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Donald Trump’s administration has provided a major funding boost to Australia’s hopes of unlocking non-Chinese supplies of a rare earth used in energy and defence applications with a $400mn loan to a Robert Friedland-backed company.
Shares in Sunrise Energy, which is building a scandium mine about 360km (225 miles) west of Sydney, surged 18 per cent after the conditional US funding was announced on Monday. The rise capped a huge jump in the value of the Sydney-listed company in the past year to A$3.2bn (US$2.2bn).
The Office of Strategic Capital, part of the US Department of Defense, said the loan was conditional on the Australian company meeting specific legal and technical requirements and included a right of first offer on Sunrise’s output.
It is one of the most significant moves in the growing partnership between Australia’s mining industry and Washington, which has indicated that a supply line of non-Chinese rare earths and other critical minerals is essential for US defence and industrial companies.
The Syerston project is being developed by Sunrise in Parkes, a town in western New South Wales best known for one of the world’s largest Elvis Presley festivals and for the large radio telescope used to help broadcast the first moon landing in 1969 around the world.
The growth potential of a scandium mine — with production due to begin in the second half of 2028 — could boost the town’s growth prospects. Rio Tinto owns another prospect nearby that is part of its titanium division, which has been put up for review.
Scandium is used for a variety of applications, ranging from the manufacture of golf clubs and racing bike frames to a tracing agent used in oil refineries and ultra-thin coatings on semiconductors used in smartphones.
One of 17 metallic elements called rare earths, scandium is mainly used as an alloy to strengthen aluminium for automotive and aerospace components and is a critical component for chips used in smartphones to enable radio-frequency selection.
It is also used in hydrogen fuel cell technology, as the metal improves electrical conductivity.
Friedland, the co-chair and biggest investor in Sunrise, said that the loan represented “a landmark moment” for the Australian mining industry and thanked Trump and the US defence department.
“The world has entered an era in which access to critical minerals will shape industrial strength, technology leadership and national security. Scandium is one of the clearest examples, supporting the technologies, industries and defence capabilities that will shape the coming decades,” he said in a statement.
Sunrise also said it was preparing to list on a US securities exchange in a move that would require shareholder, court and regulatory approvals.
