Australian rare earths developer ASM eyes US defence funding

Australian Strategic Materials

29/10/2024 07:25

SYDNEY, Oct 29 (Reuters) - Rare earths developer
Australian Strategic Materials (ASM)  ASM.AX  sees more funds
becoming available for rare earths projects from the United
States Department of Defence even if there is a change in
administration, its CEO said on Tuesday.
    Rare earths have strong magnetic qualities which make them
key to applications from smart phones to laser guided missiles.
Australia is classified as a domestic supplier to the United
States for defence purposes.    
    "The magnet supply chain is actually in a really good
position, regardless of which (U.S.) government comes in," CEO
Rowena Smith told Reuters. 
    Smith said that Australian firms can potentially access U.S.
Department of Defence funding under the newly set up Office of
Strategic Capital. 
    "When I met with them, they were... very confident that they
had bipartisan support," she told Reuters on the sidelines of
the International Mining and Resources Conference (IMARC)
conference in Melbourne.
    "They're expecting to come out of this calendar year with
momentum. They asked me to come back February and talk to them
again. So yeah, we're feeling very optimistic of regardless of
what the outcome is," she said.
    
    CONTEXT 
    ASM has been building funds to finance the development of
its Dubbo rare earths project in Australia's New South Wales
state. It estimated in late 2021 that the project would cost
A$1.678 billion ($1.10 billion). 
    ASM has already received a letter of interest for a debt
funding package of up to $400 million from Canada's official
export credit agency and a promises for $600 million from the
U.S. Export-Import bank.
    The Pentagon's Office of Strategic Capital has recently been
set up to distribute funds that are meant to seed investment in
the defense industrial base's supply chain. 
   
    WHAT'S NEXT
    ASM is targeting a final investment decision for the first
half of 2026 although a study is underway to potentially fast
track production. 
    

($1 = 1.5223 Australian dollars)

 (Reporting by Melanie Burton; Editing by Michael Perry)
 ((melanie.burton@thomsonreuters.com Twitter: @MelanieMetals;
+613 9286 1421; Reuters Messaging:
melanie.burton.thomsonreuters.com@reuters.net))