Pentagon seeks to fund Aussie, British 'strategic' mining facilities

WASHINGTON • The US Department of Defence has asked Congress to let it fund facilities in Britain and Australia that process strategic minerals used to make electric vehicles and weapons, calling the proposal crucial to national defence.

The request to alter the Cold War-era Defence Production Act (DPA) came as part of the Pentagon's recommendations to Congress on how to write the upcoming US military funding Bill, known as the National Defence Authorisation Act.

Congress may reject or accept the proposed changes when it finalises the Bill later this year.

The US is trying harder to reduce its dependence on China for lithium, rare earths and other minerals used to make a range of technologies.

Existing law bars DPA funds from being used to dig new mines, but they can be used for processing equipment, feasibility studies and upgrades to existing facilities.

Currently, only facilities in the United States and Canada are eligible for DPA funding.

Adding Australia and Britain, the Pentagon said, would "allow the US government to leverage the resources of its closest allies to enrich US manufacturing and industrial base capabilities as well as increase the nation's advantage in an environment of great competition".

Relying only on domestic or Canadian sources, the Pentagon said, "unnecessarily constrains" the DPA programme's ability to "ensure a robust industrial base".

Britain refines nickel and has several proposed processing facilities for lithium and rare earths. Australia has mining and processing facilities for a range of minerals, including iron ore, lithium, copper and rare earths, a group of 17 metals used to make magnets that turn electricity into motion.

The Pentagon last year awarded a DPA grant worth US$30.4 million (S$42.4 million) to Australia-based Lynas Rare Earths to build a processing facility in Texas with privately held Blue Line.

Last month, Lynas chief executive Amanda Lacaze complained that those funds have yet to be dispersed, citing ongoing negotiations over protection of her company's intellectual property.

The Pentagon has also granted at least US$45 million to MP Materials, which controls the only US rare earth mine but depends on China for processing. The funds are to help MP's efforts to resume US processing of those strategic minerals.

REUTERS