The Department of War’s Office of Strategic Capital (OSC) announced Friday a $400 million conditional loan commitment to Sunrise Energy Metals (ASX: SRL) to build out the company’s scandium operations in New South Wales, Australia.
The company is backed by mining billionaire Robert Friedland, who said the Syerston project “will be the world’s first source of primary mine supply for scandium end-users”.
Scandium is currently harvested through byproducts of other industrial or resource extraction processes. No primary mine-source scandium supply exists globally, and foreign competitors dominate the supply side, accounting for approximately 80% of global mining production and nearly 100% of scandium processing.
With these funds, alongside private capital, Sunrise said it will develop a full scandium value chain, beginning with its primary mining operations at Syerston. Sunrise said it will build metallization and additive layer manufacturing capabilities to ensure Western alignment from mine to finished product.
The financing will provide the Department with a right of first offer on Sunrise’s output, and the scandium produced by Sunrise would support the demand of US companies, including defense industrial base companies.
“The contemplated Sunrise transaction marks a significant step in establishing supply chain resiliency for an increasingly critical mineral. This nearly $1 billion deal, bringing together public and private capital, would help address foreign dependencies in scandium supply and facilitate scandium’s use in critical defense and commercial applications,” said David A. Lorch, Director of the Office of Strategic Capital David A. Lorch said in a news release.
Claims of a China-free scandium supply chain are also being tested in the private sector. San Jose-based Bloom Energy is the West’s largest consumer of scandium oxide, using an estimated 30 tonnes in 2025—roughly half of global consumption—according to short-seller Hunterbrook Media.
On July 8, Hunterbrook alleged that Chinese scandium oxide was still reaching Bloom through Thailand, Japan, and South Korea. In a July 9 filing, Bloom described the report’s financial claims as false and misleading and rejected its conclusions about the company’s scandium sourcing.
The USGS estimates that global production totalled about 80 tonnes in 2025. Meanwhile, Sunrise Energy Metals’ Syerston project in New South Wales, designed to produce 60 tonnes annually and one of several proposed non-Chinese sources, has yet to begin construction.
