The Australian government’s decision to grant U.S. aluminium giant Alcoa an exemption to continue clearing native jarrah forest in Western Australia was influenced in part by a landmark critical minerals agreement with the United States, according to a newly released federal document.

The statement of reasons from Environment Minister Murray Watt accompanying an enforceable penalty order reveals that the exemption was justified on grounds of supporting a gallium project tied to the broader bilateral minerals framework, which has become central to allied efforts to secure supply chains for defence and clean-energy technologies.

The exemption allows Alcoa to continue limited clearing operations in the Northern Jarrah Forest for an additional eighteen months while a strategic environmental assessment of its Huntly and Willowdale bauxite mining expansion proposals is completed.

The document shows that, despite longstanding warnings from the federal environment department that Alcoa’s activities south of Perth had exceeded legal exemptions under Australia’s Environment Protection and Biodiversity Conservation Act, compliance action was delayed and only recent statutory changes narrowed continuous-use exemptions.

The national interest exemption was granted to reinforce commitments to the critical minerals partnership and to signal Australia’s reliability as a strategic supplier within the allied framework.

Alcoa has agreed to pay a record A$55 million remediation undertaking for unlawful clearing of more than two thousand hectares of habitat for protected species between twenty-nineteen and twenty-twenty-five, the largest conservation-focused penalty of its kind.

Minister Watt emphasised that the enforceable undertaking, supported by statutory reforms designed to strengthen environmental compliance and enforcement, would fund ecological offsets, invasive-species control and research programmes for the Northern Jarrah Forest.

Alcoa’s leadership maintained that its operations pre-dated the EPBC Act and that the enforcement action resolves historical differences of interpretation regarding approvals.

The minister’s statement also highlighted the strategic importance of supplying bauxite and gallium linked to joint ventures with the United States and Japan, reflecting the bilateral critical minerals framework agreed by Prime Minister Anthony Albanese and U.S. President Donald Trump toward bolstering allied supply chains for minerals vital to advanced manufacturing and defence.

Canberra officials argue that disciplined engagement with global partners and targeted exemptions can sustain jobs and investment in Western Australia while delivering long-term strategic benefits.

Conservation groups and political opponents have vigorously challenged the exemption, arguing it prioritises corporate and foreign defence interests at the expense of unique ecosystems, endangered species and drinking water catchments that depend on the jarrah forests.

The dispute underscores enduring tensions between environmental protection and the strategic imperatives of critical minerals policy.