The United States has pledged up to $400 million to help develop a scandium mine in a remote part of Australia, in a move aimed at reducing Western dependence on China for the critical mineral.
The Pentagon announced the conditional loan commitment to Sunrise Energy Metals on Saturday during a meeting between US President Donald Trump and mining executives in Washington.
The funding will support the proposed Syerston mine near Fifield in New South Wales, which Sunrise says could become the world`s first primary mine dedicated to producing scandium.
Scandium is used in defence equipment, aircraft and data centre technologies.
The mineral is rarely mined on its own and is usually recovered as a byproduct of other mining operations.
China currently dominates the global supply and processing of scandium.
Its decision to restrict exports of the mineral for defence-related products last year pushed the United States and its allies to look for alternative sources.
Sunrise chairman Robert Friedland said the company wanted the Syerston project to become an important source of scandium for Western countries.
The proposed mine is located about 450 kilometres west of Sydney.
The New South Wales government says the state contains some of the world`s highest concentrations of scandium.
The Pentagon said the project would help create a supply chain for scandium stretching from mining to finished products within Western countries.
Australia and the United States have also been working to strengthen cooperation on critical minerals.
Trump and Australian Prime Minister Anthony Albanese signed an agreement in October under which both countries committed to investing $1 billion each in critical-mineral projects.
Sunrise also has an agreement with US defence and aerospace company Lockheed Martin to supply it with 25 percent of the mine`s scandium production during the first five years of operation.
Friedland said Sunrise would provide further details about the project in an announcement to the Australian Securities Exchange on Monday.
