The Pentagon is investing more than half a billion dollars to expand an Australian critical mineral project poised to become the world's first scandium mine, US President Donald Trump has announced. The $US400 million ($560m) loan to Sunrise Energy Metals' Syerston scandium project in central west NSW is expected to shore up America's supply of the "increasingly critical mineral" used in aerospace, defence and automotive sectors.Scandium 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's Office of Strategic Capital (OSC) said while there was currently no primary mine-source scandium supply globally, it was harvested through by-products of other industrial or resource extraction processes.Donald Trump's announcement was part of a slew of investments in critical minerals and battery projects. (Reuters: Evelyn Hockstein)It said "foreign competitors" accounted for about 80 per cent of the world's mining production and nearly all scandium processing.The OSC said the mine's production would "support warfighting capabilities" as well as "strategically important economic sectors" including data centres, semiconductors and automotives.Under the proposed financing, the US Department of War would receive a right of first offer on the mine's output.Sunrise Energy Metals said its project near Fifield, about 350 kilometres west north-west of Sydney, aimed to deliver "the world's first primary source of mine-able, high-grade scandium".It is set to have an initial capacity of 60 tonnes a year of scandium oxide, starting production in the first half of 2028.In February, the company's chief executive Sam Riggall said the project, backed by mining billionaire Robert Friedland, was expected to contribute to a US critical minerals stockpile worth $US12 billion ($16.9b).Last year, the company signed a five-year deal with US defence contractor Lockheed Martin granting it to buy up to 15 tonnes of scandium oxide from its Syerston project.The deal came days after Mr Trump and Anthony Albanese inked a critical minerals pact during the prime minister's visit to Washington.Resources Minister Madeleine King welcomed the decision, calling it a "significant vote of confidence" in Australia's capacity to supply the US and its partners with the critical minerals they need."The Sunrise scandium project hosts the world's largest and highest-grade known scandium resource, which has a range of vital aerospace, defence and clean energy applications," she said."No one country alone can create secure, end-to-end supply chains in critical minerals and rare earths."In working together, Australian mining companies can create more jobs and investment opportunities here at home, and more jobs and investment in the United States."Madeleine King says the Sunrise project has the world's largest and highest-grade known scandium resource. (ABC News: Kimberley Putland)OSC's senior managing director Peter B Zuckerman said the conditional loan was a "decisive step toward creating a US-aligned scandium value chain, ensuring our warfighters and manufacturers no longer depend on adversaries".Mr Trump announced the loan on Friday, local time, alongside a slew of other local investments in critical minerals and battery projects totalling $US3 billion ($4.2b).Speaking at a State Department event in Washington involving more than 200 mining executives, educators and investors, Mr Trump said the US was reclaiming its place as "the minerals superpower of the world"."Critical minerals are the raw materials of American strength that power everything from advanced weaponry to automobiles, and we want these essential products to be mined, refined and made right here in the USA," he said.The US has burned through large numbers of precision-guided missiles and air-defence interceptors during its five-month-long war against Iran.Defence officials and lawmakers have warned that replenishing some inventories could take years given existing production constraints, even as the Trump administration has disputed reports of significant shortages.ABC/Reuters