The two leaders, meeting at the White House, will also commit the Australian Space Agency to work with NASA on plans to return to the Moon by 2024 and eventually a mission to Mars.
An Australian flag is seen with a US flag on the Eisenhower Building for Prime Minister Scott Morrison's state visit.
A senior US administration official said the plan involving critical minerals, which is expected to include the formation of a working group, would be one of the most significant outcomes of what is the first state visit to the USA by an Australian Prime Minister since John Howard in 2006.
China controls at least 80 per cent of the global trade in rare earths which, along with other critical minerals such as lithium, copper and cobalt, are a vital part of the defence supply chain. Rare earths are used in everything from weapons guidance systems to improving the durability of electronics used in the field."We share a concern about making sure that our supply of rare earths and critical minerals are secure. That's something that both countries have a very, very pronounced interest in,'' the Trump Administration officialsaid.
"We (are) looking at different ways in which we can pool our expertise and our resources to make sure that there's a stable and secure global market that's not easily disrupted by shocks and outside influences."
The Australian Financial Review reported in June that Australia, the US and other like-minded allies were working on a rare earths strategy. The US State Department has been working with Canada and Australia to better understand what critical minerals each country has, how these can be developed and reliance on China reduced.
One company that could benefit is junior miner Arafura Resources, which is seeking funding for its $1.1 billion rare earths project outside Alice Springs.
Another is rare earths miner Lynas Corporation, which has an operation in Western Australia and posted a surge in production and profit in 2018-19 following concerns about the reliability of Chinese supply.
Mr Morrison arrived in Washington DC, Friday morning, Australian time for a visit he said was not so much about reflecting on the strength of the century-old alliance with the US, but putting it on a sound footing for the next 100 years.
Prime Minister Scott Morrison and Jenny Morrison receive a ceremonial welcome on arrival at Joint Base Andrews.Alex Ellinghausen
RMX Price at posting:
0.7¢ Sentiment: None Disclosure: Held
(20min delay)