Australian Rare Earth Developer ASM Eyes U.S. Defense Funding

Rare earths are highly magnetic, making them key to applications from smartphones to laser-guided missiles. Australia is listed as a domestic supplier for U.S. defense uses.

“The magnet supply chain is actually in a very good position, no matter which (U.S.) government is involved,” CEO Rowena Smith told Reuters.

Smith said Australian companies could access U.S. Defense Department funding through the newly established Strategic Capital Office.

“When I met with them, they ... I was very confident that they had bipartisan support,” she told Reuters on the sidelines of the International Mining and Resources Conference (IMARC) in Melbourne.

“They expect to have strong momentum this year. They asked me to come back in February to talk to them. So, whatever the outcome, we are very optimistic.”

ASM has been raising funds to finance the development of its Dubbo rare earth project in New South Wales, Australia. The company estimated at the end of 2021 that the project would cost A$1.678 billion ($1.1 billion).

ASM has received a letter of intent for a debt financing program of up to $400 million from Canada's official export credit agency, as well as a $600 million financing commitment from the U.S. Export-Import Bank.

The Pentagon recently established the Office of Strategic Capital, which allocates funds aimed at seeding investments in the supply chain of the defense industrial base.

ASM is aiming to make a final investment decision in the first half of 2026, although a study is currently underway to potentially speed up production.

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