Friedland-backed scandium miner enters supply deal with Lockheed Martin

Robert Friedland-backed Sunrise Energy Metals (ASX: SRL) could become a long-term supplier of scandium for Lockheed Martin under the recently signed Australia-U.S. critical minerals pact, the company announced late on Thursday.

The Melbourne-headquartered Sunrise has entered a partnership agreement with Lockheed Martin that grants the defense and aerospace manufacturer an option to buy up to a quarter (around 15 tonnes) of the annual scandium production from its Syerston project, the miner said in a release. 

The mineral is vital for semiconductors that power mobile communications, aerospace and automotive applications. The U.S. accounts for about 90% of overall demand, but rival China controls most of the supply, making the mineral easily exposed to supply chain disruptions.

“We are pleased to be working with Lockheed Martin on this important initiative, one which underscores the importance of the U.S-Australia critical minerals pact,” Ivanhoe Mines founder Friedland, who serves as co-chair of Sunrise, said in the release. 

Shares in Sunrise Energy Metals gained 5.9% to close at A$5.03 apiece in Sydney on Friday, valuing the company at A$621 million (US$405 million).

High-grade deposit

“It is encouraging to see new applications emerging for scandium in both civilian and defence markets,” Sam Riggall, Sunrise’s managing director, said. “While global scandium trade is still small, latent demand is potentially enormous, provided customers have clear line of sight to supply options that are diversified, low-cost and scalable.”

The company hails its Syerston project, located about 450 km west of Sydney in New South Wales, as one of the world’s largest and highest-grade deposits of scandium. A resource update released last month showed it has nearly 46 million measured and indicated tonnes grading 414 parts per million scandium.

Following the resource disclosure, the Australian miner received a letter of interest from the Export-Import Bank of the United States for debt financing of up to $67 million to support the project’s development.

“This letter of interest underscores the importance of scandium to the United States, both as a critical component in wireless communications technologies, and advanced alloys supporting the civilian and defence sectors,” Friedland stated in a Sept. 16 release.