Australia's $15 billion National Reconstruction Fund will proceed with its critical minerals pipeline regardless of US plans to abandon floor-price mechanisms for strategic minerals, according to NRFC chief executive David Gall.
Last week, Trump administration officials told mining executives they wouldn't support mandated floor prices for rare earths and critical minerals—a mechanism some suppliers had pushed to underwrite investment risk. The shift comes as the White House issued a January 14 proclamation addressing US import reliance on processed critical minerals, citing vulnerabilities from AI infrastructure, data centers, and defense demand.
The policy change matters less than it appears. The US-Australia Critical Minerals Framework already commits $1 billion to joint projects, with the Trump administration emphasizing equity stakes and direct loans over price supports. The US has deployed $2.3 billion in lithium loans, $500 million in battery processing grants, and $275 million for extraction funding—all without floor prices attached.
What Australia is actually building
The NRF just announced a $75 million equity investment in Alpha HPA for high-purity alumina processing in Queensland, crowding in $150 million in private capital. The facility will produce 10,000 tonnes annually—Australia's first commercial-scale HPA operation for semiconductors and batteries.
This is the fund's model: value-added processing in sectors where China dominates supply chains. Not just digging stuff up, but creating the inputs for batteries, chips, and renewable infrastructure.
The floor-price debate, explained
Floor prices would have guaranteed minimum returns for critical minerals producers, theoretically de-risking projects against price volatility. Sounds good until you remember these projects face complex metallurgy, high capital costs, and competition from established Chinese operations with decades of optimization.
Government guarantees don't fix technical execution or market fundamentals. What works: co-investment structures that align public capital with private risk-taking. The NRF's Alpha HPA deal follows this pattern—$75 million public, $150 million private, into a company that's already raised $590 million including $320 million in debt.
What to watch
Whether the $1 billion US-Australia framework delivers projects that ship product, not just announcements. Whether Alpha HPA's 10ktpa capacity meets semiconductor industry quality standards. Whether other Australian processors can crowd in private capital at similar ratios.
The floor-price discussion was always a distraction. Projects that need guaranteed prices to work probably shouldn't be built. Projects that make economic sense will find capital—especially when sovereign funds take first-loss positions.