A US Department of Defense subsidiary has provided a $400 million conditional loan to Australia’s Sunrise Energy to develop a major scandium mine in New South Wales.
As reported by the Financial Times on August 10, the move is aimed at creating non-Chinese supply lines for critical minerals essential to US defense and industrial needs, reducing dependence on Chinese rare earths. Following the announcement, Sunrise’s shares surged 18%.
According to reports, the US Department of Defense’s Office of Strategic Capital announced this Monday that it has provided the conditional loan to Australian rare earth developer Sunrise Energy. The loan requires Sunrise to meet specific legal and technical milestones and grants the US priority purchasing rights over future production from the project.
In its statement, the US side emphasized that securing non-Chinese sources of rare earths and other critical minerals is strategically vital to the supply chain security of American defense and industrial companies. This represents one of the most substantial steps yet in the deepening mining partnership between the US and Australia.
Sunrise Energy is currently building the Syerston scandium project near Parkes, about 360 kilometers west of Sydney, with production slated to begin in the second half of 2028. The company’s shares listed on the Sydney exchange jumped 18% on Monday, and its market value has climbed to A$3.2 billion (approximately US$2.2 billion) over the past year.
Scandium is one of the 17 rare earth metals, and despite its relatively small usage, it plays a critical role. It is primarily used as a strengthening agent in aluminum alloys for aerospace and automotive components, serves as a core chip material in smartphones for selecting radio frequency signals, and has unique applications in hydrogen fuel cells, oil refining tracers, and ultra-thin semiconductor coatings.
Sunrise’s co-chairman and largest investor, mining magnate Robert Friedland, hailed the loan as a “milestone moment” for Australian mining and thanked the Trump administration and the US Department of Defense for their support.
“The world has entered an era where critical minerals determine industrial power, technological leadership, and national security, and scandium is the clearest example,” he stated.
Sunrise co-chairman Robert Friedland calls this a milestone moment
The town of Parkes, where the project is located, is known for its Elvis Festival and a large radio telescope that once broadcast the 1969 moon landing. Global mining giant Rio Tinto has a titanium project in the adjacent area, currently under strategic review.
Additionally, Sunrise has revealed plans for a secondary listing on a US stock exchange, subject to shareholder, court, and regulatory approvals.
