In a wide-ranging agreement signed on Monday, US and Australia committed a combined $3 billion to mining and processing projects, and to a price floor for critical minerals, a step long sought by Western miners. The countries will also sign off on financing that includes offtake rights.

The White House said US investments into Australia would unlock deposits of critical minerals worth $53 billion, without offering many details.

Trump said in a year they would have "so much critical mineral and rare earths that you won't know what to do with them."

"They will be worth about $2," Trump told reporters in a news conference later.

Global mining industry experts gathered at a conference in Sydney on Tuesday welcomed the news, which they said would open up investment opportunities, but they were skeptical of Trump's time horizon.

"The time frame for various projects to be ready even for 2027 would be heroic, and unachievable in the case of many projects," Barrenjoey analyst Dan Morgan told Reuters.

"In general in the rare earths industry nothing can happen quickly. I don’t think we are going to be swamped with supply growth and there’s no way we will be swamped in a year. We might have supply growth in 5-7 years," he said.

China accounts for 90 percent of the world's refining capacity for rare earths which have crucial uses in sectors such as clean energy, defense and automobiles. In a note on Monday flagging risks of supply disruptions, Goldman Sachs noted China also controls 69 percent of global rare earth mining, and 98 percent of magnet manufacturing.

While rare earths are common in the Earth's crust, China has mastered the technically difficult and environmentally-harmful refining process, comparatively cheaply.

With trade tensions and security concerns rising, the US and its Western allies have been looking to loosen China's grip. In April and May, Beijing squeezed global automakers with export curbs on a range of rare earths items and related magnets, and earlier this month expanded its export controls.

Benchmark prices in China for the most popular type of processed rare earths, NdPr oxide SMM-REO-DIO rallied by 40 percent to $88 a kilogram in August, after several years of weakness.

They have since tailed back to $71, but western world developers are calling for governments to support a higher floor price that will enable them to build production.

It's unrealistic to expect prices to drop further and the market to be swamped with supply in the short term, said Dylan Kelly, head analyst at fund Terra Capital.

"Prices right now aren’t necessarily reflective of a market dynamic that can see prices fall any further," Kelly said, adding that Monday's announcement had increased the investment allure of Australian projects.

"There’s lot out there to sink our teeth into that could really shift the gear on a number of different projects for us."

However, there were some clear winners from the announcement.

The US Export-Import Bank (EXIM) sent seven Letters of Interest (LOIs) totaling more than $2.2 billion to miners in Australia, including Arafura Rare Earths.

Arafura CEO Daryl Cuzzubbo said earlier this month that it needs $800 million in equity funding to develop its Nolans project in Western Australia, and he expected about 60 percent of that would come from cornerstone investors by the end of the year.

"It's good for us, and it's good for our industry counterparts," said Arafura CFO Peter Sherrington, speaking at the Imarc mining event. "The big thing it does is derisk raising money from an equity perspective."

Full funding is expected by the end of the first quarter next year and Arafura aims to start production in 2029, Cuzzubbo earlier told Reuters.

Arafura's biggest shareholder is Australian mining magnate Gina Rinehart, a vocal Trump supporter who attended the president’s inauguration party in Mar-a-Lago in January.

However, new critical minerals projects will not be viable without a change in buying priorities from customers, said Syrah Resources CEO Shaun Verner.

"I would say that if customers don't cure their addiction to lowest possible cost supply from China, then there will be no inducement of projects anywhere else."