Kathmandu— The United States Department of Defense has announced a $400 million conditional loan commitment to an Australian mining firm to develop the world's first primary mine for scandium. The move, announced Friday following a meeting between President Donald Trump and mining executives in Washington, seeks to secure a supply of the critical rare earth element and ensure Western alignment from the mine to the finished product.

Securing Critical Mineral Supplies

The proposed Syerston Scandium Project, located in Fifield, New South Wales, is intended to become a cornerstone of the Western scandium supply, according to a statement from Sunrise Energy Metals. The project aims to provide a critical metal for advanced technologies, including aerospace, 5G/6G telecommunications, and data centers.

Scandium is highly valued for its ability to strengthen aluminum while remaining flexible and resistant to heat and corrosion. While it is typically sourced as a byproduct of other mining operations, this new project would represent the first primary mine dedicated to the element.

Geopolitical Competition and Defense Needs

The investment comes as China, which currently dominates the global supply and processing of scandium, restricted exports of the metal for defense products last year. This restriction has prompted the United States to seek new, reliable suppliers to bolster national security.

In a related strategic move, President Trump and Australian Prime Minister Anthony Albanese signed a critical minerals agreement in October aimed at countering China, with both nations pledging $1 billion toward various projects.

Industrial and Defense Partnerships

The project has already attracted significant industrial interest. Sunrise Energy Metals struck a deal last year with Lockheed Martin to sell 25 percent of the mine's scandium output to the defense and aerospace manufacturer for the first five years of operation.

This initiative is part of a broader US industrial policy. On Friday, Trump stated that the federal government would invest $3 billion across multiple critical minerals and battery projects to increase domestic production and enhance national security.

The $400 million commitment remains conditional as the project moves toward development.

(With inputs from Al Jazeera)

Originally published on abcnews.com.np.