Pentagon Seeks Congressional Funding for Mining Projects in Australia and the U.K. – Reuters

By Ernest Scheyder

The U.S. Department of Defense has requested Congress to authorize funding for facilities in the United Kingdom and Australia that process strategic minerals used in the production of electric vehicles and weapons, stating that this initiative is vital for national defense.

This proposal to amend the Defense Production Act (DPA), originally established during the Cold War, was included in the Pentagon’s recommendations for the upcoming National Defense Authorization Act, which governs U.S. military funding. Congress will have the opportunity to accept or reject these changes when finalizing the bill later this year.

The U.S. is intensifying efforts to decrease its reliance on China for critical minerals such as lithium and rare earths, essential components for various technologies. Current laws prohibit the use of DPA funds for developing new mines; however, these funds can be allocated for processing equipment, feasibility studies, and enhancements to existing facilities. At present, only facilities in the U.S. and Canada qualify for DPA funding.

In its request to Congress, the Pentagon noted that including Australia and the United Kingdom would enable the U.S. government to utilize the resources of its closest allies, thereby strengthening U.S. manufacturing and industrial capabilities while enhancing the nation’s competitive edge in a challenging global landscape.

The Pentagon expressed concerns that relying solely on domestic or Canadian resources unnecessarily limits the program’s capacity to maintain a robust industrial base.

A Pentagon representative was not immediately available for further comment. The National Mining Association, representing the U.S. mining industry, opted not to provide remarks on the matter.

Strategic Minerals Overview

The U.K. has refined nickel and is exploring several processing facilities for lithium and rare earths, while Australia operates mining and processing sites for various minerals including iron ore, lithium, and a group of 17 rare earth metals, which are crucial for manufacturing magnets that convert electricity into motion.

Last year, the Pentagon awarded a DPA grant of $30.4 million to Lynas Rare Earths Ltd., based in Australia, to develop a processing facility in Texas in collaboration with Blue Line Corp. Recently, Lynas CEO Amanda Lacaze expressed frustration over the delay in funding, attributing it to ongoing discussions regarding her company’s intellectual property protection.

Additionally, the Pentagon has provided at least $45 million to MP Materials Corp., which manages the only rare earths mine in the U.S. but relies on China for processing. The funds are intended to support MP Materials in resuming domestic processing of these essential minerals. Recently, MP stated that it has begun receiving these funds and that the Pentagon will acquire certain rights to technical data in exchange for this financial backing.