Sunrise Energy Metals' Syerston scandium project is near Fifield, about 350 kilometres north-west of Sydney. (Supplied)
The US Department of War is investing $560 million in an Australian scandium project in central western NSW in a deal that provides it with a right of first offer on the mine's output.
Scandium is a critical mineral used in the aerospace, defence and automotive sectors, and nearly all of the world's supply comes from China, Russia and Ukraine.
Sunrise Energy Metals says its Syerston project south-west of Dubbo aims to deliver "the world's first primary source of mine-able, high-grade scandium".
The Pentagon is investing more than half a billion dollars to expand an Australian critical mineral project poised to become the world's first scandium mine, US President Donald Trump has announced.
The $US400 million ($560m) loan to Sunrise Energy Metals' Syerston scandium project in central west NSW is expected to shore up America's supply of the "increasingly critical mineral" used in aerospace, defence and automotive sectors.
Scandium is already used widely for defence, aerospace and energy applications, but nearly all supply comes from China, Russia and Ukraine. The US has not mined scandium since 1969.
The Pentagon's Office of Strategic Capital (OSC) said while there was currently no primary mine-source scandium supply globally, it was harvested through by-products of other industrial or resource extraction processes.
Donald Trump's announcement was part of a slew of investments in critical minerals and battery projects. (Reuters: Evelyn Hockstein)
It said "foreign competitors" accounted for about 80 per cent of the world's mining production and nearly all scandium processing.
The OSC said the mine's production would "support warfighting capabilities" as well as "strategically important economic sectors" including data centres, semiconductors and automotives.
Under the proposed financing, the US Department of War would receive a right of first offer on the mine's output.
Sunrise Energy Metals said its project near Fifield, about 350 kilometres west north-west of Sydney, aimed to deliver "the world's first primary source of mine-able, high-grade scandium".
It is set to have an initial capacity of 60 tonnes a year of scandium oxide, starting production in the first half of 2028.
In February, the company's chief executive Sam Riggall said the project, backed by mining billionaire Robert Friedland, was expected to contribute to a US critical minerals stockpile worth $US12 billion ($16.9b).