Australian Strategic Materials receives $923m funding from US EXIM for Dubbo rare earths project

Australian Strategic Materials (ASX: ASM) has received substantial US government backing for its Dubbo rare earths and critical minerals project in central-western New South Wales.

Australian Strategic has received a non-binding and conditional Letter of Interest (LoI) from the Export-Import Bank of the United States (US EXIM) to provide a debt funding package of up to $923 million for the construction and execution phase of the rare earths and critical minerals at the Dubbo project.

EXIM is the official export credit agency of the US federal government.

Managing director and chief executive officer Rowena Smith said the potential new funding opportunity for Dubbo has been assisted by strong support from the Australian government and in particular federal resources minister Madeleine Smith, who recently visited the US to talk up Australia’s critical minerals credentials.

She also praised the actions of the Australia-US Taskforce on Critical Minerals, which has strengthened a partnership between the two nations in the development of secure, sustainable critical mineral supply chains.

US government policy

As an agency of the US government, one of EXIM’s aims is to help strengthen the critical minerals supply chain into north America while backing US exporters in obtaining new markets for their products.

Its proposed support for Dubbo is linked to the potential for US equipment, goods and services to be supplied in the construction phase of the project.

The LoI is subject to completion of due diligence by US EXIM and Australian Strategic obtaining all necessary approvals for the Dubbo project.

Ms Smith said the EXIM agreement represents a material step in Australian Strategic’s project funding strategy and is recognition of the strong engagement the company has experienced from government, investors and industry groups in North America.

Globally significant project

“The Dubbo project is a globally significant rare earths and critical minerals asset, well positioned to support the joint objective[s] of Australia and the US to develop and expand reliable, responsible and secure global access to critical minerals,” Ms Smith said.

“We are delighted to receive this letter of interest from US EXIM following extensive collaboration with multiple government and industry stakeholders in the US and look forward to building on the relationships we have established in this jurisdiction.”

US EXIM’s LoI for Dubbo’s construction phase follows Export Finance Australia’s previous conditional financial support of $200m debt funding for the project.

Ms Smith said that while the new LoI is non-binding and conditional, the potential funding support available offered by US EXIM provides a catalyst to increase customer and financing focus in North America.