The Trump administration has provided a major funding boost to Australia's hopes of unlocking non-Chinese supplies of a rare earth used in energy and defence applications with a $400mn loan to a Robert Friedland-backed company. Shares in Sunrise Energy, which is building a scandium mine about 360km (225 miles) west of Sydney, surged 18 per cent after the conditional US funding was announced on Monday. The rise capped a huge jump in the value of the Sydney-listed company in the past year to A$3.2bn (US$2.2bn).

The Office of Strategic Capital, part of the US Department of Defense, said the loan was conditional on the Australian company meeting specific legal and technical requirements and included a right of first offer on Sunrise's output. It is one of the most significant moves in the growing partnership between Australia's mining industry and Washington, which has indicated that a supply line of non-Chinese rare earths and other critical minerals is essential for US defence and industrial companies.

The Syerston project is being developed by Sunrise in Parkes, a town in western New South Wales. Scandium is used as an alloy to strengthen aluminium for automotive and aerospace components and is a critical component for chips used in smartphones. Friedland, the co-chair and biggest investor in Sunrise, said the loan represented "a landmark moment" for the Australian mining industry and thanked Trump and the US defence department.