* Rare earths stocks help mining sub-index hit record high * AXJO hits all-time high of 9,115.20 in intraday trade * Benchmark index notches record closing high of 9,094.70 (Updates to close) By Rajasik Mukherjee and Atharva Singh Oct 21 (Reuters) – Australian shares rose to a record close on Tuesday, as critical minerals stocks drove index heavyweight miners higher after the country signed an agreement with the U.S. to bolster rare earths supply chains and counter China's dominance in the sector. The S&P/ASX 200 index climbed 0.7% to an all-time closing high of 9,094.70. It also hit a record intraday peak of 9,115.20 earlier in the session. Miners jumped as much as 2.5% to a new high as rare earths stocks rallied after a $1 billion U.S.-Australia critical minerals agreement and a $2.2 billion pledge from the U.S. Export-Import Bank. Under the deal, the two countries will jointly invest in a range of mining and processing projects across Australia to ramp up production of critical minerals. "The deal lowers the cost of capital for the entire rare earths sector… lower cost of capital helps the entire industry to advance its development ambitions," said Sam Berridge, portfolio manager and resources analyst at Perennial Value Management. China has the world's largest rare earths reserves, according to U.S. Geological Survey data, but Australia also has significant reserves. Shares of Latrobe Magnesium rose 15.4% and Alcoa's Australia-listed shares gained 7.5%. BHP rose 2.3% as the world's largest listed miner struck an upbeat note on global iron ore demand, although its first-quarter iron ore output missed estimates. South32 ended 4.5% higher after the world's biggest manganese producer reported bigger-than-expected production for the first quarter. Gold stocks rose 2.3%, with Evolution Mining up 4.4%, while financials gained 0.3% and health stocks advanced 1%. Energy and technology stocks ended flat. In New Zealand, the benchmark S&P/NZX 50 index rose 0.2% to end at 13,377.85. (Reporting by Rajasik Mukherjee & Atharva Singh in Bengaluru; Editing by Subhranshu Sahu)
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