August 8, 2026 — 9:02amWashington: The Pentagon will invest more than half a billion dollars in a “world-first” mining project in central western NSW that produces scandium, a rare critical mineral used in fighter jets, spacecraft and other tools of war.The $US400 million ($560 million) loan is intended to expand production at Sunrise Energy Metals’ Syerston Scandium Project near Fifield, south-west of Dubbo, as the US seeks to urgently diversify its supply chain for rare earths.Sunrise Energy Metals’ Syerston scandium project in NSW.Last year, Sunrise announced a deal for US weapons contractor Lockheed Martin to buy up to 15 tonnes of scandium oxide over five years. The move came just days after Prime Minister Anthony Albanese and US President Donald Trump signed a critical minerals deal in Washington.Scandium – used to strengthen aluminium – 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 said foreign competitors accounted for about 80 per cent of global scandium production and nearly 100 per cent of processing.Trump announced the Pentagon’s investment on Friday (Washington time) during a televised roundtable with mining executives at the US State Department. The White House described the Sunrise venture as “the world’s first primary scandium mine”.The US Department of Defence said the conditional loan from its Office of Strategic Capital would build a “complete, US-aligned value chain from mine to finished metal”, securing a vital supply of scandium for the US defence and commercial industrial base.Commerce Secretary Howard Lutnick said: “We’re going to make sure the United States – not our adversaries – controls the supply chains of power and critical minerals.”Representatives of Australian mining giants BHP and Rio Tinto, who have proposed and planned an underground copper mine in Arizona called Resolution Copper, also attended Friday’s roundtable. When realised, it is forecast to meet about a quarter of US copper demand.“Mr President, you have brought mining back to America single-handedly,” said Resolution Copper president Vicky Peacey at the roundtable. “We started permitting in 2005 … we finally got it over the line earlier this year.”President Donald Trump holds a solid gold replica of a deep sea nodule he was gifted during a roundtable on American mining on Friday.AP Photo/Allison RobbertBHP’s North America president Jessica Farrell and vice president for international affairs Dominic Perrottet – the former NSW premier – also attended.Albanese announced last year that Australia would create a $1.2 billion strategic reserve of critical minerals to purchase and hold minerals such as lithium, rare earths, nickel, cobalt and graphite via special agreements with local producers.The deal signed by Albanese and Trump last October set out that the countries would provide at least $US1 billion for critical minerals projects in each country.According to a federal government fact sheet, NSW has the highest concentration of scandium in the world. Those deposits have rapidly come to the interest of the US government.Resolution Copper president and general manager Vicky Peacey (far left) with US Interior Secretary Doug Burgum, Trump, Secretary of State Marco Rubio and Commerce Secretary Howard Lutnick.AP Photo/Allison RobbertSunrise Energy Metals secured a $US67 million debt financing letter of interest from the US Export-Import Bank last year.The Syerston project is also benefiting from a program unveiled by the NSW government last month that allows it to defer royalty payments for five years.“The Syerston Scandium Project has been identified as a project of strategic importance under the US-Australia critical minerals partnership,” the government said. “This support further reinforces the strategic necessity of bringing Syerston online as rapidly as possible.”Another company, the Canada-listed, Nevada-headquartered Scandium International Mining Corp, is also developing a scandium mine near Nyngan, NSW and a nearby scandium exploration site known as Honeybugle.With ReutersGet a note directly from our foreign correspondents on what’s making headlines around the world. Sign up for our weekly What in the World newsletter.From our partners