Defense Technology News – The Department of War's Office of Strategic Capital has announced a conditional loan commitment worth $400 million to Sunrise Energy Metals Limited, an Australian mining company, to help build out a domestic scandium supply chain aligned with U.S. and allied interests. The deal marks one of the Pentagon's most significant recent moves to secure a critical mineral that plays an increasingly important role in both defense manufacturing and advanced commercial technology.
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Why Scandium Matters
Scandium is a rare metal found in small concentrations throughout the Earth's crust, but it is rarely mined as a primary resource. Instead, it's typically recovered as a byproduct of other industrial or mineral extraction processes, which has left global supply thin and heavily concentrated in the hands of a small number of countries. According to the announcement, no primary scandium mine currently exists anywhere in the world, and foreign producers account for roughly 80% of global mining output and nearly all of the world's scandium processing capacity.
The Sunrise Energy Metals Deal
Sunrise Energy Metals, publicly listed on the Australian Securities Exchange, owns the Syerston Scandium Project located in New South Wales, Australia — a site the company describes as home to a high-grade scandium deposit. With the Pentagon's conditional financing combined with additional private capital, Sunrise plans to build out a complete scandium value chain, starting with primary mining at Syerston and extending into metallization and additive manufacturing capabilities.
As part of the arrangement, the Department of War will receive a right of first offer on Sunrise's future output, positioning the material to directly support U.S. companies, including firms operating within the broader defense industrial base.
Officials Frame the Deal as a National Security Priority
David A. Lorch, who leads the Office of Strategic Capital and serves as senior advisor to the Deputy Secretary of War, described securing critical mineral supply chains as a top national security priority under the current administration. He characterized the transaction — valued near $1 billion when combining public and private capital — as a meaningful step toward reducing foreign dependency on scandium and expanding its use across both defense and commercial applications.
Other officials at the Office of Strategic Capital echoed that framing. Asad Akram, who co-heads the office's critical minerals portfolio, pointed to scandium's dual relevance for national and economic security, noting its potential to support both computing infrastructure and advanced fighter aircraft capabilities. Peter B. Zuckerman, a senior managing director at the office, described the commitment as a step toward building a fully U.S.-aligned scandium supply chain and said additional related deals are currently under active review.
Building a Fully Domestic-Aligned Supply Chain
John Gallagher, who also co-leads the office's critical minerals efforts, explained that the goal extends beyond simply financing a mine. By connecting primary extraction directly to onshore metallization capabilities in the U.S., officials say the arrangement is designed to keep the entire production chain — from raw mineral to finished material — under allied control, reducing exposure to potential supply disruptions from geopolitical rivals.
Emil Michael, Under Secretary of War for Research and Engineering, tied the deal to a broader push from military leadership to secure critical mineral supply chains using resources allocated by Congress, describing the effort as a direct response to warfighter needs.
What Happens Next
The agreement is described as conditional, meaning Sunrise still needs to satisfy a series of standard financial, legal, and technical requirements before the deal reaches final close. It isn't a standalone effort, either — officials say it fits into a larger pattern of activity from the Office of Strategic Capital, which has committed more than $8.4 billion in debt financing during fiscal year 2026 alone and helped mobilize a combined $17.8 billion in public and private capital to strengthen the American industrial base.
Part of a Larger Push on Critical Minerals
This deal reflects a broader trend across the defense sector: growing urgency around securing raw materials that feed directly into advanced weapons systems, semiconductors, and next-generation manufacturing. As demand grows for materials like scandium — used in aerospace alloys and other high-performance applications — officials say more announcements involving critical mineral partnerships are likely in the pipeline as the Pentagon works to reduce reliance on foreign-controlled supply chains.