developing Australian processing.

Albanese will visit China, Australia's largest trade partner and biggest buyer of its iron ore, on Nov. 4.

Washington this year signed a defence cooperation agreement with Papua New Guinea, north of Australia, and opened USAID offices in the region after China struck a security pact with the Solomon Islands.

Albanese and Biden will also discuss the South China Sea, where tensions between China and the Philippines are rising.

He said he would meet with U.S. lawmakers every day he is in Washington to highlight the need for the AUKUS defence technology partnership with the United States and Britain. The partnership aims to sell Australia nuclear-powered submarines and build a new class of submarine in Australia by 2040.

The pact faces hurdles in the U.S. Congress, and from U.S. export controls that could slow its implementation. On Friday, the Biden administration submitted a supplementary budget request to Congress that includes measures to support U.S. commitments under AUKUS.