Japan and Australia deepen energy and critical minerals cooperation amid oil crisis
Japan and Australia signed a series of agreements on critical minerals and energy cooperation during a bilateral summit in Canberra, as both countries move to secure supply chains under mounting pressure from global oil market instability linked to tensions in the Middle East.
Japanese Prime Minister Sanae Takaichi and Australian Prime Minister Anthony Albanese endorsed a joint declaration placing critical minerals at the center of their economic and security partnership. The agreement commits both governments to coordinate investments in strategic projects to reduce supply chain vulnerabilities. Priority materials include gallium, nickel, graphite, rare earth elements and fluorite, all essential for advanced manufacturing, energy transition technologies and defense systems.
Australia pledged support of up to 1.3 billion dollars through its Critical Minerals Facility and Export Finance Australia to back projects involving Japanese partners. The two sides also agreed to fast track six major mining developments, including rare earth and nickel projects, aimed at boosting production capacity and reducing reliance on concentrated global suppliers. Officials expect the initiative to attract further investment into Australia’s mining sector and expand domestic industrial capabilities.
The agreements come as global oil supply remains strained due to instability in the Middle East. Japan relies on the region for about 95 percent of its crude oil imports and has been drawing on strategic reserves since March to stabilize supply. The pressure has reinforced Tokyo’s push to diversify energy sources and strengthen partnerships with resource-rich allies.
Energy interdependence between the two countries remains significant. Australia supplies around 40 percent of Japan’s liquefied natural gas imports and 70 percent of its coal imports, while Japan provides roughly 7 percent of Australia’s diesel supply. Leaders adopted five official documents during the summit, including a joint declaration on economic security cooperation covering energy, rare earths and food supply chains.
The meeting builds on a broader expansion of bilateral ties in recent weeks. In April, the two countries finalized a defense agreement worth 10 billion Australian dollars for Mitsubishi Heavy Industries to construct Mogami-class frigates for the Australian navy, with delivery of the first vessel expected by 2029. The visit also marks the 50th anniversary of the foundational treaty of friendship and cooperation between Japan and Australia.
Takaichi’s trip marks her first official visit to Australia since taking office in October 2025 and follows a regional tour that included Vietnam. Both governments frame the deepening partnership as a long-term effort to build more resilient and stable supply chains across critical sectors.
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