U.S. Plans $40 Million Scandium Oxide Purchase Amid Supply Concerns

The U.S. Defense Logistics Agency plans to buy scandium oxide worth up to $40 million from Rio Tinto to bolster national defence stockpiles. This move responds to China’s export controls on the rare earth element. The U.S. aims to secure scandium supplies critical for defence and technology sectors.

The U.S. Defense Logistics Agency is taking major steps to secure crucial materials for national security by announcing a $40 million purchase of scandium oxide from mining giant Rio Tinto. This acquisition aims to ensure the securement of a rare earth element increasingly vital to both the defense and technology sectors.

China's recent export controls have largely disrupted the supply chain, making scandium predominantly sourced from outside the United States. With these new constraints, the U.S. government plans to procure 6.4 metric tons over the next five years, indicating the urgent need to diversify and strengthen its national stockpile.

Rio Tinto has emerged as the sole vendor capable of meeting the government's demand, due to its advanced extraction technology developed in 2020, which allows for the production of high-purity scandium oxide. By bolstering its domestic production capabilities, the U.S. looks to alleviate future supply chain vulnerabilities.

(With inputs from agencies.)