Sunrise’s Syerston Project Faces Supply Chain Risks Amid China’s Export Controls

Resource and Reserve Expansion

Sunrise Energy Metals Limited (ASX, SRL) has reported a substantial upgrade to its Syerston Scandium Project in New South Wales, with the latest Mineral Resource Estimate (MRE) showing a 98% increase in contained scandium metal to 19,007 tonnes at an average grade of 414 grams per tonne. This expansion follows a focused drilling campaign earlier this year and now places over 90% of the resource in the Measured and Indicated categories, enhancing confidence in the deposit’s quality and scale.

Complementing this, the Ore Reserve Estimate (ORE) has surged by 87%, underpinning a robust 32-year mine life with an expected annual scandium oxide production of approximately 60 tonnes. The high-grade zones, averaging 665 grams per tonne scandium, extend from surface to shallow depths, offering potential for low-cost, scalable mining operations.

Strategic US Government Financing Interest

Highlighting the project’s strategic importance, the US Export-Import Bank (EXIM) has issued a Letter of Interest for up to US$67 million in financing support, representing more than half of the estimated US$120 million development cost. This endorsement reflects the critical role scandium and related rare earth elements play in US industrial, semiconductor, and defense supply chains, especially amid growing geopolitical tensions and supply chain vulnerabilities.

While this Letter of Interest is non-binding and subject to due diligence and underwriting criteria, it signals strong international backing for Sunrise’s ambitions and may facilitate more favourable financing terms, including repayment periods of up to 15 years.

Market Dynamics and Supply Constraints

The scandium market is tightening rapidly, driven by China’s recent export licensing restrictions imposed in April and October 2025. These controls have classified scandium as a dual-use item, requiring exporters to disclose detailed end-use information, thereby constraining supply and pushing prices higher. Sunrise is positioning Syerston as a reliable alternative source, with ongoing marketing and product development initiatives targeting semiconductor and additive manufacturing sectors in North America and Asia.

Sunrise is also advancing its updated Feasibility Study, incorporating the expanded resource and reserve base, with completion expected in early 2026. This study will inform development plans and metallisation pathways critical for end-user applications.

Exploration and Financial Position

Beyond Syerston, Sunrise continues exploration activities at its Clonagh Trend Joint Venture in Queensland, aiming to identify additional mineralisation. The company maintains a solid cash position of A$12.05 million at quarter-end, supported by recent option exercises, which should sustain ongoing development and exploration efforts.

Overall, Sunrise Energy Metals is advancing its position as a leading scandium supplier at a time when global supply chains are under pressure, and demand for critical minerals is surging.