The US Department of War is going to invest in rural NSW. $566 million (AUD) will be invested in the Sunrise Syerstone mine in order to extract scandium. Scandium is a rare earth element which is considered a critical mineral – it has no viable alternative and may be subject to supply chain interruptions.
Scandium is used in a range of applications including military grade aircraft, electronics and renewable energy, and when combined with aluminium is ‘lightweight, strong, corrosion and heat resistant, malleable, good conductors of electricity.’ The US has not mined scandium since 1969, and now is dependent on China for rare earth elements.
The US and China have been engaged in a trade war since 2018. Last year China restricted the export of scandium and other rare earths by requiring exporters to have a special export licence and restricting those able to trade it for dual-use (military and commercial applications).
With the potential to grind defense development and EV manufacturing to a halt, the US signed an agreement with Australia that it would invest in Australian critical minerals mines, provide project financing, provide price floor arrangements, and coordinate downstream processing and off-take agreements. Other projects include gallium in Western Australia and rare earth elements mining in the Northern Territory.
The Sunrise mine in NSW could provide the world’s first high grade primary source of scandium globally. As the US rebuilds its critical minerals capacity, there remains to be seen whether the agreement will lead to further downstream benefits for Australia.