ASX-listed Sunrise Energy Metals has confirmed in a feasibility study that the Syerston project, in New South Wales, is one of a few in the world capable of delivering scandium at the scale and unit cost needed to replace Chinese supply and secure long-term Western supply.

With China controlling between 80% and 85% of global scandium supply and now restricting exports, Western customers are urgently seeking alternative supply options.

Sunrise co-chairperson Robert Friedland and CEO Sam Riggall are confident the Syerston project can meet this immediate strategic need, with the feasibility study having determined a clear pathway to production of 60 t/y of scandium oxide.

Scandium is emerging as one of the most critical materials for next-generation technologies such as solid oxide fuel cells that power AI data centres, advanced aerospace alloys used in defence applications and semiconductors for wireless communication infrastructure.

“We find ourselves at an extraordinary juncture in history, where access to a handful of metals is directing one of the most rapid and aggressive global public policy responses seen since war time, and one that is likely to be sustained for many years,” Friedland and Riggall state.

The 60 t/y production target is based on a mine plan comprising 26% proved reserves and 74% probable reserves.

To achieve the outcomes indicated in the feasibility study, debt or equity funding will be required and investors should note there is no certainty that Sunrise will be able to raise that amount of funding when needed. The company also warns that further evaluation work and appropriate studies are required to establish sufficient confidence that this target will be met.

The feasibility study was completed by GR Engineering Services, which forecasts that the project can process 64 000 t/y, with forecast life-of-mine average operating costs of $534/kg of scandium oxide produced.

This competitive cost position stems from an exceptionally high-grade ore deposit, averaging 690 parts per million scandium in the first decade; efficient extraction and processing technology proven through extensive pilot testing; a 32-year mine life providing long-term production stability; and strategic location in New South Wales with established infrastructure.

For a capital cost of $120-million, openpit mining operations and hydrometallurgical leaching to extract scandium from ore, followed by refining to produce high-purity scandium oxide, can span 21 years. An additional 11 years of processing can occur using stockpiled ore, supporting a total 32-year mine life.

Sunrise is evaluating an expansion case that involves production of another 120 t/y of scandium oxide to deliver a material reduction in cash operating costs.

Current global demand for scandium oxide is between 50 t and 60 t, but has grown at an estimated 19% compound yearly growth rate since 2017. Sunrise anticipates scandium oxide demand will reach 300 t/y by 2030 and 600 t/y by 2035.

Based on a “lower case” scandium oxide price scenario, the Syerton project is valued at $771-million with a 67% internal rate of return (IRR) and $1-billion and 83% IRR in a higher pricing scenario.

As of January 31, Sunrise had A$107-million of cash on hand, representing about 60% of the Syerton capital cost estimate, while it has unexercised options of A$90-million. Sunrise has a letter of interest from the US Export-Import Bank indicating support for up to $67-million in project debt funding – subject to formal application by Sunrise and other requisite due diligence.

Over the next few months Sunrise will be undertaking detailed engineering, construction of water supply infrastructure, procurement of long-lead equipment, negotiation of engineering, procurement and construction management arrangements and infill drilling for the start of stripping and mining.

Completion of these early works activities will position the project for construction later this year.

Upon final investment decision by the board, the project can be commissioned during the first half of 2028 with the initial 60 t/y capacity.

Beyond the scandium oxide, the company is evaluating construction of a metallisation facility to convert scandium oxide to scandium metal, which is also required by the semiconductor industry.

The metallisation facility capital cost is not included in the $120-million feasibility study estimate, but it is not expected to have a material impact on overall project economics.

Sunrise is assessing options to build the facility independently, or with strategic partners, with financing expected to be incorporated into the overall project financing package.

The company affirms that it already has a mining lease in place for Syerton, as well as approved development consent and management plans by the New South Wales regulator.

An environmental-impact statement has been approved to accompany the development application for the project and water supply has been secured through groundwater licences and extraction rights – with pump testing successfully completed late last year.