US seeks critical scandium supply from Rio Tinto for defence purposes

The US national stockpile will receive scandium oxide supplies from a Rio Tinto mining unit, following an agreement with the country’s Defense Logistics Agency (DLA). 

This five-year deal is valued at up to $40 million and aims to secure the critical material, according to a Reuters report.

Scandium, a rare earth element, has gained significant attention due to its critical role in Western defense and technology industries. 

This heightened focus stems from China's imposition of export controls on the metal, as China is the world's primary producer. 

Global supply chain vulnerabilities

The move has highlighted the vulnerability of global supply chains and the need for diversification to secure access to this vital resource. 

Scandium's unique properties make it indispensable in various high-tech applications, including aerospace alloys, solid oxide fuel cells, and specialised lasers, underscoring its strategic importance for advanced technological development and national security.

"Scandium, until recently, was primarily sourced from China. In late 2024, China placed export controls on scandium, which constrained the supply chain and prompted this acquisition for the National Defense Stockpile," DLA was quoted in the report as saying in a document published last week.

Within five years, the company aims to acquire 6.4 metric tons of scandium oxide. 

In the initial year, it plans to procure nearly 2 tons, which represents approximately 5% of the 40 tons of global scandium oxide production reported last year by the US Geological Survey. The existing global production capacity stands at 80 tons.

To bolster the domestic supply of scandium, the US government granted up to $10 million to Elk Creek Resources, a subsidiary of NioCorp Developments, in August.

Currently, the US government has to procure this product, vital for numerous defense systems, from foreign sources.

The document said:

Innovative production and outlook

While Rio Tinto declined to comment on commercial specifics, the company stated its active collaboration with the US government. 

This collaboration aims to identify opportunities and utilise available support to boost domestic production and fortify supply chains for the American market.

In a significant scientific breakthrough in 2020, scientists at Rio Tinto achieved a pioneering feat by developing an innovative process. 

This method enables the extraction of high-purity scandium oxide directly from the waste streams generated during titanium dioxide production. 

Crucially, this advanced technique negates the need for any additional mining activities, marking a sustainable and environmentally responsible approach to obtaining this valuable rare earth element. 

This development not only offers a more efficient way to secure a critical material but also addresses the environmental impact traditionally associated with mining operations.

Three years ago, Rio Tinto's facility in Quebec, Canada, began producing scandium oxide. The facility currently has an annual production capacity of 3 metric tons.