The Pentagon is investing $560 million in a rare minerals mining project in Australia's New South Wales, aiming to establish a secure supply chain for scandium, a critical element for military assets. The loan to Sunrise Energy Metals' Syerston Scandium Project, located southwest of Dubbo, marks a significant step in the U.S. effort to reduce reliance on foreign sources for this vital mineral.
Scandium is essential for the operation of advanced military equipment, including fighter jets and spacecraft. Previously, the United States has relied on Russia, China, and Ukraine for its scandium supply, having not mined the mineral domestically since 1969. The Syerston project is described as the world's first primary source of mine-able, high-grade scandium.
President Donald Trump announced the loan at a roundtable with mining executives at the U.S. State Department, emphasizing the project's global significance. Sunrise Energy Metals stated the project aims to deliver the world's first primary source of high-grade scandium. The company's chief executive, Sam Riggall, previously valued the project, which is backed by mining billionaire Robert Friedland, at $12 billion USD.
This investment follows a critical minerals deal signed last year between U.S. President Donald Trump and Australian Prime Minister Anthony Albanese. Under this agreement, both nations committed to providing at least $1 billion USD for each other's critical minerals projects. Australia also announced plans to establish a $1.2 billion reserve of critical minerals, including lithium, cobalt, and graphite.
Australian Resources Minister Madeline King called the Pentagon's loan a "significant vote of confidence" in Australia's rare minerals production capacity. She highlighted that secure end-to-end supply chains for critical minerals cannot be created by a single country. King noted that the Syerston scandium project holds the world's largest and highest-grade known scandium resource, with applications in aerospace, defense, and clean energy.
The Pentagon's Office of Strategic Capital indicated that the scandium project would bolster "warfighting capabilities as well as other strategically important economic sectors." The U.S. Department of Defense stated the loan would aid in building a "complete, U.S.-aligned value chain from mine to finished metal."
Production at the Syerston Project is slated to begin in the first half of 2028, with an anticipated initial capacity of 60 tonnes of scandium oxide per year. U.S. defense contractor Lockheed Martin has also secured an option to purchase up to 15 tonnes of scandium oxide from the project over five years.
During a roundtable event, President Trump asserted that the U.S. is reclaiming its position as the "minerals superpower of the world." He stated that critical minerals are foundational to American strength, powering everything from advanced weaponry to automobiles, and expressed a desire for these products to be mined, refined, and manufactured within the USA. Commerce Secretary Howard Lutnick added that the objective is to ensure the United States, rather than adversaries, controls the supply chains for power and critical minerals.