MELBOURNE, March 14 (Reuters) - Australia will provide up to A$840 million ($550 million) for a combined rare earths mine and refinery in the north of the country, to be operated by mineral developer Arafura, Prime Minister Anthony Albanese said on Thursday.

The funding, mostly in government loans for what will be Australia's third rare earths processing plant, is expected to be matched by finance from international partners.

“We will deliver critical jobs and economic development in the heart of the Territory and the north," Albanese said in a statement.

Rare earths are used to make powerful magnets, and are an essential component in renewable energy and defence technologies. Electric vehicle motors, wind turbines, robotics and mobile phones all rely on rare earths.

China is the world's dominant producer of rare earths, and Australia and its allies are attempting to diversify the global supply chain after COVID-related snarls.

The funding includes loans of $325 million under the government's Critical Minerals Facility (CMF), A$200 million through the Northern Australia Infrastructure Facility (NAIF), up to $75 million from Export Finance Australia and a further A$30 million in grants under the Modern Manufacturing Initiative. ($1 = 1.5088 Australian dollars) (Reporting by Melanie Burton; Editing by Jacqueline Wong and Muralikumar Anantharaman)