Australian Strategic Materials Ltd (ASX:ASM, OTC:ASMMF) is a step closer to executing the rare earths and critical minerals Dubbo Project in Central West New South Wales on receiving a Letter of Interest (LoI) from the Export-Import Bank of the United States (US EXIM) for up to US$600 million (~A$923 million) in a debt funding package.
US EXIM is the US federal government’s official export credit agency and the LoI is linked to the potential US content (equipment, goods and services) to be supplied in the construction phase of the Dubbo Project and the key strategic role the project can play in the critical minerals supply chain.
The LoI, which is subject to completion of due diligence by US EXIM and ASM obtaining all necessary approvals for the project, is in addition to a A$200 million Letter of Support previously received from Export Finance Australia (EFA).
“Globally significant asset”
“The Dubbo Project is a globally significant rare earths and critical minerals asset, well positioned to support the joint objective of Australia and the US to develop and expand reliable, responsible and secure global access to critical minerals,” said ASM managing director and CEO Rowena Smith.
Support from the US government is a catalyst to increase customer and financing focus in North America and indicates that US partnerships are beginning to play a significant role for critical minerals projects in allied nations in line with US policies.
“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,” Smith added.
Material funding step
The LoI for the project’s construction and execution phase represents a material step in ASM’s project funding strategy and recognises the strong engagement ASM has experienced from government, investors and industry groups in North America.
Through the Australia-US Taskforce on Critical Minerals, Australia and the US have continued to strengthen their partnership in the development of secure, sustainable critical mineral supply chains.
In this regard, ASM’s Dubbo Project has benefitted from the leadership of Australia’s Minister Madeleine King on the taskforce and her recent advocacy in North America on Australian critical minerals projects.
This enhanced cooperation has given access to new funding opportunities for projects capable of demonstrating strong alignment to the bilateral objectives of the two countries.
Construction ready
The Dubbo Project is a construction-ready, globally significant and long-life rare earths and critical minerals project situated to the south of the city of Dubbo.
The LoI from US EXIM for the construction phase of the Dubbo Project follows EFA’s previous conditional finance support of A$200 million debt funding for the Dubbo Project.
While the 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.