INTERVIEW: US eyes Australia rare earths partnership amid China sourcing shift: ASM CEO

Australian Strategic Materials is in discussions with the US Department of Defense to build a rare earths alloy plant in the US under a new administration that has "doubled down" on efforts to source critical minerals outside of China, according to CEO Rowena Smith.

In March 2024, the Export-Import Bank of the US offered $600 million in conditional debt funding to ASM for the Dubbo rare earths project in New South Wales, Australia. Smith said additional support might be forthcoming as the US aims to diversify critical minerals supply chains away from China.

Trade tensions between the US and China, related retaliatory measures and growing protectionism have been casting a shadow over the critical minerals industry. China dominates the global rare earths sector in both production and technology, with state-controlled operations.

ASM has submitted two white papers to apply for "non-dilutive" equity from the US Department of Defense to fund various components of the Dubbo processing flow sheet that align with the US defense mandate, Smith told Platts, part of S&P Global Commodity Insights, in an interview in the week ended Feb. 21.

Australia-based ASM produces critical metals for advanced and clean technologies.

"When I was there [in the US] in October [2024], the Department of Defense was very strongly asking for us to put in a third white paper to request funding support to replicate the [South] Korean facility in the US," Smith said. The miner made that submission in January.

"The [US Department of Defense] is very focused on getting production in place prior to 2030," she said.

In May 2022, ASM opened its Korean Metals Plant in South Korea's Ochang province. The operation produces neodymium iron boron alloys, and future product lines will include high-purity titanium, zirconium, hafnium, and niobium.

The South Korean plant processes third-party rare earth oxides into neodymium metal and subsequently produces specialized alloy plates for use in magnet factories.

Smith said the US has alternative sources of oxide that can be metalized, serving as a feed source for the proposed US plant, as well as for Dubbo once it begins production.

There are "very, very few options" for metalizing rare earths outside of China, and the US wants to have that expertise in-country. Smith said such a plant can be built within 18 months, similar to the timeline for the South Korean plant.

Smith will travel to the US during the week ending Feb. 28 to continue talks with the US Department of Defense about the white papers, including the application for the US plant.

"The [US] Department of Defense is interested in the rare earths, but they are also extremely interested in the hafnium and niobium, which are both critical minerals as they are both difficult to source at the moment outside of China," Smith said.

"Both commodities are also increasingly relevant to the emerging semiconductor technologies. Hafnium, in particular, is used in nuclear technologies, and there are also a lot of defense applications that are very specific for hafnium. So, the [US Department of Defense] is looking at that because they know they have a real need for those products and are trying to work out how to secure these supply chains among allies."

Doubling down

There has been a strong 'Made in America' theme over the previous two years, but "what we are seeing with the new Trump administration is a doubling down on wanting to make sure that we have these supply chains domestically that are really strong that will support America's growth," said Smith.

The miner has now narrowed its options for the location of its US alloy plant to six states. Smith plans to meet with representatives from these states during her upcoming visit to the US.

"We talk about the Trump policy [facilitating domestic mining], but the states are putting in an enormous amount of incentives to bring these investments into their state, particularly around cost and access to water and power, labor costs, and access to areas that are already predeveloped, so approvals are already done," she said.

The US Department of Defense did not immediately respond to Platts' request for comment on the matter.